Total System Services Inc. is taking a different approach to sales by forming a joint venture with Central Payment Co. LLC.
Total System Services, known as TSYS, views the joint venture as an opportunity to expand its payment processing through Central Payment's independent sales agent model, says Mark Pyke, president of TSYS' Merchant Services segment.
Central Payment, a San Rafael, Calif.-based privately held direct merchant acquirer, focuses on merchants in the restaurant, personal services and retail sectors.
TSYS owns 60% of the venture, which will operate as a TSYS affiliate, while Central Payment will continue to do business under its current name, the Columbus, Ga.-based processor says. The companies announced the venture last week.
Central Payment provides a strong independent sales organization channel, with more than 700 active independent agents, Pyke says. Central Payment is a long-time TSYS client, using TSYS technology for payment processing, he adds.
The expanded sales force of the joint venture also sets the table for TSYS to offer services that "go beyond payment processing," Pyke says.
"Although we did not acquire the technology as part of the joint venture, TSYS plans to offer SpotOn's rewards system and social marketing platform as an expanded product offering for merchants," Pyke says.
SpotOn provides merchants with online and in-store consumer activity analytics, allowing merchants to monitor which promotions are most effective at luring customers back with new offers. It also allows merchants to target specific customer groups, such as "big spenders" who have not been at the store or on the store website recently, the SpotOn website states.
Mostly, TSYS proves it has "an aggressive appetite to become a top 10 global acquirer" by investing in the Central Payment independent-sales business model, Pyke says.
"Central Payment plans to aggressively pursue experienced sales agents as an affiliate of TSYS," Pyke adds.
Matthew and Zachary Hyman, co-managing directors of Central Payment, were not available for comment.
The joint venture further illustrates that "payment processors must be nimble in providing flexible and scalable programs that allow acquirers to seize new market opportunities," Pyke says.
TSYS has always had its own sales force, so the joint venture moves the company into a different business model, while gaining an expertise in the independent sales space,
says Richard Oglesby, senior merchant acquiring analyst and mobile pay expert with Boston-based Aite Group.
"Paying a sales force on contract, at commission only, provides potential scalability if a company does it right," Oglesby says.
As for the potential to provide services beyond payment processing, Oglesby claims it is becoming more common for processors to move beyond moving data in assembly-line fashion.
Payment processing is not simply "plug-and-chug" these days, he says. "It's about facilitating communication back and forth in two directions."
As such, many more processors are looking into creative ways to accomplish that goal, he adds.
Just last month, Merchant Warehouse claimed to be the first service to provide cloud-based payment processing for all payment methods, while also handling merchant gift, loyalty and other promotional programs.
Meanwhile, Bank of America Merchant Services, a joint venture between First Data Corp. and Bank of America Corp., continues to add tools for merchants looking to promote daily deals and other loyalty programs.