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As technologies evolve and consumers become more sophisticated and demanding, visionary companies are stepping up their game, adopting more comprehensive and capable payment platforms that provide greater functionality at a much lower TCO. As value-added capabilities like loyalty and reward programs tied to individual shopper preferences, buying data and triggered eCoupons become more generally adopted in business, customer satisfaction and loyalty dramatically improve, and the cost of providing such cutting-edge services drops substantially.

While this phenomenon is occurring not just in retail, but in virtually every industry and market, nowhere is that evolution more evident than in the retail payments industry. At a time when more all-inclusive payment platforms are being adopted, integration among older and sometimes disparate systems throughout the industry is necessary in order to increase functionality, reduce costs and create a better overall experience for users, merchants and consumers alike.

Current Challenges in Payments Switch Integration

Today’s technological evolution has been gradual but increasingly evident over the years. Smart phones put the capabilities of a computer, calculator, phone and even payment device, all into one portable package. Even buying gas has become an integrated activity, with the pump serving as a payment initiation mechanism, communications device, and a source of fuel. It really should come as no surprise that today’s payment systems in industries such as retail, financial services and healthcare have also experienced an evolution in payment varieties and related value-added capabilities.

At first there was only credit and debit authorization. Then along came stored-value cards and often a separate application for that to try and tie in to the main payments switch or point of sale (POS) system. Making their way soon after were standalone card swipe devices that are now largely an integrated element of many POS systems. Out of that emerged loyalty programs and buying software linked to the POS and payment systems. Next came advanced couponing—e-couponing or otherwise—which experienced the same scenario: the early adopters bought a separate system or service provider for that, too. After that, a separate database to capture buying behavior at the POS or for the enterprise as a whole. Then the purchase of analytical tools and software to make some sense of the data collected. The evolution goes on and on.

The challenge, however, lies in the fact that many of today’s retailers and financial services providers still maintain several systems, perhaps integrated to some degree, but with minimal interaction or integration. Severe limitations result, costs escalate, multiple points of failure ensue and direct labor to try and keep it all together skyrockets. An all-encompassing system would provide a higher level of performance with greater functionality at a much lower cost, not to mention being far more flexible and consumer friendly.

Working Together?

What if it all worked together—card payments, virtual payments, gift and stored-value cards, check acceptance, mobile payments, loyalty programs, targeted customer promotions, e-couponing, market-basket analysis with consumer-triggered promotions and rewards, etc. No doubt it would reduce costs and significantly improve customer satisfaction and ongoing loyalty. After all, the older technologies can’t keep up—at least not in a cost-efficient manner. The separate systems simply cost too much to run and maintain.

What the industry needs is one payments platform, one payments switch that does it all, based on cutting-edge technologies. On-Line Strategies has just such a system. And it’s proven in numerous organizations large and small. For more insights about payment processing platforms, call OLS at (972) 905-4447 for a free consultation. Be sure to visit our website at OLSDallas.com, and keep up with the latest news and trends within the payment processing industry by connecting with us via our growing social communities.

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After 12 years and $25 million, the “Leaning Tower of Pisa” was finally reopened to the public. During the renovation project designed to stabilize the tower, 110 tons of dirt was removed which reduced the famous lean by about 16 inches. The problem was not that it had a bad original design, nor was there inferior workmanship or marble. The problem emanated underneath with the structure’s foundation. Thankfully, when it comes to upgrading or replacing your company’s payment switch, the project won’t take anywhere near as long (or be nearly as expensive!). However, failing to take advantage of the latest alternative payments capabilities within your transaction platform can lead to slow, steady erosion of customer conveniences and resultant revenue.

You wouldn’t buy a powerful sports car if it could only be fitted with wheels from a covered wagon. You wouldn’t purchase a new home, even in a prime location, if the foundation wasn’t trustworthy. So why would you invest in alternative payment technology, a new loyalty program, or perhaps an exciting new electronic couponing engine without the right foundation?  Without a proven transaction engine or payment switch running in the background, these exciting new capabilities may never be enjoyed by your customers.

It takes an infrastructure to “raise” customer loyalty and “spend.” The proper transaction processing platform can open a gateway to greatly improved revenue by giving today’s generation of consumer the functionality to initiate purchases through a variety of methods, while enjoying the convenience and added value of customer-centric rewards.

For more information on how your company can capitalize on the many accompanying value-added capabilities of a solid transaction foundation, be sure to visit On-Line Strategies at OLSdallas.com. We invite you to speak with one of our Certified Payments Professionals at (972) 905-4447 for a free consultation regarding your payment switch. Also, you can keep up with the latest news and trends within the payment processing industry by connecting with us via our growing social communities.

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Conventional wisdom suggests, “If it ain’t broke, don’t fix it.” While that may apply to static products and environments, it is likely short-sighted advice for companies involved within dynamic markets such as the payment service industry, which is progressively transforming as a result of emerging trends and technologies. Just like the frog that refuses to jump out of a slowly boiled pot of water, many merchants and retailers will stay put with their obsolete payment switch, not even considering the business being lost due to missed opportunities.

For example, scores of traditional merchants often decide to simply fix or patch their payments software, and many have been following this practice for years. However, now that the alternative payments landscape has morphed to include radically complex consumer transactions, older payment switches from the previous decade may not be broke, but they can put your company at a serious competitive disadvantage.

Opportunity Cost

In economic terms, an opportunity cost is the financial expenditure that can be calculated due to forgone opportunities tied to the choice of one type of expenditure over another.

Opportunity Cost = Cost of Selected Alternative – Cost of Best Alternative

In this case, the cost to be considered is whether to continue putting a bandage on the problem with more software patches, or invest in an upgraded payment transaction platform capable of performing the services that today’s customers demand.

The Cost of Inactivity

Of course, there is also a cost for doing nothing (just ask those in the audio/video industry for example, or fueling stations that didn’t adopt pay-at-the-pump!). A company with a wait and see attitude may wake up in a few months and have a “Rip Van Winkle” moment. Their payment switch certainly will still recognize, switch out/in, authorize and settle debit, credit and other mainstream transactions. However, they may soon learn that inaction has caused their technology savvy customers to go elsewhere. Meanwhile, their competitors (and their customers) are happily enjoying the benefits of a next generation payment systems platform that incorporates alternative payments and new technologies like EMV, targeted electronic couponing, sophisticated loyalty programs and more.

The Time is Now

Just as there came a day when you decided to trade in your Atari 2600, VCR, Walkman, and floppy disks, the time has come to upgrade your company’s payment switch. The state of a company’s technology, in essence, is a microcosm of the vision of that company’s leadership, and communicates to suppliers, customers, and employees whether or not it intends to be a viable entity in the future.

For insights on how to ensure that your payment switch is capable of handling the latest trends and technologies, call OLS at (972) 905-4447 for a free consultation. Be sure to visit our website at www.OLSDallas.com, and keep up with the latest news within the payment processing industry, by connecting with us via our growing social communities.