By Sean Berg
Harbortouch
The payments industry is in flux. This is a time of uncertainty when the market can be disrupted at a moment’s notice. The face of transaction processing may change with the implementation of Europay/MasterCard/Visa, near field communication or any number of mobile payment methods. The market trends are no longer being dictated by acquirers. Instead, the future will likely be decided by merchants and consumers.
In addition to the threat of technological disruption, changing policies and regulations could shift the entire payments landscape at any time. In this unpredictable environment, we must embrace solutions that offer stability and protect against disruption.
A trend that has surfaced within the information technology (IT) industry to combat similar uncertainty, and which fits nicely into the existing payment business model, is that of software/hardware-as-a-service. Credit card processing in general emphasizes long-term relationships over one-time equipment sales, so our industry is already aligned with an as-a-service business model. However, the problem is that a stand-alone credit card terminal is no longer a valuable enough piece of equipment to command long-term retention.
POS and IT resellers have begun shifting from their upfront equipment revenues to offering hardware at a lower cost with long-term service agreements. In fact, this shift toward as-a-service was the focus of a recent POS reseller conference called Channel Transitions. Many resellers have leveraged free equipment programs offered by merchant acquirers to make this transition, since it allows them to reduce their upfront costs. This trend has brought stability to the reseller business model and offers a similar promise for the payments industry.
By implementing an as-a-service business model with more compelling and valuable equipment, ISOs and merchant level salespeople (MLSs) can establish the same type of consultative relationship that has long been enjoyed by IT and POS resellers. This approach enables an ISO or MLS to become the merchant’s most valuable vendor instead of just another bankcard rep. As full-featured, touch-screen POS systems become more accessible to the acquiring community, this equipment can support a consultative relationship.
POS systems provide time- and money-saving features for customers. They increase efficiency by reducing the time it takes to complete virtually every aspect of a business’s operations. This increases the number of tasks that can be performed by each staff member, allowing for a reduction in staffing expenses. Additionally, shrinkage is greatly reduced by decreasing the potential for human error. It is also easier to track potential loss due to theft. Further, comprehensive reporting functionality delivers a wealth of actionable business data while reducing accounting and bookkeeping expenses.
These benefits, along with others offered by POS systems, typically result in a 4 to 8 percent increase to a merchant’s bottom line. POS systems can become central to a business’s entire operations and make payment professionals valued consultants. This ensures that as new payment technologies arise, ISOs and MLSs will be the ones to implement them. This approach removes the risk of disruption by putting ISOs and MLSs in control of the POS. Previously, payment processors, POS dealers and IT consultants were separate entities, each providing a distinct function. As the lines between these industries have blurred, affected professionals have begun to realize they must understand all three worlds to compete in an ever-changing environment. Taking a page from these other industries enables ISOs and MLSs to reclaim lost margins and future-proof their businesses.
Within this article I have referenced many trends affecting our industry, each of which presents various challenges and opportunities. I will elaborate on each of these topics, as well as many others, in future articles. 
Sean Berg is National Sales Trainer at Harbortouch, a leading national provider of touch-screen POS systems and payment processing services. As pioneers of the “as a service” model, Harbortouch offers an unprecedented “free” POS program that allows the company’s sales partners to offer a full-featured POS system with no upfront costs. As National Sales Trainer, Sean trains the company’s ISO and MLS partners on all aspects of POS systems and the free POS program. Prior to becoming National Sales Trainer, Sean was an IT industry consultant and a manager in Harbortouch’s POS division. For more information, contact sberg@harbortouch.com.
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