Businesses in all verticals are looking for ways to improve customer experiences and build loyalty. One sure-fire strategy is to make payment transactions as convenient and easy as possible. Dana Odom, VP of ISV Sales and Strategy for First American, says businesses are transitioning to electronic payments to provide those experiences. This trend gives managed services providers (MSPs) and value-added resellers (VARs) opportunities to sell payment processing services in a variety of markets.
Odom says a noteworthy shift is occurring in the business-to-business space. Vendors are moving away from the 90-day accounts payable cycle (and the time and costs associated with chasing slow payments) to the efficiency of electronic payments. Additionally, builder supply or other businesses that deal with contractors are changing processes to simply charge an account on file. Employees don’t have to carry cash or checks, and the vendor’s accounting department doesn’t have to invoice.
A payment solution also enables businesses to set up automatic renewal for ongoing services. Odom says this features often means longer customer retention and lower costs of customer acquisition. “It eliminates the reminder call that gives the customer the chance to say they want to cancel the service,” Odom explains.
Formerly Cash-Only Businesses
Some businesses have been reluctant to accept credit cards due to the fees associated with processing. Recent legislation, The Durbin Amendment (part of the Dodd-Frank Wall Street Reform and Consumer Protection Act) permits offering a cash discount. Basically, merchants can include the cost of payment processing in the prices they set, and discount that amount for customers paying with cash. Therefore, merchants can recover the costs of payment processing.
“The technology didn’t exist for a long time,” Odom points out. “It took a while to show up in the marketplace. But we see quite a few merchants using it now.”
Odom says this option can be beneficial for large property management companies that handle large apartment complexes — and collect hundreds or thousands of rent payments each month. With a cash discount program, renters would pay full price for the convenience of paying with a credit card — perhaps on an online portal — but receive a discount if they pay with cash. Selling payment processing to prospects such as management companies, professional offices, and service providers could save them time as well as provide better payment experiences for their customers.
“Customers want to pay in the easiest way,” Odom says. “That can mean paying with a card, smartphone or watch. The businesses who take this seriously have the most success.”
With the emergence of cloud-based solutions, merchants can manage payments on any channel. Odom adds that PCI compliance and hardware upgrades are easier. “It also futureproofs solutions. Changes are easier to support,” he says.
Businesses and organizations in a range of verticals, from government agencies to golf courses and country clubs, veterinary practices, and funeral homes, are embarking on digital transformation to serve their customers better and stay relevant.
Odom stresses that this is an area that MSPs and VARs should explore to grow their businesses. “Keep it in mind as you build out solutions. It’s not going away. It will just become more concentrated,” he says.
Field service businesses such as electricians, locksmiths, and HVAC contractors have traditionally accepted checks or billed their customers. If the customer wanted to pay with a credit card, the field technician would write the card number on a form or call for authorization. Having a card or payment information on file or establishing recurring payments for ongoing service is more convenient and secure. Furthermore, Account Updater service can ensure that the card information is up to date, eliminating the issue of declined cards and extra authorization fees.
Odom says now that field services equip their teams with mobile computers, they can use the same software in the field that employees can access from the office. With this visibility, they can see if the customer has a service contract so they can be charged the correct amount.
Businesses in any vertical want to provide their customers with the most convenient ways to pay. “It’s invaluable to the success and growth of a business,” Odom says.
VARs and MSPs selling payment processing need to ensure the solutions they provide are the optimal choices for their clients. Understand how a payment solution complies with the Payment Card Industry Data Security Standard (PCI DSS) and protects payment data. Also, ensure your payment partner can provide the support your clients need to maximize uptime and efficiency.
Odom comments, “If you talk to a number of payment companies, they all may sound the same. But in reality, they can be very different.” He advises spending the time to do your due diligence rather than a check the box evaluation of a potential payments partner; it’s the most effective way to ensure that the solution you choose will fully align with your business’ goals and customer expectations.