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The Complicated World of Integrated Software

From ISOs to ISVs, the players that put solutions packages together for merchants are learning that working together comes with costs and benefits. The trick is figuring out which outweighs the other.

Nothing like a $1.65 billion acquisition to drive home how important independent software vendors and value-add resellers have become to the merchant services industry.

That’s how much payment processor Vantiv Corp. paid in 2014 for independent sales organization Mercury Payment Systems. It was one of several high-value acquisitions payments-industry companies completed to better secure links to ISVs and VARs.

ISVs develop business-management software and VARs sell this software, along with computers that operate the software, to merchants. And in recent years they have become a valuable customer-acquisition channel for payments companies, one with many benefits and a few challenges.

With merchants asking that payments be integrated with other business functions, a number of payments companies are eyeing ISVs as a conduit to merchants. Indeed, merchant acquirer TransFirst Inc. says these developers are vital. “As we start thinking about integrated solutions, our business is shifting to an integrated model,” says John Shlonsky, TransFirst chief executive.

Even PayPal, the payments unit of online marketplace eBay Inc., is courting developers to integrate PayPal acceptance into their software. It launched a campaign in the second quarter of 2014 to recruit software developers and companies that sell their wares.

Source: Digital Transactions

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http://www.nxtbook.com/nxtbooks/dt/201501/index.php?startid=16#/20