Payments technology is advancing so quickly on so many fronts that Spindle CEO Bill Clark is changing his requirements for hiring new sales staff.
"These days, the process isn't so simple and right now we're going after people with a technology background," said Clark, who has worked for more than two dozen years in merchant services in various capacities.
Increasingly, that means partnering with other technology companies rather than working with independent sales organizations (ISOs), which have traditionally enjoyed long-standing advisory and sales relationships with merchants. Today, ISOs face a tough learning curve in the age of APIs, Apple Pay and EMV.
"We can partner with a technology provider and we can bundle what we do with them," Clark said.
Spindle creates merchant integrations with the mobile technology that powers payments and marketing. The company often partners with telcos, providing mobile payments to pair with the telcos' wireless connections.
"They are already selling services to these merchants and are providing hardware. We help the merchant set up [mobile payments] off of that service," Clark said. "We can go in and say, 'I can turn on Apple Pay.'"
Apple Pay, the mobile point of sale, location-based marketing, EMV, and search engine optimization are ushering merchants into a multichannel sales culture. These services are deployed much easier as an aggregated technology bundle encompassing mobile, online and the physical store assembled by people with domain expertise, Clark said.
"How is a merchant going to know how to do all of these things unless they get in touch with someone that is connected to the technology? A lot of ISOs are still struggling with how to get into the game," Clark said.
ISOs have been confronted with the threats of mobility and software-based point of sale and mobile commerce technology for the past several years, with much of their initial response being focused on broad societal trends. The relatively slow pace of the recent past is also a challenge for companies that are not accustomed to much change.
"When you consider how little point of sale hardware had actually changed up until a few years ago, the current changessuch as moving from mag stripe to NFC or QR codes and now beacons it's really kind of a 'big bang' type of episode," said Andy Schmidt, a research director in CEB TowerGroup's commercial banking service, who said that's a big adjustment for an industry that long viewed the point of sale as a cash register that never moves.
As the adoption of mobile payments accelerates, many ISOs are being forced to change their compensation and financial structure to attract sales staff, a process that adds financial pressure to the technology learning curve.
"Smaller ISOs are getting out of the business, particularly the ones without technology," said Henry Helgeson, CEO of Cayan, a technology and merchant services company that was formerly known as Merchant Warehouse.
Cayan requires its sales reps to pass the Electronic Transactions Association's Certified Payments Professional test, which educates its reps on new developments in technology.
That knowledge comes in handy when helping merchants understand application programming interfaces (APIs), a common way to add e-commerce capabilities to existing mobile apps and websites.
But it's possible to take the technology-first argument too far, Helgeson said, advocating a middle ground that combines basic technology deployment with consulting.
"With banking and financial transactions, there is a lot of compliance and other issues that have to be handled on the back end. There's more to it than just the API," Helgeson said. Many technology companies that are doing "great work" with payments technology, he said, though they underestimate the amount of work that is required to successfully process credit card transactions.
To stay relevant, ISOs need to consider the entire payment flow beyond just the acceptance hardware. ISOs must also be experts in the integration of the technology into the point of sale system and the training of staff in a merchant's' back office, Schmidt said. This expertise helps ISOs cope with evolving areas such as processing, risk and compliance, he said.
"There are ISOs that do know the technology," Clark said, adding it's the smaller shops that will struggle more with the changes. "The game is not over the ISOs are good at selling to the relationships that they already have and upsell some technology. But they need to get familiar with the mobile solutions that are out there."