It’s no secret that businesses want to accept electronic payments, because consumers demand innovation and choice in the way they transact.
But as companies seek out technology to help provide that range of choice to their end customers, the process of integrating new software and business functionalities can be daunting and error-prone, causing friction in day-to-day transactions and even the loss of business. To sidestep such pitfalls, business owners can partner with independent software vendors, which, in turn, open new markets to these ISVs, as they are commonly called. Opportunities abound in offering integrated payment solutions, but as with any partnership (in this case between ISVs and the merchants they serve), the devil is in the details.
Matt Morrow, vice president of Business Development, Integrated Payments, at TSYS Payment Solutions, told PYMNTS that firms across all verticals want payment processing software solutions that are tailored to their individual operations.
“Integrated payments for some markets has been a no-brainer for a long time,” he told PYMNTS, while in some business arenas the concept is just starting to take hold. Restaurants have long embraced integrated payment platforms, he said, because business operations require value-added software to help run table management, open tickets at the bar and send them to the table upon completion of a meal. “If you’ve got purpose-built hardware and software there, bridging those transactions that are taking place, an integrated payments mode made a lot of sense right out of the gate,” he said.
Looking at other verticals, a dry cleaner or salon operates differently. Unfortunately, payments technology has not historically lent itself to making those businesses more efficient. But software developers have been able to look at smaller firms within those arenas, recognize gaps and see opportunities to build niche software. Attaching an integrated payments solution to software platforms can be helpful, Morrow told PYMNTS. He noted evolution has helped speed things along — where once there’d been terminals that could not talk to a computer and process payments, now operations are sitting on a network “and absolutely can talk to the computer.”
TSYS, said Morrow, strives to work with the solution provider to remove the pitfalls of staying compliant as part of the architecture of the design, or it can keep cardholder data off computers, maintaining encryption as it flows over networks.
The average small business owner cannot be expected to know everything about the payments space and encounters many challenges and opportunities just keeping operations running, said Morrow. The mission is to make payments so safe that the small business owner does not have to worry about that end of the business. They should have enough knowledge in place to recognize best practices and pass an assessment so they can be PCI compliant.
As developers find additional ways to help merchants and bring software platforms into the payments ecosystem to assist target markets, they need to create software that facilitates seamless payments, Morrow emphasized. But they must do it in a way that tells the end clients (the merchants) that “our solution helps you stay PCI compliant … and that we are going to protect your customer’s card data better than what you are using now in a non-integrated environment.”
He said that when TSYS talks to an integrated software prospect, one of the things his firm wants to understand is, “What is your desired user experience?” The speed of a restaurant transaction, he said, can be juxtaposed with the transaction experience in the healthcare space, where the computer system that is helping run the business is handling dozens of other operations — electronic records and appointments, and so on — in addition to accepting payments. ISVs (and eventual partnerships struck between ISVs and merchants) need to mull whether transactions are face to face, whether they are done over mobile devices and whether recurring payments or cards on file are considerations.
Morrow also posited that software vendors need to consider credit card data itself and how that data should be handled. There are “payment-savvy software companies” that want total control and understand PCI and have their own compliance departments and simply desire to work with TSYS’ APIs. At the other end of the spectrum, said Morrow, lie firms that wish to enable payment experiences but do not want to handle customer data, keeping the software system “out of scope” as much as possible.
Thus, agility is key in what he said is a “very dynamic environment for a software developer in any market vertical.” That’s because there has been a “massive sea change” in the way consumers behave and what their expectations are. The expectation in a basic transaction is that they will have a “modern-day interaction with anybody they do business with and hand their credit card to,” he told PYMNTS. Consumers want mobile, online payments and electronic invoicing, Morrow said. Agility is also needed, as software developers consider the flexibility of their go-to market strategy and how to align with where their clients are and where they are going.
Looking at a software partnership roadmap, some red flags signal caution as ISVs link with merchants. Morrow said that “first and foremost you want to choose an organization that
understands the integrated payments space.” This can come in the form of merchant processors or middle-ware vendors, he said, with organizations in place built around supporting the software business model.
“Integrated payments is kind of the mPOS of 2017/2018,” he said. Five years ago, mobile point of sale was “the biggest thing since sliced bread, and so everybody needed to have one …what I see now,” he said of the integrated payments space, “is a lot of traditional competitors in the market that are actually very strong in more traditional payment markets … and have to get out there and say, ‘We support integrated payments.’”
Companies with longer-standing, dedicated integrated payments programs, said Morrow (such as those offered by TSYS), can help drive customers’ revenue growth and drive adoption in the software vendors’ user base.
He emphasized that integrated payment services firms must understand their users’ sales experience. “A disjointed customer experience,” he told PYMNTS, “is just as bad as broken technology.”
More and more companies are looking to their software companies to find out who they trust for merchant services and would recommend — meaning these firms have become such an integral part and a valuable component of small business operations, “that they have a seat at the table when it comes to important decisions.”
Those software companies, in turn, he said, are in an increasingly better position to influence their clients “in choosing the right solution for their businesses. You have a great responsibility that the choice that you put in front of your clients is something that is going to help them stay compliant, that is going to be easy to use, that is going to give them the user experience they are looking for.”