Page 31 - gs260801

Insights and Expertise

Third, and this is the one most of you are sleeping on. Be-
come the payments expert the platform does not have on
3. Could software companies become partners in- staff. I have sat inside these software companies. They are
stead of competitors? brilliant at their vertical, and they do not know payments.
Many vertical software providers excel at serving They do not know interchange. They do not know where
their industries but have limited payments exper- the buy rate leaks. They do not know how to structure a
tise. Understanding interchange, acquiring eco- sponsor bank relationship.
nomics, sponsor bank relationships and payment
optimization may create opportunities to collabo- That is a gap, and a gap is an opening. The rep who under-
rate rather than compete. stands the payments economics can walk into a software
company and become their partner instead of their casu-
4. Where are new revenue opportunities emerg- alty. I have watched it happen from the inside, more than
ing? once.
Embedded payments may reduce traditional mer- Go where others aren't looking
chant acquisition opportunities while creating de-
mand for consulting, payment optimization, imple- Interchange optimization is real money wearing a boring
mentation support and strategic advisory services. name. The buy rate that got written once at launch and
Organizations willing to broaden their offerings never reread is a leak nobody is defending. Those things
may discover entirely new revenue streams. do not disappear because the merchant moved inside a
platform. They just move to a place most people are not
5. Are we investing in expertise that software looking. So go look there.
cannot easily replace? The uncomfortable truth is that the acquiring business
Technology continues to automate routine process- you learned is being rebuilt underneath you, and it is not
es, but experience, judgment and trusted relation- going back. The comfortable truth, the one I would bet my
ships remain difficult to duplicate. Understanding own career on because I already have, is that payments
industry regulations, complex merchant needs, has always rewarded the person who understands where
payment economics and emerging technologies the money really moves. That person used to walk the
allows professionals to provide value that extends street. Now they walk into the software company. Same
well beyond processing rates. skill. A different door.

The payments industry has reinvented itself The switch is easy to flip. Knowing whether the econom-
repeatedly over the past several decades. Today, ics underneath it are any good is not. That part is still your
software-led payments represent another chapter job, and nobody has automated it yet.
in that evolution. Organizations that focus only on
defending yesterday's business model may struggle. Allan Lacoste spent 25 years in payments, from bootstrapping his
Those that identify where their expertise creates the own wholesale ISO to building the embedded payments businesses at
greatest value are more likely to remain relevant as Applied Pay and Duck Creek. He now advises software platforms and
the industry continues changing. their sponsors through LAC Strategic Ventures. Reach him at lacoste@
allanlacoste.com or at allanlacoste.com.

in time. So here is the part that actually matters. Here is A Also find us on Facebook,
F
e
b
o find us o
ls
ac
n
k,
o
o
how you still win:
n &
t
r f
e
i
w
t
T
r the
o
in
ke
L LinkedIn & Twitter for the
dI
p-t
a
o-d
mos
t u
t
o
es,
ri
e s
t
First, go where the software is not. Every platform picks most up-to-date stories,
a lane and ignores the rest. The complex merchant. The c a n ’ t miss e v e n ts a nd ne w es t
can’t miss events and newest
multi-location operator. The business that needs a human ind us t r y a nno unc e me n ts.
industry announcements.
being when the batch does not settle at midnight. The ver-
tical too small for a platform to ever build for. That mer-
chant does not want a switch. That merchant wants you.
Second, stop selling rate and start selling the one thing a
platform cannot fake, which is you. A platform will never
sit across a desk. It will never restructure a deal when the
ee
h
n
tI
r
eG
nS
ee
k.c
w
w
.f
boo
e
a
c
ttp
m/Th
o
s://w
business hits a rough quarter. It will never pick up the h https://www.facebook.com/TheGreenSheetInc c
i
ee
n
r
n-s
w
s://w
ttp
w
.l
h
ee
k
pa
m/c
o
i
m
n
n.c
h
o
e-g
ed
y/t
phone at nine at night. The relationship was always the h https://www.linkedin.com/company/the-green-sheet t
moat. It just matters more now that the commodity part is https://twitter.com/The_Green_Sheet t
w
s://t
h
r
ttp
ee
m/Th
r
ee
o
.c
e
tt
i
n_S
h
e_G
being automated away.
31