Its All About the Risk

I talk to a lot of different people who are at every different level of the bank card industry every day. From the entry level agent who is knocking on doors to seasoned professionals who are the champions behind tens-of-thousands of accounts. And within all those different positions, there are a thousand little steps that make up each one. Despite all the pieces to this complex industry, its important not to forget where it all begins: Risk Management.

The very core root of credit lending and "cashless payments" is based on the liability of risk; Risk that the funds being presented are legit and risk that they will be paid in good faith.

From that core logic, the entire industry is built. Bank lending rates to Visa....Visa transaction share rates with processors...transaction rates passed on to the ISO's, MSP's and finally the merchants. The processors and ISO's who go the furthest are the ones who strategize on how to collectively assemble the highest volume in both merchants and transactions - as volume can help mitigate risk by diluting the pool. Lower risk = better transaction rates. Better transaction rates = more acquired customers.

The risk management strategy of getting that growth is the magic beans in this business. And assembling the right tools to meet your goals is important. There are no "one size fits all" products out there, just like there is no single business model that governs all of retail, restaurant, e-comm, gas, etc. So its important to choose products that support your risk management strategy in a method that makes boarding merchants easy, stable and suitable to their given environment.

The Carpe Charge product identifies itself in a few primary verticals. First, is the PC user environment. There are millions of businesses using PC's as their primary means of transactions and management with their customers. A perfect setting for Carpe Charge.

Coming soon we'll open up a wider market with our new API that allows POS makers to integrate Carpe Charge right into their system while simultaneously taking them out of scope of PCI, eliminating costly PCI certification fees.

As you assess your risk management specialties, be shrewd in selecting the right products to match your merchant needs. You will find a lower turn over rate and a more streamlined method for keeping a clean and functioning vertical.

Sir Richard Branson Hears a Who

Would I be a fool not to take at least a little bit of input from my elders? Arguably so. But as with each of our individual needs, we'll all choose who passes our filters for advice. Here is one from the dude with the cool airplanes in the sky, Richard Branson.

http://www.virgin.com/richard-branson/blog/in-it-for-fun-not-just-money

Now let me ask this of our audience: How many of you dreamed of a career in the bank card industry? Come on now. Raise your hand. I'll wait.

....

Well, according to your application, seems most of you were looking at being an astronaut, race car driver, stunt man, lead guitar player for a rock band (some of you even the front man/ singer). A few more responsible types had ambitions for becoming a doctor. And a few really boring ones elected lawyer.

Seems few of us really ever laid in bed looking up at the stars and dreaming of how romantic, adventurous, dangerous or glamorous working in the bank card industry might really be.

For those of you who have hit the ball out of the park, please keep our little world a secret. After all, we still need kids to apply to be astronauts one day.

To that I want to want to help you put a face to our company. We adhere to a very strict "no tie" policy. We enjoy what we do. We laugh in the midst of our most hectic days. We enjoy our relationships with our partners. We have fun. We work hard. Very hard. We play hard. We have a passion for what we do, regardless the medium. And it just happens so, that we all landed here in a medium that we've found to be pretty interesting.

Transaction data transfer interesting? Well, sure. As interesting as that can be. But more so because of the people we've met with similar ideas and goals.

One of the very real and very core things that separates us from our "competitors" is that very attitude of who we are. Our turn-over here is so low its almost non-existent. We posses traits and abilities that you cannot hire. And all of this translates into a very great product. But that product is not greater than our people.

If that's who you are, aspire to be, or like to hang around - then we are your company.

Don't like people? Well, we have a great product all by itself too and you are welcome to it all the same. Just don't be offended if we are all smiling when you come through the door.

The Problem With Cloudy Weather

Who's to say which one is better...web based (cloud) solution termainals...or resident server based software? Are there pros and cons to each? Absolutely. But if you could only choose one, which would you choose and why?

Before I go on, I'll tell you that our end goal is to appease both solutions: web based and software based. So you might ask then "isn't it moot to care about the why's of both?" I don't think so and I'll explain.

Web based/ cloud solutions are getting a lot of hype right now. The mobile industry has driven this. Your smart phone works almost entirely on web based solutions. And in this trend, industry would like to sell you on other solutions that behave the same way.

In payments applications, this can present some issues. Namely, that to run a transaction with a cloud based system, you are engaging numerous additional steps to make this happen. For starters, your device must start the whole transaction by first calling up the application from the web. If step one is having issues, you cannot even proceed onto the rest. You are stuck, unable to complete a transaction. The basis of a web based gateway simply demands too many additional steps prior to the transaction actually moving to the direction of the end processor.

For a software based solution, you can at least store the transaction in a batch mode and run it once you have internet connectivity restored. And the transactions have far less steps involved to move toward the processor. In fact, they may have as little as one single step.

In almost anything, less is more. Simpler is better. The less moving parts required to get the job done, the more reliable the solution.

As mentioned above, we'll eventually offer a web based solution, if for no other reason than the market is somewhat divided on the topic and some people simply want them. Thats fine by us. We'll let the market make the decisions on what they want. Until then, we think its important for you to remain aware of the fundamental differences so that you can make decisions that are in the best interest of serving your merchants.

The Front Line

Vendors like us basically have two options to mobilize their product ideas:

a) Become an ISO so that you can complete the circle of setting up a merchant account and product. (which comes with a massive list of fees and logistics)
or
b) Put the product in the hand of professionals who are entrenched in the market and do everything you can to equip and support their mission.

Our aim is focused on the ISO/ MSP/ Agent channel. These are the people who sell the most important and critical pieces of the merchant account relationship. And our job becomes one of supporting that effort with a competitive product that compliments their portfolio.

We do this by making a product that is well targeted for a strong vertical, develop and support it 100% in-house and work toward integrating it with processors in ways that make the most sense for the market.

It's important to recognize this, because its a core component of our identity. That we position ourselves in line of support to the market in real time with the people who are on The Front Line.

MSP Priority: Speed of Set Up

When signing a new merchant, speed is one of many critical factors to getting your new merchant relationship off on the right foot.

Our shameless plug here is that with Carpe Charge, you can have a merchant up and running at the rate of speed that you it takes to get merchant account approval from the processor. As soon as you have an MID in your hands, its only minutes to get Carpe Charge installed and running on their PC.

Consider this when comparing to other products. We listen to ISO's and agents because this is where the rubber meets the road. Speed to set up is one of many priorities.

Sign up today at: www.carpecharge.com
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Feet of Clay

I just read an "article" featuring a dumb and happy VAR who "now sells card processing" to his clients. He became a referral partner to an ISO who specializes in leaching onto POS makers and VAR's. The article even went on to talk about how the VAR does not know anything about card processing and does not have to. And how he pretty much just refers clients, sits back and makes money.

I'm pretty sure I saw that same company advertising on my local telephone pole. Something about sitting at home all day making $30K a week.

Now, I'm not saying that this VAR-Replaces-Agent model is all bad....but here are a couple of things to make note of when headed this way:

a) As a VAR, when you lock yourself in with a single ISO/processor....you are no longer "processor neutral." If you have a client who is at all business savvy, then he is going to want to shop his rates and services for the best deal. The "best deal" of course is more than just the transaction rate, but the overall service that comes with it. Simply put: be sure you are willing to shack up with one ISO because it's going to be a limiter to your client base.

b) Now this second point is a bit more hypothetical, but its worth asking; assume you've just got in bed with a single ISO who promised you a rainbow and new pony. You spend a year or two pumping their Rolodex full of clients. Then that ISO gets sold or acquired (as they do every day) to some mother-ship who has their own POS solution in-house.

The answer to that scenario is; "hope you saved up your pennies while you were still in business."

And the lesson there is this: It happens.

If I were a VAR or POS re-seller, I'd sure like to keep my eggs in more than one basket. Its better for my clients and better for my own longevity.

This is why we are a "processor neutral" product. Our interest is in serving the merchant and the ISO with a highly flexible solution. The best ISO's don't stick with the same processor forever -after all, card services is a risk managment game. So it's in our best interest to be poised to move with them. At the same time, as merchants become educated and want to explore more merchant service options, then we need to be flexible to be there as well.

As a VAR, you should look for flexible solutions that are profitable and sustainable.

Pass the Buck

You gotta love the card payment industry if no for no other reason than it's an entire vehicle that has found a way to split a penny up to 50 different ways. Its like the 6-Degrees of Kevin Bacon except that everyone who plays gets a piece of Kevin's money just for signing up. Or, like going to church and when they pass the offering plate, everyone goes ahead and skims a quarter, plus .15 cents off the last guy - and another nickel for taking the effort to pass the plate down the line.

This is all fine and good I suppose. It's a large industries model and it works. But it's kind of funny to hear the shock and awe in peoples voice when they hear that we (Carpé Charge) don't get into the stream of collecting residuals. That our fee for the software is what it is and no more. That we really post a single-price and that's actually what we charge. And that the ISO, agent, reseller or otherwise keeps their residuals and their margins right where they planned to in the first place.

It's a sustainable model and it's a model that has an identity uncloaked by smoke or curtains.
Consider this next time you are installing another software payment terminal and then contact us: www.carpecharge.com