CHICAGO Acquiring industry disruptors dominated much of the discussion on stage here last week at the Midwest Acquirers Association 11th Annual Conference.
One panel moderator even came up for a litmus test for companies entering the business.
"Friend or foe?" Linda Perry, former Visa Inc. executive and a founder of the International Acquiring Forum, asked panelists.
Her question hinged on whether companies new to the industry are working with or against the ISOs, agents and processors that take a conventional approach to offering card transaction services.
But many entrants defy easy classification.
Some might call Braintree which started as a conventional ISO a foe because the company doesnt really want to work with ISOs anymore. Braintree prefers to handle every aspect of each transaction on its own, according to panelist Takumi Matsuzawa, the companys vice president of operations.
Others would keep Braintree out of the foe category, preferring to consider the company a conventional industry player that simply does its job exceptionally well.
Either way, Matsuzawa made an impression on the audience with a slide comparing a typical dull merchant website using a form for checkout with the vibrant site Braintree offers to clients.
Braintree strives to create systems that integrate easily with other developers software, while also making international e-commerce convenient, he said.
"In some cases we are a foe," Matsuzawa replied to a question from Perry. "But we do work with the merchant if he wants to stick with and ISO but use our gateway."
Another phenomenon, the alternative currency Bitcoin, also defies easy classification as friend or foe to established industry players.
"Bitcoin is a cult in my opinion," Perry said in her introduction to speaker Bailey Reutzel, a reporter for the PaymentsSource website and a contributor to ISO&Agent Weekly and the print edition of ISO&Agent.
"I enjoy the philosophical implications of Bitcoin," Reutzel told attendees, noting that the currency often attracts libertarians. She has written extensively about the currency, is a former Bitcoin investor and has visited EVR, the Bitcoin nightclub in New York City, she said.
Perry noted that Bitcoins have increased in value from 40 cents to more than $100 each, enriching some players. Drug dealers have laundered their transactions by using bitcoins, and the federal government is eying Bitcoin regulation.
Still Bitcoin cant become mainstream without the help of ISOs, processors and banks, Reutzel said.
Perry agreed. "Legacy businesses arent going away, so theres plenty of time go get into this," she said.
On another panel, moderator Deana Rich, CEO of Deana Rich Consulting Inc., also sought potential ISO partners among new entrants to the payments industry.
"Nothing is as consistent as change," Rich says, referring to the acquiring business.
With that in mind, the acquiring industry should view new entrants as potential partners instead of regarding them as "pirates" bent on stealing market share from established companies, she says.
In response, Tony Abruzzio, business development manager for Isis, a consortium of telecommunications companies developing a mobile wallet, said his group is not disrupting the payments system, just disrupting the way consumers pay.
Paying with a phone instead of a card doesnt disrupt what acquirers do merchants just need a Near Field Communication-equipped payments terminal, Abruzzio said.
Bill Baustien, MobiBucks senior vice president, told attendees his company wants to disrupt the industry by giving ISOs more value-added products to sell to merchants.
"Every text and transaction is a revenue opportunity," Baustien said, adding that ISOs can also charge fees to manage its products.
Dan Hatcher, senior vice president at Edo, said his company is offering small and medium-sized merchants the same rewards platform that Target Stores Inc. uses.
Edo uses Big Data to find customers who fall into lots of categories, like someone who hasnt made a purchase at a particular store in 30 days. Then, it sends them offers, Hatcher says. Merchants pay for the service only when a customer redeems an offer.
Responding to a question from Rich, Abruzzio defended Near Field Communication, a technology Isis uses but one that has been slow to catch on in the United States.
"NFC is not dead," he says. "We havent even deployed it yet. Give us a chance."