Develop Solutions That Matter to Growth!
The more businesses I visit, the more I (humbly) realize how spot on I was in my prediction in 2015 – as expressed in my book “Smart Business Guide to Credit Card Processing”- that to grow in transaction processing industry a robust POS system is essential. I was the consultant to the CEO and the President of one of the largest ISOs in the country with a valuation of nearly $5 billion dollars with over 350,000 active merchants. In 2019, I evaluated all departments: sales, underwriting, deployment, risk management, customer service, and technical support. I found numerous errors and incompetencies and conveyed honest and unapologetic warnings about them, almost all of which the then-newly hired President ignored because of reasons that are beyond the scope of this article to be discussed. The team had stopped developing a POS system the company had embarked on for nearly one year. I thought that was a huge mistake. They did not follow my advice. They suffered from what most others were and are: tunnel vision. As a result, this ISO is still dependent on a few other POS system they have no control over, both the hardware and the technical support. The vast majority of the large ISOs with deep pockets are in the same position. Such dependencies create massive inefficiencies internally and ultimately lead to merchant dissatisfaction, higher attrition rate, loss of revenue, and decline in the company’s overall value. I am amazed, but not surprised any more, at how companies focus only on increasing their merchant count and put short-term profits ahead of long-term objective of increasing value for all stakeholders. This tunnel vision has existed in the past at least 40 years and will continue well into future. I would like to respectfully make a blunt statement here that many long-time executives have agreed with me privately, but no one feel comfortable to mention them publicly. The reality is the vast majority of operators in this industry are not highly sophisticated and educated operators who care about solutions and service to merchants only on the surface. They have grown their companies only by being good salesmen. But creating solutions that could increase stickiness and focus on real and meaningful service are indispensable, yet mostly minimal if not absent among some!
Only few operators like Clover, Square, and Toast will be the captains of the ships to navigate to where they want to. They have remained in complete charge while leaving others stranded on the shore watching–being aware or not–their own demise or sufferings in despair!
All things being equal, which naturally includes a caring, competent, and well-compensated staff too, having a commanding position is vital to continuity and increasing value.
If you want to grow and be in charge, create your own POS system. I would also work on a compelling and integrated time and attendance too. You will be glad you did!