he ISO community is inundated with "solutions." Just trying to make sense of all of them is practically a full-time job. Some examples, taken from the brochure for the ETA Midyear Meeting & Exposition: wireless, check conversion, Web-initiated ACH, M-commerce, B2B, P2P, PSP, aggregators, cross-border, smart cards, loyalty and stored value cards, imaging, biometrics.

Some ISOs are even attending NACHA events on their own, and keeping track of all of their initiatives almost calls for an FTE slot, too!

As one of my favorite writers, Tim Moran, observed on his Web site, www.eyeforauto.com, all you have to do is say, "Our solution will bring the value-add directly into your order-to-delivery system, including best practice benchmarking," and somebody will sit bolt upright and listen. But what we are finding is that many e-commerce solutions are far from being an answer.

For a solution to be meaningful, there has to be a defined problem to solve. As Tim says in his July 31, 2001 column, "Even among the big players, the volume and numbers just aren't there yet to prove that e- commerce has been anything other than an expensive, a la carte process of cobbling together major technology investments in the hope that they will do something efficient, eventually."

The solutions that we are seeing suffer from both developer hubris and mission creep. Tim concludes that this is not a time for "solutions." With layoffs and dot-bombs abounding, it is a time of problems and corrections.

Yet too many ISOs still are competing solely on price and struggling to find "solutions" that will be business-changing events. And too many ISOs are losing clients from attrition because they have not found ways to add value beyond simple transaction processing.

We have seen an almost compulsive fixation on "electronifying" the check. Methods include conversion, e-billing, receivables processing, Internet and phone payments using ACH or ATM, digital signatures, electronic bill payment and presentment, and now the project ACTION, which seeks to clear an ACH transaction on the ATM tracks.

However, there is absolutely no consumer demand for turning a check into something else, and whatever merchant demand there is (beyond grocery stores) is a result of a manic sales effort by the handful of processors who are looking for any business they can get, profitable or not.

The real question for ISOs is: "Do you compete on price, or do you compete on something else?"

This means addressing questions like:

+ How do you reduce portfolio attrition?

+ How do you provide more fee-based services?

+ How do you increase your margins?

+ How do you increase your client's need for your services?

You already might have guessed that I do have a solution that I would like to talk about: a point-of-sale software product from a company called eStore Express.

POS systems manage inventory and price and produce quick sales with appropriate invoices and handle customer data. This is not often done well by accounting packages.

The eStore Express product is a solution to this problem: Small merchants typically have a good midlevel accounting product but an unsatisfactory POS system. They don't want to change the accounting system, but they would like a better POS system that can export data to their accounting or accountant.

The software would be sold by the ISO. It provides the merchant with an easy-to-use business-management system that uses a standard PC to integrate credit card processing with inventory, customer information, invoicing, bookkeeping, cash control and the seamless addition of an e-commerce Web site. (Now that the merchant processing is bundled in the software fees, the discount rate is no longer the benchmark for how well you are performing.)

It offers the ISO the opportunity to:

+ Market a fresh and value-laden platform as part of the sales process.

+ Increase retention.

+ Integrate the transaction processing to the specific ISO (if you change processors, you can still use the software).

+ Provide an additional commission to your salespeople.

+ Re-market to your existing database of customers.

+ Develop an additional annuity revenue stream.

+ Integrate with business system software or other partners (such as check guarantee, payroll, banking, etc.).

+ Retrieve after-sales via a collateral demo CD to extend customer contact.

+ Price as a promotion, one-time licensing fee or monthly subscription.

+ Private label.

+ Market platform to MLM, franchises, buyers' groups, etc.

+ Include in lease package with equipment.

+ Lease peripherals (e.g. card swipes, barcode readers, receipt printers, pole displays, etc.).

The product has four permutations:

+ eStoreBridge (light POS or entry-level product) - priced at $10 a month.

+ eTMXpress (complete POS sale with bookkeeping) - priced at $20 a month.

+ eStoreMart Web site ($19.95 to the customer) - 15 percent or $3 a month.

+ eStore Mart Webstore ($59.95/month to the customer) - 15 percent or $9 a month.

For example, if the customer purchased eTMXpress ($39.95/month) and Webstore ($59.95 a month) for $99.90/month, the ISO would make $19.95 plus $9, or $28.95 a month, which is equal to $347 a year, in addition to the processing revenues. The other benefit is that the attrition rate should go down by at least 50 percent.

Another example: If it were sold to 1,000 merchants (if just 60 percent use only the POS feature), this would translate into about $280,000 a year in revenue. If an ISO had 500 salespeople (and some of ours do), and each sold only two systems a month, it would result in $280,000 a month, or $3,390,000 a year in revenues after the end of the first year!

In one package and with one process, the merchant can solve point-of-sale, card processing, cash-control and e-commerce questions for less than the price for yellow pages. There it is - the ISO as a solution provider.

I am always on the lookout for "solutions" that easily can be integrated into the existing ISO model. If you think you have one, please write me at brandese@cross-check.com.

For more information on this product, you can call Steve Vermette, President of eStore Express, at 707-974-7959 or e-mail him at steve@estorexpress.com.

Brandes Elitch is National Accounts Manager for CrossCheck, Inc.