New ISO Cooperative Strategy Means More Profits for Tech Companies

Apr 09, 2015

There is a shift occurring in the way technological products are introduced to the market, and how they interact with retailers. Independent sales organizations (ISOs) have previously been threatened by entities like Groupon and Square, which sell directly to retailers. Now some technology companies are embracing this more direct strategy to sidestep large retailers and make a beeline to smaller merchants, who allow more creative freedom. But will this method work in the long term for the ISOs and merchants – some companies are betting on it.

Verifone, a San Jose-based terminal maker, is relying heavily on ISOs extending offers to smaller merchants. Their payment-as-a-service offering, Verifone Point, is being sold to small businesses exclusively through acquirers and ISOs. The same bundle is also being ushered out to its 1000 retailers.

Verifone executives believe their new strategy will move their products faster and increase profits. The company has decided to follow the recent trend of appearing first at smaller merchants with smaller IT budgets, but less restrictions. Since mobile technology has gotten cheaper to mass produce, it has become much more economically feasible for companies like Verifone to offer some of their services to small businesses that were previously excluded. So for example, small furniture and home improvement stores now have access to sophisticated bundles of hardware, software, gateway and support services.

But terminal makers are not the only ones taking a look at their product distribution chains. Near Field Communication (NFC), biometrics, EMV and virtual currencies like Bitcoin, are bypassing big retailers and making small businesses their first stop. The fact that EMV is following this trend is exciting news for Verifone, as it supplies hardware for EMV-chip cards. The company believes it will experience quicker penetration, wider distribution, and higher profits if they are able to properly leverage their 3,000 ISOs using the newer model.

Today high risk companies must use whatever advantages or strategies they can to get ahead. This newest agreement with ISOs could mean quicker penetration and wider distribution outlets. This could be especially advantageous to small high risk businesses like furniture and home improvement businesses. eMerchantBroker.com is a low hassle, low cost payment processor that will build and manage your tech support merchant account with expertise and skill.

 

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