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Education

Thinking outside of the box Moving beyond cost
of doing business

By Mike Camerling In the past, most merchants likely
AEVI International GmbH viewed payment terminals as a nec-
essary evil. With consumers increas-
or decades, success for most ISOs and merchant level salespeople ingly preferring card payments over
(MLSs) rested on being able to place a payment terminal on as many cash, few merchants could forgo the
merchant countertops as possible and keep them there for as long as devices. Instead, they put up with
F possible. Today, any merchant with a smartphone is unlikely to be an often-confusing monthly bill as
impressed by that single-purpose device cluttering up the counter, so it's time the cost of doing business. Now mer-
to get serious about selling true business solutions. chants have options, and the single-
use payment device is going the way
Merchant churn has been a perpetual problem for ISOs and MLSs. Merchant of flip phones. ISOs and MLSs as a
attrition is estimated to be between 20 and 30 percent. It's only going to get group must change along with the
worse for those who don't start thinking outside of the box. times.

Our industry is at an inflection point similar to the situation when consumers Merchants aren't dumb. They know
switched from basic cell phones to smartphones. Today, 82 percent of cell that if they can buy a fully functional
phone users have smartphones, up from 33 percent in 2011, according to Pew smartphone for as little as a couple
Research Center data. Those old flip phones used to be primarily for voice calls, hundred dollars and gain access to
but today's smartphones are used for keeping up with news, online shopping, a virtually unlimited universe of
research and mobile payments, along with a variety of services and social consumer-oriented apps, there's no
media apps. reason to settle for the limitations of
over-priced payment boxes.

Payment facilitators such as Square
are trying to gobble up the low
end of the market and build a
foundation that will allow them to
move upstream to traditional small
and midsize merchants; meanwhile,
value-added resellers and application
developers are trying to figure out
how to capture a healthy slice of the
pie for themselves by integrating
payment gateways and leveraging
the Internet sales channel.
Transformation to solution-selling
To compete, ISOs and MLSs must
transform from pushing boxes
to selling value-added business
solutions. That means more than
selling a juiced-up payment terminal
that can complement the basic
payment application with another
app or two for loyalty or phone card
top-up.

In the past, value-added apps were
dependent on the constraints of the
payment app, which was very much
constrained by the limited choices
available from terminal vendors.

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