A common theme we heard during conversations with our Resellers at ETA TRANSACT 14 was:

“There is a horde of new “solution provider” competitors trying to sell direct-to-merchant with mobile POS offerings.”

PYMNTS.com publishes a monthly mPOS Tracker report that currently tallies more than 100 providers, most of which view direct sales to merchants as the quickest, easiest way to try and set a footprint in the payments space. Many are gambling (with venture capital dollars) that the SMB market is ripe for disruption due to confusion or frustration with often-complicated fee systems. The sales pitch is alluring: “By implementing a consumer-market tablet or smartphone, merchants can obtain a more cost-effective, flexible and adaptable mobile POS solution to replace or avoid investing in traditional point-of-sale solutions.” While it’s true that a few have adopted hybrid approaches in which they are forging some Reseller relationships, most are banking on avoiding channel costs through direct sales. In that way, they don’t need expensive “feet on the street.” Instead, they can rely on the telephone or email as their primary support infrastructure, and they can compete by shaving costs. The question is, what gets lost in the shavings?

Valuing an mPOS Solution

Tablet- and smartphone-based systems can accommodate POS payment software while also providing merchants other capabilities, from sending digital receipts via email or text message to more sophisticated functions such as inventory tracking, customer relationship management and accounting features. When a tablet and POS software are paired with peripheral devices such as cash drawers, scanners and printers, the complete solution can be simpler and less costly to operate than traditional proprietary POS solutions. In addition to the nuts and bolts of the mobile POS solution, Resellers have other advantages over simple solution providers. They can:

  • Provide a premium level of support to their customers
  • More easily tailor solutions for their customers’ specialized needs
  • Maintain a personal, face-to-face relationship with the SMB merchants.

In addition, with all the new solution providers entering the market, casualties are bound to mount quickly, which will reinforce in the merchant mindset, the value of sticking with a proven Reseller. During ETA, we heard a number of discussions about how some emerging competitors are trying to execute dramatic shifts in business models, and as a result, are experiencing widespread complaints over poor support, and are stumbling in delivering on their promises.

How Resellers Can Succeed

The value a Reseller brings to the merchant relationship is one built on trust. Merchants trust the Reseller to provide them with the best solution to fit their needs, and to support that solution once implemented. The challenge Resellers have, is determining who their solutions provider will be. But it’s not that difficult. Here are four simple building blocks for Reseller success:

  1. Clarity – Help merchants wade through an increasingly confusing landscape and make sure you are able to provide customers with new tablet- and smartphone-based options that fits their specific needs.
  2. Simplicity – Find a turnkey platform with an established payments provider that is not going to turn compete with you down the road.
  3. Value-Add – Create or assemble a suite of back office and value-added apps and services that provide the merchant with an attractive business management mPOS solution.
  4. Teamwork – Work with a partner that has dedicated payments security experts and the chops to keep up with PCI changes, processor certifications, and emerging options such as mobile wallets and EMV.

Resellers generally have established a level of trust with customers that direct-to-merchant operators just can’t match. Those that take a proactive approach to the new mPOS challenge can create even stickier relationships, can increase revenue opportunities, and can attract new customers. VeriFone has years of experience working with Resellers and is committed to providing them with tools to be successful. Check out some of the resources available, including selling guides and more, at www.VeriFoneZone.com.