By Dale S. Laszig
Castles Technology Co. Ltd.
What does "apperate" mean? That depends on how you spell it. For Harry Potter, "apparating" is the ability to instantly teleport from one location to another. For technology fans, "apperating" is another kind of magic trick, one in which applications make their operating systems disappear.
In Welcome to the World of the Apperating System, blogger Hal Licino wrote, "Just when you became comfortable with the concept of a [smartphone] or tablet having an operating system (OS) which allowed you to run downloaded apps, all of a sudden on the cyber horizon of planet Mobile a new hybridized concoction rears its strange and puzzling head: The Apperating System! ... [E]ssentially it's an assimilating entity which positions itself between the OS and your apps and modifies both."
In his Wired magazine article Move Over, Apple and Google: Apperating Systems Are Taking Over Your Phones, Ryan Tate exposed challenges faced by Apple Inc. and Google Inc. as apperating systems take over their native environments, wreaking havoc on established business models.
Tate wrote, "Facebook Home ... buries most Android apps several clicks away from the home screen, meaning they are less likely to be used - or even discovered - by consumers. ... Apple's tightly controlled iOS faces its own subversives. ... Apple's restrictions have only fueled the rise of Dropbox, a third-party system that allows data to be more easily shared between apps, siloed off from one another within iOS, via Dropbox servers."
We merchant level salespeople (MLSs) also have apperators in our midst: disruptive technologies that transform the user experience at the POS.
Now that we have invested considerable effort in developing our merchant portfolios, the last thing we need is for some startup to hijack our merchant relationships. We need to coexist with emerging technology providers while continuing to reap the benefits of our labor, retain our merchants and protect our revenue streams.
To that end, members of GS Online's MLS Forum shared strategies for keeping merchant relationships fresh and compelling.
CCGuy reviewed several mobile wallet applications at the 2013 Electronic Transactions Association Meeting & Expo and found them lacking.
He noted that when a program enables consumers to make payments with their smartphones, certain problems arise: "No. 1 - consumer can charge this back; there is no signature; No. 2 - the merchant gets charged the keyed rate as there is no interchange category for this type of transaction." He believes that until these vulnerabilities are addressed, mobile payment technologies will continue to "scare merchants."
It's crucial to create rules of engagement to drive adoption of emerging technology while protecting the interests of all players in the payments ecosystem through compliance and best practices.
Jgarza wrote, "From several different sources, the average agent production across three well known platforms is an average of 2.3 deals per month. Looking at players such as Square, PayPal, Intuit and others, their production is off the charts without a direct [feet-on-the-street] model.
"I believe the problem with technology and adoption is not based on MLS feedback or adoption. I believe it's because a standard is not yet available for this new channel/technology. If you look at Visa, MasterCard and Discover, imagine if 50 different Visa networks were created and each bank had their own standards - Visa wouldn't be the monster it is today. "Emerging technologies are all around us, and it's not the MLS or ISO that is going to make the difference, if and when a standard is created - that is when some of these technologies will start to gain traction."
MLS Forum member Agent recently presented to a group of younger agents and took the time to get to know his audience. Seventy percent of his group was between the ages of 18 and 23; only one person was over 30. "As part of the presentation, I did a little audience analysis," he wrote. "100 percent had a smartphone or tablet (they all have smartphones); 87 percent have used their phone to purchase something, many after showrooming.
"Convenience was the biggest benefit. Security is the biggest concern, but only 20 percent were concerned. Geofencing doesn't seem to concern any of them (I think they see the ability to track down their phone as way more important), except the older person. Eighty-seven percent have a loyalty card and an even higher percentage would like to use their rewards at different locations.
"When introduced to the exact phrase 'Mobile Wallet,' even after hearing it for the first time, and what some of the possibilities are, the percentage of adoption dropped to 56 percent [with] a full 28 percent being neither for [nor] against the concept. I think these folks are intelligent consumers and need to hear more. To me, these numbers are staggering."
We all know that ours is a proactive business, one in which we must always anticipate our merchants' requirements. In his evaluation of current trends, Empire envisions a new era of integrated enterprisewide systems becoming a more predominant form of credit card processing.
He wrote, "We're finding that merchants want to either use mobile payments as a stand-alone or as a fully integrated solution to their processing, i.e. mobile as a component of a terminal, POS, accounting software [plug-in], and/or virtual terminal with recurring billing, cardholder vault, and e-invoicing.
"A prime example of this 'ubiquity of commerce,' as I call it, is an HVAC client using mobile in the field to process payments and capture card data and create an e-invoice for billing later on, the back-office billing department billing monthly recurring service contracts and the accounting department reconciling everything into [QuickBooks] and billing through that software once an invoice is generated.
"Everything [that] can be a stand-alone solution ... can also be seamlessly integrated. I think you'll see more of this concept in the future as [iOSs] and [processors] continue to develop their in-house solutions to keep and preserve market share and offset eroding margins."
Clearent recently voted for more discussions around margin compression and retention of merchants, two very hot topics in our world. Sometimes, as we have seen in sports, the best defense is a good offense. For Harry Potter, sometimes all he needed to do was wave a magic wand and say, "Apparate!" to make his challengers disappear. In our world, the game may require a bit more subtlety, as some of the new players represent opportunities as well as threats.
Be ready for the disruptors by understanding the end game. No matter how much the playing field may change, the winner is still the one who owns the merchant relationship.
Dale S. Laszig is a writer and payments industry executive specializing in business development and sales performance improvement. She manages channel sales at Castles Technology and sales effectiveness programs through IMPAX Corp. and C3ET Credit Card Consortia for Education & Training Inc. She can be reached at 973-930-0331 or dale_laszig@castechusa.com.
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