As technology companies move into the payments industry, a Silicon Valley data company is providing tools intended to help old-school acquirers maintain market share.
The tools come in the form of loyalty programs and business analytics, says Toby Scammell, CEO of San Francisco-based Womply Inc.
“The Insights and Loyalty Cloud platforms were developed specifically with ISOs in mind as a tool to keep them competitive, while also providing them with new revenue streams," says Jeremy Richardson, a cofounder of the company.
“We’re actively looking for ISOs out there” to offer the products to merchants, adds Scammell.
Merchants can simply switch on the tools without changing the way customers are accustomed to doing business, he says.
Scammell compares the tools to a layer on top of established processes with no need for new hardware or software integration.
“If you’re an ISO and you want to roll something out to all of your merchants, you don’t want to be blocked by having to determine what hardware they have and what operating system they have on that hardware,” he maintains.
Without those barriers, ISOs can provide value immediately to an ISO’s merchant portfolio, he adds.
All consumers have to do to begin earning rewards is to sign up one time. They then receive messages when they are entitled to discounts or other rewards, Scammell notes.
Womply markets the analytics product by itself under the name Insights, and it sells the analytics product combined with the rewards product as Loyalty Cloud, he says.
The data the products use comes from partnerships Womply has formed with “90%” of the nation’s transaction processors, according to Scammell.
The analytical tool is designed to give merchants that operate in the physical world the same technology that web merchants use, he says.
“Brick-and-mortar merchants are operating in the dark,” Scammell says. “We track all their debit and credit card revenue through our portal – that’s the data we’re capturing in the cloud through our card processing relationships.”
The company also aggregates online data points, including information gleaned from social media and reputation sites, such as Yelp, Facebook and Twitter, he notes.
The tool tells merchants who’s visiting the store, how the business is performing over time and how it compares with competitors. It also identifies the best customers, tallies how many times they visit and how often they purchase.
Womply’s rewards generally don’t rely on amassing points. Instead, the rewards encourage behavior that merchants are seeking.
A restaurant owner, for example, might provide a $100 credit to the diner who spends the most in her establishment during a single month. Womply facilitates that by tallying how much customers spend.
Another restaurateur might give back $15 to patrons who eat at an establishment during the week of their birthday.
Some businesses might hold a monthly drawing for customers who made purchases in the preceding month, while others could reward shoppers or diners for a combination of frequent visits and spending of a certain level – say, three visits with spending of at least $20 per occasion could result in a $15 reward.
“Merchants could mix and match, depending on what behavior they’re trying to drive,” Scammell says.
Providing loyalty programs and business information can help ISOs differential themselves from competitors, thus boosting new business and retaining older accounts, Scammell says. That’s especially important these days, he contends.
Scammell warns that ISOs are under attack by tech companies entering the acquiring business as a means of collecting data.
“We’re sitting here in the Silicon Valley, and the payments industry has a target on its back from the perspective of entrepreneurs everywhere,” he says. “Whether it’s square or levelup or other major technology companies that are moving into payments – the macro trend in the market that we’re seeing is that most technology companies are looking at credit card processing … as a means to an end.”
ISOs recognize the threat and are adding value-added services in self-defense, Scammell says.
“The iso world and the processor-acquirer world is really waking up to the realty that their core business is threatened and that if they don’t add significant value on top of their current service offerings, five years from now they may wake up and wonder what happened to their market,” he says.
Merchants pay $9 a month for Womply’s Insights product, and Loyalty Cloud ranges from $19 to $100 a month, depending on the merchant’s revenue. ISOs cannot mark up the prices but can share some of Womply’s revenue.
It’s not a white label product, and the Womply name stays on the offerings.
The company started in 2011 and has tested the products nearly a year. It has signed distribution agreements with “a handful” of ISOs now promoting the offerings to merchants, and it has “a significant number” of deals pending with ISOs, Scammell says.
Womply is also making the products available through groups that include the San Francisco Chamber of Commerce and the California Governor’s Office of Business and Economic Development.