A joint venture formed by Total System Services Inc., or TSYS, and Central Payment Co. LLC will offer merchants a rewards system and social marketing software, the companies say.
TSYS also 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 joint 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 stated in a press release.
Central Payment provides a strong ISO 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.
But the expanded sales force of the joint venture 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, helping merchants determine which promotions work when trying to lure customers back with new offers. It also enables 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 says.
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 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 expertise in independent sales, says Richard Oglesby, senior merchant acquiring analyst 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.
“Because of mobile capabilities, TSYS has to look into it [more services] because it is not just about payments, it is about helping merchants grow relationships with consumers,” Oglesby says.
Payment processing is not simply “plug-and-chug” these days, he adds. “It’s about facilitating communication back and forth in two directions,” Oglesby says.
As such, many more processors are looking into creative ways to accomplish that goal, he adds.
Indeed, 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. http://www.paymentssource.com/news/Merchant-Warehouse-All-Encompassing-Platform-3010932-1.html
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.