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Education

Cloud-based processing: The biggest issue for ISOs may be the ability to access
and manage merchant data. Since you get paid based on
the future is here merchant transactions, having timely, accurate data is
the lifeblood of your business. Yet if you want to have a
merchant report or data feed directly into an ERP system,
it's highly unlikely that you can get that data when and
how you want it.

Typically, you will get a package of summarized reports
that the processor will issue when they choose to issue
it—not when you need or want it. If you require a different
flow or format to improve your operations, that becomes
a "custom request" that entails extra fees and an extended
delivery time.
A new way to access data, managing merchants
In contrast to this, cloud computing has been around for
approximately two decades, and there are reams of data
pointing to the business efficiencies, cost-benefits, added
security and competitive advantages it holds. According
to a recent study by the International Data Group, 69
percent of businesses are already using cloud technology
By Tom Byrnes in one capacity or another, and 18 percent say they plan to
LedgerPay implement cloud-computing solutions at some point.

f you're an ISO or a merchant, one of the necessary Having a cloud-based processor means you get to take
elements of the business you're in is a relationship advantage of all of the latest advances in technology,
with a payment processor. While the rest of the and this can have a huge impact on an ISO's back-office
I technology landscape has shifted to cloud-based operations. Since it's based on a unified architecture,
platforms over the last decade, processors have clung to incompatibility issues vanish. The same is true with setting
their legacy stacks and operated in much the same way and managing merchant pricing. This has traditionally
they have for the last 30-plus years. been obscured by legacy processors using arcane codes
that can lead to misinterpretation and result in unforeseen
It's easy to see why. Good economic times or bad, effects on actual pricing on merchants that you might not
payment processing continues to be profitable. People see at the end of the month.
and institutions still need to move money around, and
processors sit at the nexus of a global constellation of the In addition to being faster, easier to scale due to a lack of
financial players who facilitate those transfers. Basically, data centers, and customizable, a cloud-based platform
if you're in the payment processing business, the rule of lets merchants enjoy increased payment flexibility by
thumb comes down to that old adage: If it isn't broken, being able to accept mobile payments, online and counter-
why fix it? But if you are an ISO, that may not be what you top payments through a single integrated POS system. It
want to hear. also represents a major breakthrough in data accessibility
and transparency. Getting reports and changing pricing
Although they are reliable, the design of most processing on a merchant portfolio can now be done in real time, and
stacks creates a host of day-to-day business challenges for any form of data can be exported into an in-house CRM,
ISOs of all sizes. The biggest of these is the ripple effects ERP or accounting system—minus the service requests
of a non-standard architecture model. Many processors and extra fees.
have multiple platforms, any number of which may not be
compatible. Beyond this, the cloud is capable of supporting a number of
automated management tools that ISOs depend on every
This makes cross-platform communication difficult at day. Things like automated agent residuals, chargeback
best, a feature that surfaces as different requirements for reconciliation and calculating agent residuals so they can
everything from bank sponsorships to POS integrations. be paid on a daily basis can all streamline operational
Plus, it requires ISOs to learn and manage separate systems overhead. This attracts a better team of agents while
and interfaces, increasing expense and risk, while making allowing ISOs to excel at what they do best: selling more
it difficult to integrate into other service providers. Since merchant accounts!
no clear standard for onboarding exists, every processor
also mandates a different process, and that makes it Tom Byrnes is vice president of marketing for LedgerPay. You can reach
difficult to efficiently board and manage merchants.
him by email at Tom.Byrnes@quisitive.com.

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