Transact 14: Powered by ETA wrapped up April 10 at the Mandalay Bay Resort and Casino in Las Vegas. Under Breaking Industry News on our home page, we posted a series of interviews done with payment professionals who met with The Green Sheet during the show. Thereafter, we received a number of requests to include the interviews in our magazine so people will be able to access them easily in our archives.
In response, here is a portion of the interviews conducted. The remaining perspectives will be published in a future edition of The Green Sheet. Thanks to all who shared their goals for the event, insights into new products and emerging opportunities, how we can do a better job of securing the payments ecosystem, how to navigate the historic changes taking place in the industry, and more.
Dwyre came to Transact 14 to reinforce mocapay's relationships with its channel partners. Dwyre said the goal of the Denver-based firm is to make mobile payment acceptance easier for merchants, ISOs and processors. He said mocapay's approach to the market is unique because the mocapay app is merchant-branded, unlike the app offerings from TabbedOut and LevelUp, for example.
In addition, clerks using mocapay's app at the POS need only enter a customer's cell phone number, and mocapay does all the legwork behind the scenes to make the app work, Dwyre stated. He also noted that mocapay is a true payment gateway that works with industry incumbents rather than trying to "disintermediate" them.
To that end, the mocapay app is integrated with Chase Paymentech, Mercury Payment Systems and First Data Corp., and can securely handle any type of transaction – gift card, coupon, loyalty, debit or credit cards, even decoupled debit.
Way up on the 28th floor of the Mandalay Bay Hotel & Casino, TouchSuite executives Farshad Tafazzoli, Chief Products & Marketing Officer; Gary Breeds, Business Development Manager; and Mike DePinto, Executive Vice President, demonstrated TouchSuite's new Firefly POS system.
FireFly is the second POS system the Boca Raton, Fla.-based ISO has designed specifically for the salon vertical market. FireFly is cloud-based and, instead of running on the Windows operating system, like the company's first salon POS system, it is Android-based. For added flexibility, users can also log into the system via Android tablet or Apple iPad devices.
The system is fashioned to be highly intuitive. "We designed it so that we could sit down with our parents, who know nothing about POS systems, and they could catch on quickly, with minimal instructions," Tafazzoli said. In time, a version with some of the system's features will be available for smartphones, as well.
Among the functions demonstrated on a pleasantly uncluttered user interface were:
On the back-end, salon owners can keep track of inventory, vendors, types of services each employee and/or independent contractor offers, arrange to split transactions among multiple cards, and use TouchSuite's patented technology for processing multiple merchant identification numbers in one salon environment. Merchants can also use data on clients' past services to gear offers specifically to them, Breeds noted.
Some POS products are generic, while FireFly is a "category killer," Tafazzoli said, adding that once salon owners start using it, "they're going to love it. "
Clark helped kick off the ETAU (short for ETA University) sessions for Transact 14 by joining a panel at 9 a.m. on April 8. The topic was mobile, POS and Main Street realities. Clark reported that the panel covered big data and marketing, use of consumer metrics and related issues. And, yes, people straggled in a bit for the first few minutes, but by the time the panel really got rolling, the event was well attended, he said.
Clark founded Scottsdale, Ariz.-based Spindle three years ago "to drive mobile commerce with a new, fresh approach" by combining mobile marketing with payment processing. Recently, Spindle acquired Yowza!! (Yowza International Inc.), a coupon offering platform used at 95,000 merchant outlets, with an app downloaded by 2 million consumers, Clark noted. Soon to come will be a software-as-a-service mobile wallet. Clark was at Transact 14 to connect with resellers and partners. "It seems natural ISOs and agents would be interested in selling [Spindle] the same as they'd sell a VeriFone terminal or any other platform," he said. "It's a revenue generator – new to market – and, bundled with mobile marketing, can be sold as a package."
He added that there will need to be deeper involvement with merchants at the POS in order for mobile wallets to take hold as a payment mechanism, and that mobile phones are far better authentication devices than plastic cards.
While many Transact 14 attendees were contemplating what to have for breakfast Wednesday morning, First Data Corp. President Guy Chiarelli already had several meetings under his belt, with many more planned for the day. He believes the mega processor has been so dramatically transformed in the last year that he refers to it as "the new First Data."
The company is now "tapping into Silicon Valley and Silicon Alley innovation and technology for small and medium-size businesses, trying to be sure that everything is secure from the start, and focused on small-business owners being able to grow their business in a simple and understandable way," Chiarelli said.
In addition to one-on-one executive meetings, First Data hosted a dinner Tuesday night for more than 200 ISOs to share the company's new small business solutions strategy. Integral to this strategy is Clover Station, a new POS and business management solution for merchants. The platform includes a "slick and sleek POS device that has end-to-end security" so all the issues in retail around protection at the POS, recently evidenced by the 2013 Target Brands Inc. breach, are all taken care of within this product suite, Chiarelli said.
The core platform is cloud-based, with remote management and 24/7 support. Chiarelli referred to it as "small business in a box" because it comes bundled with multiple features merchants can easily employ right away. These include loyalty programs as well as real-time customer analytics that enable merchants to devise offers tailored to specific demographics or individuals based on actual customer activities and preferences.
The platform also offers an open application marketplace, so developers can design customized apps that merchants can download. Thus, with this platform, smaller merchants can now enjoy tools previously available only to midsize and larger businesses, Chiarelli noted.
The Total Merchant Services team was on hand at Transact 14 to introduce the company's new POS and marketing solution, Groovv. "Our mission is helping our customers grow and manage their business and really helping them succeed, so it was important to us to add more value to make their lives easier," said Shelley Plomske, TMS Vice President Product. "With this we are able to help our sales partners succeed in a white-label fashion."
Plomske noted that TMS provides all service and support. "We deploy it, and have on-site installation where we walk merchants through how to set up and teach them about the solution's features. Our support team is available 24/7, helping them even if it's just a merchant saying, 'I need help closing my batch' or 'How do I add an item?'"
Groovv is available on a tablet, an all-in-one POS solution or a mobile device and has three different software solutions geared for different levels of business complexity. Plomske said Groovv is also intuitive and removes the barrier of intimidation associated with some systems.
Groovv's mobile and social marketing tool is designed to increase traffic and drive repeat sales, and takes the guesswork out of marketing, according to Plomske. "Using the Groovv dashboard, with one or two clicks, a merchant can choose from hundreds of offers and themes, customize an offer, preview it on a mobile website and send it out via social media, email or text message."
She noted that Groovv also gives merchants access to their data so they can tell what's selling, and from what departments, and combines that with the online transaction portal to bring all the data together. "We're moving toward a value-based solution, as opposed to just selling payments," Plomske said. "And this helps our partners become more consultative sales folks."
At Loop's booth at Transact 14, Will Wang Graylin, the company's Chief Executive Officer, had a message for The Green Sheet's audience. "We finally have a mobile commerce solution that helps incumbent acquirers to provide more value to their merchants, more security and better interactions with their consumers in a new smart wallet application that requires no changes to the existing merchant infrastructures."
This step forward is possible due to a Loop innovation called magnetic secure transmission (MST). "We've broken the last-inch problem to allow mobile devices to communicate with existing points of sale through the rails that have already been laid, which is the mag stripe communication channel," Graylin said. "We turned every POS into a contactless payment terminal."
Graylin noted that the Europay/MasterCard/Visa (EMV) train has already left the station, but it is slow moving because you have to lay the tracks while the train moves. "We are leveraging the rails that are already there for mag stripe cards, and we are simply putting the mobile payments cargo on a fast speed locomotive to get more secure transactions to their destinations faster and much cheaper."
He added that MST capability enables Loop to deliver not only the static track data commonly provided today, but also one-time dynamic track data just like EMV does; it also allows issuers to provide tokenized data from the consumer's mobile device directly back to the card issuer or the token service provider (TSP) for an end-to-end secure transaction on the existing mag stripe rails.
"We're not charging tolls to the issuers to utilize this mobile, smart wallet channel, and we're not taking away transaction revenue from the acquirers," Graylin said. "But we are allowing acquirers to offer more to their merchants and share in the revenue from delivering loyalty deals and rewards between merchants and their consumers."
According to Graylin, Loop can be put into a new smartphone for less than one dollar, and Loop is working with various device OEMs to embed Loop MST in a variety of mobile devices over the next year. "The time has finally come for consumers to have a better mobile payment experience," he said. "The great news is merchants do not have to change their infrastructure to accommodate and can leverage the new smart wallet channel to better find and keep customers."
This is the first year Coalfire Systems Inc. exhibited at the ETA's premier event. Matt Getzelman, PCI Practice Director at Coalfire, said he and his colleagues have attended in prior years and made so many good connections they opted for a booth this time around to provide a dedicated place to meet with current and prospective partners and clients. And at the Coalfire booth, the buzz phrase was "defense in depth."
What Getzelman means by defense in depth is for businesses to have multiple layers of security, and to think of it as a holistic process, not as just something to check off and forget about. He said the recent large data breaches serve as reminders that it's time for organizations to reevaluate their security and compliance, especially merchants and processors.
"There's an explosion of malware and easy-to-use tools on the black market, so it's easier than ever, even if you're not a traditional hacker, to get card data," Getzelman said. "Criminal syndicates are going after easy targets, and people need to ask, 'Are we the low-hanging fruit?'"
Getzelman identified three areas in which we, as an industry, failed to stop hackers in recent high-profile breaches. "First, attackers had to get malware... We had a chance to prevent these programs from getting into retail environments, and we failed," he said. "Second, we were unable to prevent propagation across the organization instead of restricting it to one location.
"And finally, they had to be able to access the cardholder data and route it out of the environment. So we had three opportunities to stop and mitigate the attacks, and we blew it." Ultimately, security solutions have to be a combination of everything applicable, he added.
"One exciting thing is the emerging payment technologies we're seeing offer additional options for merchants to protect data at the source. Point-to-point encryption, EMV chip and PIN in the United States are going to be tools that protect sensitive data at the point of interaction, so I would implore organizations to explore and research these technologies now."
BlueSnap Inc. Chief Executive Officer Ralph Dangelmaier and his colleague Kelly Seelig, the company's Vice President, Marketing, want to bring the world to U.S. ISOs and merchants, so at Transact 14 they were wining, dining, networking and helping to inform their industry peers. To that end, Dangelmaier ran an educational session at the conference on doing business in the BRIC (Brazil, Russia, India and China) region; Seelig was the moderator for a session on marketing.
Dangelmaier said interest in the BRIC session was strong. "We had someone from Russia, from Brazil, from India, and someone representing China Union Pay who is American, but knows China very well," he said. "We explained how the local people in those countries want to buy goods online using local currencies, local languages, and local payment types – and the need to educate ISOs and merchants on that."
Seelig's marketing session covered the basics. "We talked about how to build a plan, how to think about marketing strategically, how to integrate PR, social media and advertising – and how that all works together for e-commerce and storefront businesses," she said.
Dangelmaier has found that few U.S. merchants understand how to sell outside of the United States. "There was a recent article that said only 27 percent have the ability to do it, which means 73 percent don't," he said, adding that "guys like Stripe and Braintree get significant press coverage about sexy APIs that let merchants build their own checkout pages, but they don't enable them to optimize globally."
BlueSnap saw a need it could fill and rolled out its global gateway about a year ago. The company markets prebuilt checkout pages that "encompass most currencies and most languages in 80 countries, and 110 of the most prevalent payment types in those countries," Dangelmaier said, adding that he is in talks with "a few large ISOs right now who are really strong domestically but want their domestic folks to sell overseas."
Dangelmaier said physical stores are seeing between 5 and 15 percent of sales going online, and those are interactions that are no longer going through the POS. He feels that most ISOs are "swipe guys" and, by not helping merchants also move into international e-commerce, "they are missing out on a big revenue opportunity." It was Dangelmaier and Seelig's mission at Transact 14 to let exhibitors and attendees know just how easy it is to work with BlueSnap to bring an international commerce value-add to their merchants.
Thinking about the current state of the industry, Dangelmaier said, "I've been doing this for 25 years and never seen anything like this. There are 250 different payment types, and most people think of five; you have all these people who don't have bank accounts trying to buy stuff; you have 17-year-old kids in Brazil saying they can compete with companies like First Data.
"All this stuff is happening at once. Before it was like, wow, there's an ATM; we spent 10 years going, wow, there's an ATM. Then it was, oh, there's an Internet – 10 years of that. And now this is like all these new things hitting you – the convergence, the disruption, the risk and the opportunity – all at once. It's the Big Bang of payments."
From a comfy corner of Vantiv's busy booth at Transact 14, Jonathan Ellman, Vantiv's Senior Vice President, Regulatory Compliance and Government Affairs, sat down with The Green Sheet to share insights about recent developments in the regulatory sphere and how they are affecting the payments landscape.
Ellman said that regulation has risen dramatically on the industry since the financial crisis that gripped the country with the collapse of Lehman Brothers in late 2008. "Merchants who are providing goods and services to consumers are being asked to provide those services and goods in a manner consistent with consumer advocates in the government," he said.
Ellman noted that, by executive order, the government launched an interdepartmental initiative called Operation Choke Point, which is specifically focused on our industry as "the best vehicle they could see to make sure that bad-acting merchants are cleansed from the ecosystem."
In response, the industry is establishing more of a robust, comprehensive and dynamic culture of compliance within organizations. "This means every department is impacted in one way, shape or another, and it's really important that we do that both for our own protection, and also for our clients and their consumers," Ellman said.
Vantiv has endeavored to help educate regulatory agencies on how the industry works. Ellman said that in an attempt to cleanse the system, the government can overreach, which can increase costs and negatively affect consumers, as well as stifle innovation. "I don't necessarily agree the level of pressure is appropriate to the problem," he said. "So we are working very hard to work cooperatively ... but also to articulate our position."
Ellman lauded the ETA's efforts in this arena, stating that the association has done a fabulous job and has been a strong voice for the industry in working through regulatory issues. "Today, at this conference, they released a comprehensive set of guidelines for ISOs and processors on how they should underwrite, monitor and otherwise manage their relationships with their customers," Ellman said.
In the midst of ensuring that myriad activities deliver the desired punch for Transact 14 attendees, Electronic Transactions Association Chief Executive Officer Jason Oxman stopped in at the media room to share his enthusiasm for the ETA's "rebranded and reenergized" premier event.
"We've expanded the schedule so we're three full days now including high-level keynotes, 77 conference sessions and an exhibit hall that is larger than at any show in our history," Oxman said. "It's really become a truly global hub of activity in the payments industry."
Oxman believes the show's rebranding captures the expansion of the industry to include global technology companies entering the payments business. "Our show floor includes the world's leading payments and technology companies that are offering innovative new products and services for merchants," he said.
In addition, he stated, "More payments industry business gets done during the Transact show than at any other place on earth. You see all the meetings taking place, all the discussions on the show floor. There's an incredible amount of business getting done. It's really efficient for attendees because all their current and prospective customers are here. If I do 20 meetings while at Transact for three days, that's 20 separate trips to see customers that I don't have to do."
At the conference, the ETA was also spreading the word about its advocacy and educational activities. "ETA has been very active as an advocate for the payments industry in Washington, on Capitol Hill and with federal regulatory agencies," Oxman said. "We've also expanded our educational initiatives, including our ETA CPP [Certified Payments Professional] program. Nearly 1,000 industry executives have participated in the certification program. We're proud of the professional education we're providing; it's a unique member benefit and is helping our industry grow."
The ETA's Transaction Trends magazine also sponsored the media room, which was graciously hosted by members of the London-based SkyParlour public relations team. It was a much appreciated haven for media representatives.
While Jeff Fortney, Vice President, ISO Channel Management at Clearent LLC, was manning his company's booth at Transact 14 on Wednesday afternoon, he divulged a secret. "When I come to a show, I concentrate on two objectives only," he said. "If I meet them, the event is a success; if not, I'm not OK."
His first objective this year was to find a partner to provide a good solution for medical offices. "One of my ISOs said he needs a medical solution that'll work alongside HIPAA [Health Insurance Portability and Accountability Act] requirements, so I'll spend my time when I'm not stuck at the booth looking for that," he said.
The second objective was to get the word out on the Clearent Payments Platform, the processor's recently rolled-out open application programming interface (API) that integrates with e-commerce websites, mobile apps and back office systems. "You have a POS system, and it either works directly with the processor like a terminal or it works with a third party like a gateway," Fortney said. His message for ISOs: "Now that we have our API, you can map to our API and take the third party out. This can save money for you and your merchants."
By Thursday afternoon, the last day of the show, Fortney had a smile on his face and a lilt in his voice as he said he'd met his two objectives and was satisfied.
The buzz at Apriva's booth on Transact 14's exhibit hall floor was all about Apriva Pay Plus 3.0 and its web companion merchant portal 1.0 that is set for release on April 28. A private conference room within Apriva's ample booth was where Benjamin Hurley, the company's Director, Mobile Product Management, and Stacey Finley Tappin, Senior Vice President, North American Sales & Marketing Communications, discussed the key features of their new offerings.
Here are some of the points they made about Apriva Pay Plus 3.0:
Hurley and Tappin also emphasized that Apriva Pay Plus 3.0 does far more than process payments. "Merchants receive push notifications on transactional activity," Hurley said. "We don't want end users to just use it to process payments. We want to create a dependency. ... We notify them daily of the amount cleared that day and will let them know when transactions are taking place in real time."
Tappin added that the product's interactivity "keeps [merchants] engaged in the product, and it becomes a business tool they use on a daily basis."
Apriva Pay Plus 3.0 also offers detailed analytics on activity within the mobile application. Hurley said the solution "provides data on where customers are activating geographically, by state and city ... demographic data, anonymized on gender, age, etc., to create end-user profiles; top devices used; which features are used, and which ones nobody uses." All this data is then provided merchants in monthly reports, and the data can be exported to accounting applications, Hurley added.
Hurley noted that the merchant portal's web companion is also white-labeled and hosted on the customer's URL in Apriva's data centers. It is built on responsible design technology, which allows the portal to adapt as needed for any screen interface.
In addition, Tappin said that the web companion is integrated with customer care via a ticketing system, and its inventory capability can create items, prices and descriptions that representatives in the field can automatically sync up with, so no manual entry of updated product prices and features needs to be done.
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