By Dale S. Laszig
Castles Technology Co. Ltd.
Many developments we've been anticipating in merchant services are already taking root in popular culture. How can we leverage these trends to remain competitive? It takes dexterity for merchant level salespeople (MLSs) to stay in the game. Government regulations, Payment Card Industry standards, evolving markets and emerging technologies all are competing for our attention and changing perceptions about credit cards.
Following are suggestions from GS Online MLS Forum members on how to prepare today for the future of payments.
Clearent reminded us about the constancy of change. "In 10 years we will have people complaining that there is a race to the bottom," he wrote. "We will hear card associations talking of new security measures. We will hear people say we need to stop selling X and start selling Y because [it's] the wave of the future.
"We will see … young people come into the business, make a poor partner choice, see either short-term or no-term success, [then] leave. Does any of this sound familiar? It should because [that's] exactly how it was 10 years or 15 years ago."
He added that selling, like baseball, requires focusing on the basics: "pitching, catching and timely hitting."
Dee Malik advocated staying in the game. "Better to be in the game than on the sidelines, and better to make history than just becoming a historian," he said. "That is true in academia, sports and just life."
Payments that are seamlessly embedded inside a total consumer experience are gaining popularity among retailers. In his Wired magazine article "The Age of Invisible Design Has Arrived", Scott Dadich wrote, "[W]e're entering a new era, one in which designers create experiences centering not on physical objects but on the fabric of digital information that surrounds us.
"That's the next great challenge for design: weaving the threads of technology, information, and access seamlessly and elegantly into our everyday lives.
"When a social network automatically checks us into a location, or cashiers can suggest new products based on our purchase history, or our connected TV calls up our favorite shows when we walk into the living room (all things that are either happening now or coming soon), it may seem like magic. But these are carefully designed experiences."
What kind of magic trick would make credit card processing disappear? It would most likely begin with eliminating the traffic stops in payment activities. Line-busting, curbside pay, online-to-offline ordering, and mobile payments all de-emphasize credit cards while facilitating a holistic consumer experience.
Marketing is also becoming invisible. In his book, Epic Content Marketing: How to Tell a Different Story, Break through the Clutter, and Win More Customers by Marketing Less, Joe Pulizzi wrote, "We need to think of social media marketing and content marketing less as two isolated options and more as interrelated parts of marketing's ongoing evolution. The Internet has unleashed a revolutionary ability for every brand to communicate directly with its customers – without the need for a media industry intermediary."
Does this mean advertising agencies will cease to exist? No, they will just have to up their game. The same goes for merchant services. Merchants will have cool new digital tools to drive consumer engagement, but they won't necessarily know how to use them. MLSs can drive process improvements that help merchants reach target audiences or, as Pulizzi described it, "the marketing and business process for creating and distributing content to attract, acquire, and engage a clearly defined and understood target audience – with the objective of driving profitable customer action."
MerchantNation added, "Advertising is [a] big market and one that merchants expect to pay premiums for. Savvy agents will start to move towards these higher profit products, and this is the reason why I started the development of my own in-house loyalty and big data software several years ago. Competition has just started to swell, but hasn't hit critical mass yet."
Credit card processing will endure as part of a complex set of variables that provide big data and influence consumer behavior.
"Merchant services [are] no longer a primary product – there is too much competition with not enough profitability," Jordan1880 wrote. "There is nothing anyone can do to keep the account – it doesn't matter how low you price, how well you service – there's nothing sticky about it. … I've adapted to the changing marketplace and realized that I needed a solution to sell as a primary product where [merchant services] just comes along with it as a secondary product. I created www.realtimemeal.com because years ago I saw the signs and realized that if you don't adapt, you become extinct."
MBruno envisions a future based on an ever-broadening smart grid that creates a kind of interconnected utopia. "Considering 'smart homes' with appliances linked to the web (like refrigerators that tell you when you should buy more milk and can turn the oven on when needed) are already coming into existence, I think it's safe to say technology will become more integrated into everything we do – including how we pay for products," he wrote. As we all become more [accustomed] to various devices linked to everything, the 'smart store' will link everything from basic sales to marketing and automated inventory management and beyond back into the POS system and ultimately on to more portable devices."
Cool technology can become a distraction. Let's not forget that machines are only supporting actors. The starring roles will always belong to merchants, who use our platforms to showcase their businesses, not the other way around. Maketelinc stated, "As we saw with the dot-com bust, those ISOs who invest too much in tech, may well regret it, for one, a buyer who likely has [his or her] own tech will see no added value in it, and for two, as most of us have heard (true or not) Warren Buffet doesn't invest in tech, because it has a short life. Take Apple, for example, it was down to a dollar and written off by many, [then] made a roar back, only to be down 45 percent from its high this year."
MBruno places a premium on employing industry knowledge to gain a competitive advantage and remain a trusted adviser to merchants. "Our industry (and our job function) requires us to adapt to new ways of thinking to keep our competitive edges," he wrote. "As new products come out, we must learn them – even if they are of little use today – to stay relevant."
Ccmuwele wrote, "I think the survivors will be those who adapt quickly and efficiently to the changes around and above us. … I think a lot of young people are coming into our industry in droves – just not to … the 'traditional' side of [acquiring]. One thing is for sure though: none of the survivors will look like any of the ISOs that are around today."
Ber suggested the best way to prepare for the future of merchant services is to observe younger generations whose habits, lifestyles and preferences are driving innovation. "Think what the tweens will be doing in their daily, nonsocial lives," he wrote. "They'll probably want to text in their pizza order, buy groceries to be delivered, and want to date without having that awkward 'picking up at the bar' interaction. So just work backwards from that."
Whether you sell a smartphone or tablet application, integrated POS, virtual or traditional credit card terminals, stay relevant by asking the hard questions. How will your services solve a problem? What differentiates your services from those of your competitors? What is the business fit between the merchant's business and your business? If you can answer these questions, your merchant services will never go out of style.
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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