Ven­dors and Pro­ces­sors Open Up Their Tech­nol­ogy

As pro­ces­sors and hard­ware mak­ers com­pete to win more small-busi­ness pay­ments, they are open­ing up their tech­nol­ogy plat­forms to de­vel­op­ers.

ISO & Agent - - INSIDE 11/12.2017 - BY KATE FITZGER­ALD

Ven­dors and pro­ces­sors are keen to get more busi­ness with small mer­chants. This means open­ing up their sys­tems to de­vel­op­ers, who can bring their soft­ware into tra­di­tional point of sale sys­tems.

Try­ing to an­tic­i­pate mer­chants’ needs in the faste­volv­ing dig­i­tal com­merce en­vi­ron­ment can be ex­pen­sive — as ev­i­denced by Van­tiv’s $1.65 bil­lion deal for Mer­cury Pay­ment Sys­tems in 2014, when the pre­vail­ing tech­nol­ogy cen­tered on em­bed­ded pay­ments.

But even that didn’t ad­dress all mer­chants’ needs. Van­tiv is try­ing a com­ple­men­tary ap­proach this year by part­ner­ing with Ger­many-based Aevi, a unit of Diebold Nix­dorf, to pro­vide a global mar­ket­place of white-la­bel apps for mer­chants.

Aevi will sup­port this mar­ket­place through an open ap­pli­ca­tion plat­form Van­tiv con­trols, aim­ing to bring more flex­i­ble so­lu­tions to its small- and mid­size mer­chant clients.

Giv­ing mer­chants di­rect ac­cess to third-party soft­ware isn’t new—first Data’s Clover unit in­tro­duced the con­cept three years ago—but Van­tiv is giv­ing its ap­proach a cus­tom- de­vel­op­ment spin with an app mar­ket­place where de­vel­op­ers can play with so­lu­tions that work with Van­tiv’s Smart­pay Se­ries hard­ware. The plat­form uses ap­pli­ca­tion pro­gram­ming in­ter­faces and soft­ware de­vel­op­ment kits Aevi sup­plies.

“One of the big prob­lems mer­chants

face is get­ting locked into an app or a de­vice, when both sides of the equa­tion keep evolv­ing, and we be­lieve the an­swer is hav­ing a sin­gle plat­form that en­ables mer­chants to con­nect any kind of app to any kind of de­vice, so we be­come a kind of itunes store for mer­chant apps,” said Scott Dean­gelo, Van­tiv’s se­nior vice pres­i­dent of prod­uct, in an in­ter­view at Money20/20 in Las Ve­gas.

Its Mer­cury ISV pro­gram isn’t go­ing away, but Van­tiv hopes its ap­proach— rolling out next year in the U.S. only— will spark more cre­ative so­lu­tions for mer­chants, too.

“Any soft­ware de­vel­oper can write code for mer­chant apps on our plat­form, and they don’t have to limit the sphere of end users,” he said. “If they come up with a great app, and be­cause our plat­form is hard­ware- ag­nos­tic, it will work on any brand of pay­ment hard­ware Van­tiv pro­vides, whether it’s through a bank, an ISO or an­other chan­nel.”

Van­tiv’s move could bring it closer re­la­tion­ships with mer­chants, said Eric Grover, an in­de­pen­dent pay­ments con­sul­tant.

“With Van­tiv’s Mer­cury model, mer­chants are get­ting soft­ware bun­dled in with ser­vices, but the soft­ware doesn’t come from Van­tiv,” Grover said. “By of­fer­ing mer­chants a menu of soft­ware apps on a plat­form it con­trols, Van­tiv tight­ens its re­la­tion­ship with mer­chants and likely also it can cap­ture more of the eco­nomics on the back end.”

Legacy hard­ware mak­ers are do­ing some of the same things.

Ver­i­fone for sev­eral months has been de­vel­op­ing its own de­vel­oper- cen­tered app mar­ket­place for mer­chants, and this week un­veiled five prod­ucts in­clud­ing a so­lu­tion en­abling mer­chants to sync their e- com­merce cat­a­logs with mer­chan­dise in stores, plus tools to man­age cus­tomer loy­alty, gift cards and work­forces.

It’s taken longer for Ver­i­fone to get its open plat­form for apps rolling be- cause of the com­pany’s goal to sup­port so­lu­tions glob­ally, said Ver­i­fone CEO Paul Galant.

“Ver­i­fone op­er­ates in 168 coun­tries, and while a lot of avail­able apps are lim­ited to lo­cal ge­og­ra­phy, our strat­egy is based on se­cu­rity and ubiq­uity, which re­quires us to take a global ap­proach,” Galant said. “We’re still in the early stages of where we plan to go with an open mar­ket­place for apps, which ul­ti­mately will be a plat­form that al­lows a de­vel­oper or a soft­ware com­pany to port their so­lu­tion into our plat­form any­where in the world.”

Clover’s lead­ers seem un­fazed by the com­peti­tors’ moves into open ap­pli­ca­tion de­vel­op­ment.

“We have a huge head start in the mer­chant ap­pli­ca­tion mar­ket, with de­vel­op­ers steadily de­liv­er­ing to spe­cific mer­chant needs, in­clud­ing ob­serv­ing the pri­vacy and server re­quire­ments of dif­fer­ent ge­ogra­phies and in­dus­try sec­tors,” said Mark Schulze, Clover’s co-founder and di­rec­tor.

Cur­rently op­er­at­ing in the U.S., U.K. and Ire­land, First Data’s Clover has more than 300 mer­chant apps avail­able and a roadmap for rolling out third­party mer­chant apps to other na­tions, Schulze said.

“Clover’s model al­ready has made a lot of progress in pro­vid­ing a plat­form for frus­trated de­vel­op­ers, and we have a lot of mo­men­tum with so­lu­tions that work, and we ex­pect to main­tain our lead,” Schulze said.

“We’re still in the early stages of where we plan to go with an open mar­ket­place for apps, which ul­ti­mately will be a plat­form that al­lows a de­vel­oper or a soft­ware com­pany to port their so­lu­tion into our plat­form any­where in the world,” said Paul...

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