Acquirers need to bridge small merchant education gap
A recent survey of U.S. retailer merchants has some warning signs for those in the acquiring community. There is growing interest in smart POS solutions that do more than just accept payment, but very few merchants rely on acquirers for information about these next-generation solutions.
The survey conducted by PYMNTS, in collaboration with Aevi, reveals that more than half of those with annual revenue up to $500,000 say they have heard of smart POS systems from other business owners. The percentage who get their information from acquirers is in the single digits. As interest in smart POS grows—about two-thirds of merchants in that revenue range have mid to high levels of interest in such a solution—they are going to need education on what can work best for them. If they’re not getting it from acquirers, independent sales organizations, and street-level sales agents, they will surely get it somewhere else.
Because other business owners are the largest source of information on new solutions for these merchants, acquirers risk seeing themselves disintermediated if they are not able to step up to the plate and take a more assertive role.
As we’ve seen in this digital age, once something goes viral it tends to dominate the conversation and crowd out discussion on alternatives. Companies seeking to sell and support new smart POS solutions primarily via the internet, can afford to flood the web channels with information and testimonials aimed at winning over new converts.
The good news from the survey is that small businesses generally are happy with their payment solution providers. But more than half of those with revenue up to $500,000 are more than willing to switch to an alternative. A cheaper price—naturally—would be motivation to switch for the largest percentage of merchants, but it’s closely followed by ease of use and the need for an integrated all-in-solution.
Step out of the comfort zone
The challenge for the acquiring community is to step out of the comfort zone of selling essentially single-application payment terminals. This requires understanding the capabilities of new solutions, learning how to sell them, and training merchants on how to use them. In the digital age, software and services are what define winning solutions; hardware is secondary, as evident in the overwhelming success of Android-based smartphones and tablets.
The dedicated card acceptance terminal is on its way to obsolescence. Merchants need solutions that accommodate multiple consumer-facing functions, that integrate functions such as delivery and payment in one seamless transaction. Merchants also need to embrace the consumer demands for online price-checking and ordering, mobile payments, and even hailing an Uber. They also want integrated solutions with business functions such as inventory and workforce management that can help them maximize profits.
The acquiring community does have an advantage over upstart competitors and that is the ability to provide on-the-ground handholding, both in the selection of solutions, and getting them up and running quickly. Not many small merchants can afford to devote time to test-driving dozens of apps or different hardware platforms. They’ll need help from experts who can tailor suites of apps and services to meet their specific needs.
Ready to be a consultant?
Although smart POS solutions should be ready to go, out of the box, it is up to the local merchant payment solution service provider to educate merchants on how to get up to speed quickly and use a new smart POS system most productively. This will require a new, more consultative approach than we’ve been accustomed to in the small merchant payments market.
This calls for a more consultative approach from acquirers, ISOs and agents. But first they must themselves learn what these new solutions can do, what apps and services best serve different types of merchants, and what the merchant will be able to put to use quickly.
Here at Aevi, our mission is to help next-generation acquirers make the leap in the digital age by helping you leverage your expertise with the most open selection of high-quality apps and services for Android-based POS devices.