Payment Facilitators, as well as the subset offering Payment-Faciliation-as-a-Service to software companies to enable payment monetization, continue to struggle with in-person card-present transactions. This mode of payment accounts for more than 75% of electronic payment volume, so this is an alarming stat.
The reasons for their struggles are multi-faceted and somewhat specific to each provider’s strategy, but we are going to tackle the topic generally in this post – and you can always reach out for more details directly.
First and foremost, there are thousands of payment acceptance devices manufactured by payment terminal providers. Historically, large companies such as Verifone and Ingenico dominated the market – with clear lines between the role of a device manufacturer and the role of a payment service provider (processor/acquirer). When a new device came to market, it required certification (a 9-12 month, expensive process) – and manufacturers went to the largest processors first to open up the most addressable market. Naturally, almost every device deployed in the United States is certified to First Data (now Fiserv).
Second, building fully functional, easy to integrate with, easy to use and support payment acceptance devices for multiple types of transactions (POS, Mobile, Tap, Dip, etc) is expensive. When we say that, we’re talking hundreds of millions of dollars and years. The “design – build – test – manufacture at scale – distribute” cycle of hardware slows the innovation rate when contrasted to similar cycles in software.
Third, most PFACs are designed and built for e-commerce or card-not-present, first. The most common example is Stripe, which was architected to enable e-comm storefronts to quickly and easily accept payments. They often grow so fast on the basis of card-not-present alone, that getting card present right becomes a distraction or an afterthought.
At Forward, we believe ignoring such a large portion of your target payment volume is a mistake. It will show up in lower attach rates (number of your software companies using your payments offering), disadvantaged pricing (as interchange is lower for card present), and a lot of wasted development cycles. We experienced this ourselves while building software companies that monetized payments for 20 years.
Given this deeply held belief, we architected our offering with card present top of mind.. How we partner with the payments ecosystem is designed to ensure we can support almost every device ever deployed in North America. We can explain more when we connect live or by zoom, but for now, ensure your payments strategy takes into account where more than 75% of your payments profits will originate.
