A blog about entrepreneurship, technology and big data - Payment Analytics, Social Media Management & Marketing

Monthly Archive: : February 2014


ISOs: Adapt or Die?

A merchant starting a new business and needs to accept credit cards usually starts with their bank for guidance. The banks either directly offer the processing service or will guide the merchant to a regional or national ISO (Independent Sales Organization). ISOs have become the de-facto way for most small and medium sized businesses to gain the capability of accepting credit cards. ISOs generally offer better rates and greater personalized support than available from the larger banks. So the benefit of ISOs to the small or medium business owner was always clear and unambiguous. Over the past few years, though, that has been changing steadily, and ISOs should see the need to adapt to changing times or risk dying off completely.

It began with Square, Inc., a Silicon Valley startup that pledged it could provide credit card processing to anybody with a smartphone, whether it was for a business or just an individual. By plugging in the small white square-shaped reader to the headphone jack of a smartphone and installing a small app, a person could turn their cell phone into a mobile POS system. PayPal, Groupon and other technology companies also have a deep interest in disrupting the local payments business. The technology companies are able to add value to the merchants business beyond payment acceptance. Groupon for instance can help the business attract new customers through its daily discount marketing program. So where does all of this new competition mean for the ISO business?

It means ISOs must change their conversation with merchants from cost of credit card processing to one of driving greater business value. And there is significant new revenue opportunity to ISOs that are able to make this transition from selling cost to selling value.

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The Importance of Data for Small Business

The “Mom and Pop” shops of yesteryear are dying off, or rather, being killed off by national retailers such as Wal-Mart, McDonald’s, and other national chains. On the surface, it might seem that this death is because of name brand recognition, but is this really all that is happening? After all, our neighborhoods still have the older generations who know and recommend these small businesses, and yet the larger merchants get the majority of the business. Much of this comes down to one crucial detail: the big merchants know their customers better. Read More