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The Green SheetGreen Sheet

The Green Sheet Online Edition

June 25, 2012 • Issue 12:06:02


Disruption is good

The dizzying pace of change poses an almost constant threat to one's sense of stability. Just as you get comfortable with a certain technology, along comes a new technology poised to unseat the old. And it's not like you have a choice in standing pat.

In payments, disruptions are coming fast and furious. E-commerce hasn't reached its full potential, and yet the industry is already zooming ahead to mobile commerce. POS terminals that were state-of-the-art only a short while ago now seem old hat. And the value-added service is taking the place of meat-and-potatoes processing as the pitch du jour for ISOs and merchant level salespeople (MLSs).

There is no way around it. There is no way of stopping it. The payments world is going through a historic and perhaps unprecedented shift. But the disruptions ISOs and MLSs are experiencing should not - in fact can not - be viewed negatively. Even though disruption is unsettling and uncomfortable, it must be embraced if agents are to survive.

Exploit the edge

It is no coincidence that the most successful companies are also the ones that have baked the philosophy of disruption into their DNA. Cutting edge firms like Apple Inc. and Google Inc. have disrupted commerce with their innovations. But they are also willing to disrupt themselves to keep pace with the changes their inventions have wrought.

It seems ages ago when Apple was a PC maker. But the revolution unleashed by the iPhone fundamentally changed the company into a hub for interactive social media and commerce, which Apple enthusiastically embraced. The same goes for Google. The search engine giant is making a foray into uncharted payment territory with Google Wallet, aiming to take advantage of the online ecosystem it helped create.

ISOs and MLSs can adopt the same mindset. A payment processor for traditional brick-and-mortar retailers may develop customer relationship management (CRM) software ideally suited for a niche market, such as health care or auto body shops. That best-in-class CRM tool might point the ISO into a more specialized and profitable direction than previously imagined, one that would have been closed to it if innovation and experimentation were not integrated into its business culture.

Invite upheaval

In addition, without the threat of disruption, ISOs and MLSs might become complacent or remain too acutely focused on servicing customers to realize when the competition is developing processes that could capture their merchant customers and erode their bottom lines.

A heightened sense of the competitive landscape has the added benefit of helping businesses maintain a sense of challenge so important to winning in a free market system. Without that edge, companies would stagnate, and so would their services.

In this way, disruption helps the entire marketplace. Businesses are forced to innovate to remain competitive. Processes get streamlined and more efficient for companies to operate. And consumers get better products and services. It is this continuous cycle of innovation and disruption that keeps society progressing.

Of course, progress is hard to quantify. But can anyone argue that manual credit card imprinters of old are better than electronic POS terminals? Or that the multifunction but stationary POS devices in place today will remain superior to the mobile payment devices of the future? Hardly.

Yes, disruption is destructive. But it's also immensely creative. Disruption can put you out of business. But you can also harness it to make your entrepreneurial dreams come true. end of article

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