ISOs and agents are perpetually seeking new value-added products and services that can generate profit and foster differentiation, and three possibilities have come to light recently.
Verifi wants more ISOs to promote its Cardholder Dispute Resolution Network; Forte is searching for more ISOs to sell its automated clearing house and card services; and CARD.com may soon take on more ISOs to promote its prepaid cards .
CARD.com, a three-year-old provider of prepaid rechargeable cards, is using a few ISOs for distribution and may take on more, says Ben Katz, the companys CEO.
"Were certainly interested in the opportunity to get to know more ISOs-- and particularly more-upscale ISOs," Katz said.
The ISOs that are promoting the companys wares to merchants approached the company about handling its products, he noted.
He would prefer to add ISOs to the mix gradually as his company learns the acquiring channel.
Larger ISOs would make the most attractive partners, Katz said.
Hes also seeking mobile-oriented ISOs because 86% of the CARD.com signups come through smartphones.
As for customers, small retail or restaurant chains might have more potential than single-location businesses, he maintained.
In some cases the company could set up electronic tablets at the point of sale for shoppers to use to order the prepaid cards.
Thus far, the company has sold cards online and through a mobile app, relying on word-of-mouth, promotions by co-branding partners and paid ads on Google and Facebook.
The cards often bear the like likeness of charismatic figures such as James Dean, Elvis Presley and Big Bird.
Some of CARD.coms business comes from payroll cards, Katz said.
"We want to service the 90 million Americans right in the middle of the economy," he said of the companys overall business.
Its customers, who earn annual income of $30,000 to $75,000, arent rich enough to qualify for free checking and might occasionally bounce a check.
CARD.com calls them "the unhappily banked," to distinguish them from the less-affluent underbanked.
FORTE SEEKS MORE ISOs AND AGENTS
Forte Payment Systems, which got its start in 1998 as ACH Direct, has a small sales staff to handle inbound business and to concentrate on its specialty verticals, like governmental bodies and agencies, but most of its merchants sign on through ISOs and software companies, said Jeff Thorness, the companys CEO.
He started the firm as an ACH tech company, and performs almost all functions on that side of the business, including authorization, settlement and funding. On the credit card side, it operates a gateway and does its own underwriting but relies on processors for front-end authorization of transactions.
Its looking for additional ISOs and can handle ACH and cards for them, Thorness said. "We love ISOs, and we love to partner with people," Thorness said.
Because the company has relationships with most of the major processors, ISOs would not need to ad processors to do business through Forte, he noted.
Since changing its name to Forte in March of last year, the company has been upgrading its virtual terminal, reporting and analytics, and APIs, he said.
Its new approach to tokenization, called Forte.js, works for cards and ACH while complying with Payment Card Industry data security standards and minimizing PCI scope because the merchant never touches unencrypted data, Thorness said
At the same time, developers control the look and feel of their application, he noted.
Forte Checkout, another offering, works with or without a wallet, either retaining and tokenizing data or calling upon consumers to re-enter information on subsequent visits to the site. Its for cards and ACH, Thorness said.
The company overlays such products onto merchants sites, and thus does not need to redirect visitors to other sites, he said.
A new version of its approach to bill payment could become available early next year. A "Kickstart" promotion is offering new developers or merchants free processing worth $100,000, Thorness said.
VERIFI WANTS MORE DISTRIBUTION
Verifi, which was launched nine years ago, began working with ISOs and other resellers two years ago to promote one of its products, the Cardholder Dispute Resolution Network, or CDRN, said Tony Wootton, senior vice president and chief revenue officer.
"Our focus is managing chargebacks, and our flagship product is focused on mitigating chargeback risk," Wootton said.
Chargebacks, the name for refunding a consumers funds when he or she disagrees with a credit card charge, reduce merchants revenue and can damage customer relationships, he noted.
Disgruntled consumers contact the card issuer about 86% of the time when they want their funds back, Wootton said. They seldom approach the merchant, he added.
That phone call or online chat sends an automated impulse to Verifi, which then alerts the merchant to the problem by posting them to a computer portal.
That gives the merchant the opportunity to refund the customer directly or allow the chargeback to go through the system and fight it later. Merchants can have the system customized to fall in line with rules they specify, such as return the funds if for disputes of under a certain dollar amount.
ISOs can use their familiarity with their merchants to "pre-qualify" accounts, Wootton said.
ISOs mark up the alert fee that Verifi charges merchants each time a potential chargeback occurs. The company charges a range of fees per alert, depending upon volume and other factors. Fees typically come to about $40 per alert.
"Were seeing exponential growth in the channel because ISOs talk to ISOs," he said.
The Cardholder Dispute Resolution Network works for large and small merchants, Wootton noted.
Merchants can integrate the service with their IT systems or choose a portal-based approach that doesnt require integration, he said.
The alerts are virtually all accurate because theyre not initiated unless a consumer complains, Wootton noted. The process kicks in immediately when the dispute arises, giving merchants as much time as possible to react.