Guest Analysis: Evolution of an ISO – Provider and Partner

Greg Cohen

July 9, 2013 – Over the past fifteen years, the ISO marketplace has reached an all time high. What was an industry dominated by just a few hundred is now flooded with more than 2,000 providers ranging in experience, scope of offerings and size. Even with commoditization and tighter margins, leading ISOs have continued to thrive.

But, with the new wave of players in payments, varying in size from start-ups to mega-giants, what’s next for the ISO? Leading incumbents are faced with a key business decision – remain as you are, augment your existing business model (possibly even changing direction) to compete in the quickly evolving commerce space, expand your portfolio and reach through new partnerships or look to develop a refined mix of the three. Regardless of an ISO’s specialization, with the advent of mobile technologies ranging from tablet based point-of-sale (POS) to mobile payments to integrated marketing and commerce applications, there’s no denying that the future of payments is about much more than processing and merchant services. As EMV liability dates approach, merchants are rethinking their points of consumer interaction, customer adoption of mobile solutions continues and the business landscape gets even more competitive. Even the top ISOs, agents, ISVs and value-added resellers (VARs) will be forced to evolve.

Of the business decisions mentioned earlier, partnership is one where we’re already witnessing great momentum. Whether you’re reading ETA Currents, Transaction Trends or another industry publication, announcements of partnerships between existing and new entries in the world of payments are a daily occurrence. And, even longstanding relationships, like those between payment processing companies and card issuers, are expanding to drive new opportunities for both parties.

Case in point is Merchant Warehouse, a 15-year-old entrepreneurial ISO that began its strategic evolution in mid-2011. Leveraging existing development and technology assets, Merchant Warehouse developed and launched the first holistic payment acceptance technology – an open platform that offered ultimate choice and flexibility to the merchants. Out of the gate, the organization understood the power of partnerships. They not only needed partnerships with POS companies, but also emerging mobile commerce application developers like LevelUp, Perka, and Digital Retail Apps. And, it didn’t stop there as they continued partnering with organizations like ISIS, Visa and a myriad of new point-of-sale (POS) developers. Launched early this year, the Genius Customer Engagement Platform is a great example of how partnerships fuel the movement forward in the world of payments.

Strategies developed today will serve as the beacon for many in the space as they focus on maintaining relevance with their customer base. Striking a balance between core competencies, new capabilities and delivering solutions and services that not only meet the needs of merchant today, but also scale to what’s just around the corner is key. For many, partnerships will sit at the foundation of these strategies, allowing for accelerated progression with expanding offerings, increased reach and yielding new revenue opportunities. Working together, old and new, can realize mutual benefit while fostering the movement to mobile.
[spacer height=3] [divide] [spacer height=3] Greg Cohen is Chief Revenue and Strategy Officer (CRSO) – Merchant Warehouse