ETA Expert Insights: Is the New Agent/ISO Really a VAR?
How Technology and Opportunity Continue to Drive Evolution and Expansion for Agent and ISO Resellers in the Payments Space
by Jennifer Reichenbacher, SVP of Channel Marketing at Paysafe Group and member of the ETA Retail Technology Committee
A good portion of the payments space, especially as it relates to small and medium-sized business (SMB) enablement and support, is driven by a very strong reseller community. Independent Sales Organizations (ISOs) and Agents who resell payment acceptance and, more recently, a variety of value-based products and services
Ten years ago, or even less, Agents and ISOs focused primarily on a transactional sale. Whether via digital acquisition or face-to-face sales, the conversation typically began and ended with the dollar. Free equipment and low, or meet or beat, rates were the hook and, as an industry we commoditized the market driving to an inevitable ‘race to the bottom.’ On the other side of SMB enablement, at the time, were value-added resellers (VARs) – a group a bit different than agents and ISOs as VARs focus on reselling more integrated and/or technical solutions. Think security and IT services and point-of-sale (POS), business management solutions and the like. As we entered the current decade, these groups, while both resellers in the space, were very different, with unique sales approaches, varied offerings and distinctive revenue generation models.
Enter a new world of independent software developers (ISVs), who had, in the past, reached the last mile of connectivity with the SMB community either through VARs or through in-house direct sales efforts. Over the past ten years, we’ve witnessed true evolution in the ISV space, not only as consumers, but also as payments professionals.
Cloud-based POS systems hit the market and haven’t stopped. Hundreds of new entries have gained traction and opened up new opportunities for SMBs to take more control of their business through leveraging integrated tools and enhanced functionality to manage things like inventory, payroll, taxes, recruiting, and more. What historically was a $5,000 or more up-front investment is now attainable, perhaps with a bit less functionality, for no more than $150 per month. And, it’s not just POS – there are apps for individual services, like order ahead. There are SMB bundles that focus on social and reputation management. There’s the digitalization of legacy functions like gift and loyalty, and pretty much everything in between. For SMBs, the world of payments and acceptance solutions has evolved into a similar experience that we, as consumers, have on our smartphones and/or tablets.
One major positive is that SMBs now have affordable access to a myriad of new tools and products that are designed to help them build, manage and grow their business. With that said, these new solutions also require a completely different level of support along with a most consultative sales process. To compete, Agents and ISOs have evolved their sales practices to not only add new products and more sophisticated options to their arsenal, they’ve also advanced their sales approach, with a keen focus on delivering needs and value-based solutions that truly make a difference versus simply selling on price. This transforms their model to more of a VAR-like experience, not only for SMB customers, but for their sales, operational and support teams as well. That is just on the product and service side – what these teams are truly reselling. These groups also now need to be educated and educating on contactless, security, PCI, crypto and so much more. Today, Agents and ISOs, and their payment service partners (PSPs) as well, need to know more, do more and offer more, to differentiate themselves and win business.
The new norm in payments is no norm. What was a fairly stagnant marketplace for decades is now one of the most interesting and ever-changing. And, for those that keep their finger on the pulse and catapult their business into the future, there will be continued and even accelerated success. Smarter conversations with SMBs, selling solutions that they actually need and will make a true difference to their business, will, in turn, deliver deeper relationships and stickier customers in the long-term.