A Shrinking Window of Opportunity for ISOS
The same technologies that threaten ISOS can also aid their success, but it’s up to the ISOS to act fast enough to make the most of these opportunities.
Technology moves fast. Whether it is a threat or a value to ISOS depends on how fast the ISOS respond to any new innovation.
Increasingly, the acquiring and ISO business has taken the view that advances in technology that originally looked like threats instead made it easier to sell more products and support more payment types.
Still, the warnings never died down, and innovation in acquiring is lagging behind payments and financial technology advancements. Part of this has to do with the acquirers or independent sales organizations themselves, specifically the individuals leading or working for those companies not making the full-blown effort to become engaged in current technology, said Juan Ortiz, executive vice president of national sales at Bluepay Processing LLC.
It’s important to change this mindset, Ortiz said during the annual Midwest Ac-
quirers Association conference, because “technology hasn’t even started yet.”
“This is the time to get involved in something good,” Ortiz said. “You have to get on board with technology and obtain as much knowledge as you can. You all have to be on social media and brand yourselves.”
Most importantly, Ortiz added, if an employee is not working with a processor or acquirer that is involved with integrated payments and open application programming interfaces, it is vital to find a processor that is.
It’s not farfetched to think that an acquiring business caught too far behind the times could end up like Kodak, a company that had knowledge of digital camera advancements but waited too long to pivot, Ortiz said.
Acquirers and ISOS have two roads to travel on the current fintech landscape — one to understand advancing technology themselves, the other to be able to explain it and motivate merchant clients to embrace it, said Doug Small, national sales director for ISOS at Cayan.
“We’ve invested a lot of resources and time in developing our own technology that is responding to what merchants and businesses need,” Small said. “We need to get those outside of our company to understand the technology, and that’s a challenge, especially for smaller merchants.”
For the most part, large merchants know they need the technology to accept all payments types, Small added, but it is also vital for them to have updated backoffice and data recording capabilities.
“Every year, every month, that type of technology is moving down market because smaller merchants are also understanding that this technology can save them time and also give their customers a good experience,” Small said. “If their customers want Apple Pay, then it does not take long to get that integrated.”
With acquiring and ISO businesses fully engaged in payments and retail industries that are evolving and emerging, the inner workings of those ISOS must change as well.
Companies must make “anticipation skills” a core competency, assembling leaders who are adept at looking ahead and determining where a company must adapt, said Robert Dean, business consultant with Dean Learning & Talent Advisors LLC.
“Statistics show that many ‘change’ projects fail, but in my experience those that succeed have a sustained business sponsor to motivate the project and a collaborative culture,” Dean said.
Virtual collaboration, in which companies use technology to conduct thinktank sessions through outside networks, is becoming a vital tool for those serving clients in emerging technology markets, Dean added.
Technology will continue to advance at a rapid clip, Bluepay’s Ortiz said.
“It’s all about data now fueling artificial intelligence,” he added. “Yet, people are still trying to sell one merchant at a time, but the way to do it is through integrated payments, particularly business-to-business.”
It was unheard of five years ago in the acquiring business to sell business-to-business payments through credit card processes, Ortiz said. Now, that is common and profitable.
“It comes down to, if you control the data you can control the user experience,” he added.