Payments – Loyalty – Targeted Promotion: What If They All Worked Together?

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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When Your Payments Platform Isn’t Good Enough

How and when do you decide to get rid of that trusted old car you’ve had for years, or those comfortable jeans that are now rather frayed and faded, or that old computer, the one with the 20 lb. CRT and at least one floppy disk drive? As much as you have grown to love certain products or services through the years, there comes a time when choosing to give them up in favor of functionality, reliability, trustworthiness and performance is the right thing to do.

Similarly, when your old payments platform is no longer effective—when it costs too much to maintain, has limited functionality, is not competitive, or is simply not doing its job anymore—it’s important to weigh your options and realize that it may be in your best interest to “switch up” to a payments platform that will do far more than was possible even a decade ago. After all, in the end, that comfy, broken-in [or perhaps broken down] payment system may be costing you way more than it’s worth.

The Cost of Just Good Enough?

Everyone has determining factors that help them decide whether a business product or service is “good enough” to continue using it. These factors may include:

  • Reliability
  • Inability to get parts or service
  • Lack of skilled personnel available for operation and support
  • Lack of compatibility with newer products
  • High maintenance costs
  • Limited functionality
  • Minimally competitive
  • Easier, more advanced, less costly alternatives

As technology has evolved, some payment systems have evolved as well to provide users with the functionality needed to run an organized, efficient, competitive business. However, many merchants and financial servicers hold on to the “If It Ain’t Broke Don’t Fix It” mentality, despite nearly countless financial and operational incentives to change. As a result, they are met with high maintenance costs, limited functionality and compatibility with other systems, and antiquated technology. Sadly, this forces some to ultimately succumb to the expense of changing to an incumbent-prescribed  payment system that may end up being little more than a patch on tired old technology.

Why Payment System Migration is Important

Chances are, many feel that the time and cost required to switch or upgrade payment platforms is too excessive and not necessary. Perhaps there are tight budgets to consider, or maybe the business cannot afford to dedicate the time and resources required for a changeover of a complex payment switch. The truth is that, while payment system changeovers can indeed be difficult, expensive and time-consuming, they need not be.

The bottom line is this: What are the costs of NOT having today’s payment system functionality, interoperability, competitive edge, value-added capabilities, etc.? Ultimately, when coupled with the determining factors listed above, the cost to keep “just good enough” far exceeds the cost to have the latest and the best. It makes financial and operational sense for your business to consider change now.

Are you ready to make that change? Why not talk to the certified payments consultants at On-Line Strategies? OLS offers proven alternatives that combine the latest payment technologies and capabilities, with industry-leading value-add functions like eCouponing, market basket analysis, loyalty, ACH and more—on a single, highly capable platform—at far less cost. Call OLS at (972) 905-4447 for consultation, and be sure to visit our website at OLSDallas.com. You can also keep up with the latest news and trends in the payment processing industry by connecting with us via our growing social communities.

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Electronic Payments Industry Gathers for Annual Expo

On-Line Strategies as well as other leaders from the electronic payments industry will be gathering at the Mandalay Bay Resort and Casino in Las Vegas, NV on April 17-19 for the 2012 ETA Annual Meeting and Expo. Over 3,500 payment professionals and suppliers will be on hand for three days of networking, education and interaction to discuss innovations and trends in today’s electronic payments industry. With sponsors like Discover Card, Visa and American Express in attendance, among many others, the 2012 ETA Annual Meeting and Expo is an opportunity for the movers and shakers of the payment processing industry to network, and learn about and discuss current and future trends in the field of electronic payments.

electronic payments industry

Highlights

  • Guy Kawasaki, celebrated author, former chief evangelist for Apple and co-founder of AllTop.com, will be on hand to give the opening keynote speech entitled The Art of Enchantment. Kawasaki will discuss the power of enchantment and how you can utilize enchantment to move, influence and inspire others. Kawasaki is currently a columnist for American Express’ Open Forum.
  • Charles E. Cook Jr., highly respected political analyst for NBC News and National Journal, and publisher and editor of the Cook Political Report, will share his 2012 Political Analysis with conference attendees. Cook is one of the most prominent experts in U.S. politics today.
  • The 2012 Annual Expo will feature over 2,500 payment processing professionals from over 150 industry vendors. This year’s exhibit hall will feature on-site events such as educational sessions, receptions, luncheons and other activities to stimulate conversation, as well as encourage and facilitate networking and interaction.

Schedule

  • April 17 — Opening reception at 5:30 p.m. followed by the President’s Dinner.
  • April 18 — A day full of networking, information and education. The opening Keynote speech by Guy Kawasaki will be followed by the 2012 Political Analysis by Charles E. Cook Jr. Then, the exhibition hall opens and the 2012 Technology Showcase gets under way, featuring 6 educational sessions about various payment processing topics.
  • April 19 — The last day features more exhibition hall presentations and four more education sessions, as well as a closing luncheon.

For more information about the 2012 ETA Annual Meeting & Expo, visit www.electran.org. On-Line Strategies will be tweeting from the expo. Join the conversation at twitter.com/OLSdallas.

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Payment Card Issuers

payment card issuersIn an article entitled, “Card Issuers Lightening Up”, Tom Goldsmith of the Electronics Transactions Association shares how the number of card originations made by payment card issuers actually increased by over 14% in 2011 compared to the previous year (according to the credit monitoring firm Transunion). In addition, a larger percentage of cards were issued to “non-prime consumers” (those with a VantageScore® lower than 700) last year than in 2010. This is compelling evidence that the payment card industry is slowly loosening credit restrictions. Pair this factor with how national credit card delinquencies were down nearly 5% last year, and the outlook for 2012 is surprisingly optimistic.

What’s behind these trends? Payment card industry analysts believe many of the riskier loans and credit lines have worked their way through the system, and payment card issuers (as well as payment card consumers) are cautiously applying more responsible risk management strategies. With the delinquency rate at its lowest level since 1995, lenders are focusing more on originating cards in the non-prime market (as a result of a renewed competitive push). This is good news for merchants and retailers. Since customers are granted more purchasing power, consumers will be more apt to increase spending.

So the question becomes, “Are you technologically ready for the next credit card renaissance?” Now is the time to prepare for the new alternative payments trends. It’s the right moment to empower your customer base by adding innovative payment options, electronic couponing, targeted promotions and more creative customer loyalty programs. As the saying goes, “If you build it, they will come.” Perhaps even more appropriately, “If you support it, they will reward you with their continued patronage and greater wallet share.”

For more insights about alternative payments, call OLS today at (972) 905-4447 for a free consultation with one of our certified payment consultants. Be sure to visit our website at www.OLSDallas.com; keep up with the latest news within the payment processing industry by connecting via our growing social communities on Twitter, LinkedIn, and YouTube.

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In-store PayPal Service Competes Against Card Issuers

In its article “PayPal Says its In-Store Payments Service is Safe,” Fox Business highlights the growing competitive tension between alternative payments king PayPal and traditional credit card companies. Visa fired a shot across the bow by claiming that they had real security concerns with PayPal transactions. Such a statement is believed by some to be proof that Visa is getting nervous about the inroads being made by PayPal and others in their attempts to satisfy merchants and consumers who are frustrated with the traditional players in the payments transactions arena.

paypal-visa

 

Case in point: In January PayPal began testing a service with Home Depot stores that enables customers to make purchases with their PayPal accounts by typing in their mobile phone number and PIN instead of swiping a card or handing over cash. A customer using the service receives an electronic receipt on their mobile device after making a purchase.

Visa contends that, if someone watched a customer entering their mobile phone number and PIN to conduct a transaction, then that someone could easily gain access to the customer’s PayPal account.  Visa also questions PayPal’s ability to process the number of transactions it would be asked to handle each day. PayPal is downplaying such criticism, and counters with the argument that if a fraudulent purchase was made, the customer would almost immediately be alerted because of the electronic notification.

Though it is believed that PayPal will be unable to gain “significant payments volume” in the next couple of years, PayPal could be used by retailers as leverage against Visa and MasterCard in an attempt to lessen “interchange rates,” the fees that merchants pay to accept the cards of the traditional networks.

In response to PayPal and other companies in the alternative payments industry, Visa and others are developing their own mobile- and online-payment services. With the cooperation of a “few brand-name merchants,” Visa will be testing V.me, a service that would enable customers to pay for purchases on mobile devices and traditional websites by entering a username and password instead of typing in their card number for every transaction. Eventually, V.me could be used to introduce more people to NFC by allowing them to complete their transaction by simply tapping their smartphone against a contactless terminal.

Whether it’s PayPal, V.me, or other alternative payment methods, you can trust On-Line Strategies to guide you through the maze of emerging payment technologies.  For more insights about alternative payments and the proven transaction processing platforms that support them, 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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Grocery Coupons Still Dominate According to Couponing Study

grocery couponsAmerica is extremely coupon crazy, especially with grocery coupons. According to Coupons.org, coupon redemption in the United States increased 63% last year and Americans saved $3.7 billion as a result. With more Americans than ever before using coupons, merchants and retailers are taking note. However, at the same time, COOs, CTOs and CIOs are asking themselves: “Can our transaction platform and payment switch handle all that’s required for electronic coupon acceptance, redemption and settlement?”

Not Your Grandmother’s Coupons

About 89% of all redeemed coupons are still clipped from newspapers, but that’s changing quickly. In 2011, 20% of smartphone users took advantage of mobile coupons, a 117% increase over 2010. Coupons.org predicts that retailers will see a 1300% increase in electronic couponing as the number of regular online couponers grows to 35 million in 2014.

Couponers are Demographically Changing

The demographics of coupon users are mirroring smartphone users. Couponers are becoming “younger, more affluent and tech-savvy.” Remarkably, over half of 13- to 17-year-olds use coupons and coupon codes, and households with incomes over $100,000 are twice as likely to print digital coupons as those in homes earning less than $35,000. Plus, college graduates are twice as likely to use coupons as those who did not finish high school.

The Heart of the Country is the Heart of Couponing

In that same report, Coupons.org recently released its “Most Frugal U.S. Cities” report, ranking the top 10 couponing cities in America. The top cities for couponing are:

  1. Atlanta
  2. Tampa. Fla.
  3. St. Louis
  4. Cincinnati
  5. Raleigh, N.C.
  6. Cleveland
  7. Minneapolis
  8. Oklahoma City
  9. Kansas City, Mo.
  10. Nashville, Tenn.

The top 10 electronic couponing cities are:

  1. Atlanta
  2. St. Louis
  3. Tampa, Fla.
  4. Oklahoma City
  5. Cincinnati
  6. Dallas
  7. Miami
  8. Raleigh, N.C.
  9. Kansas City, Mo.
  10. Pittsburgh

Though the South is well represented, it’s interesting to note that the Midwest ranks as the country’s hottest couponing region.

As these trends in electronic grocery couponing continue to intensify, the certified payments professionals at On-Line Strategies firmly believe that the visionary companies who align their payments processing engines and payment switches accordingly will enjoy a significant competitive advantage over other retailers. For more insights about electronic couponing, 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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Are PINs Necessary as US Expands Options for Payment Methods?

payment methodsIn his article titled “Grocers Want Chip and PIN, Even If Visa Says PINs Not Necessary,” Tom Goldsmith of the Electronics Transactions Association reported that supermarkets are still skittish about not requiring PINs even though emerging payment methods make them obsolete. Despite merchants and retailers wanting to embrace new choices for alternative payments, questions remain.

Visa is pushing for the United States to adopt EMV cards and POS equipment that has been widely used in Europe for several years. Such a move would help pave the way for near-field communication-enabled mobile payment devices (“NFCs”) to appear more prominently for American consumers. Visa contends that, in the US, online processing of transactions would be transmitted to the issuer in real time, thus, the need for offline authentication processes, such as the use of PINs, need not exist.

However, food retailers consistently argue that the PIN number is crucial to validating a customer’s identity in the checkout lane. In an industry where profit margins are characteristically low due to intense competition, grocery advocate groups, such as the Food Marketing Institute, are voicing concerns about the possible fraudulent activities that might infiltrate emerging payment methods.

One thing is certain, however. Seeking out a payments systems company that has a thorough understanding of the complex world of payment methods and related trends, security issues and cutting-edge technologies is a must. On-Line Strategies has its fingers on the pulse of the industry, and can provide your company with the knowledge and guidance it needs to stay ahead of the curve, and avoid costly mis-steps. Its transaction engine and payments system platform is proven today and provides the sound foundation for tomorrow. For more insights about alternative payments, 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 on Twitter, LinkedIn, and YouTube.

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We’re What You Don’t See

You may recall BASF’s advertising tagline: “We don’t make a lot of the products you buy.  We make a lot of the products you buy better.™” What better way to tell the story of On-Line Strategies than with those simple, captivating words. We’re what you don’t see! We help make merchants better by providing transaction engines and payment switches that handle the latest technological advances in alternative payments and related value-added capabilities.

alternative payments

You may have read some OLS blogs recently claiming that many exciting new ideas and technologies in electronic payments won’t work. Provocative statements, yes, but the basis behind these claims is that, without the payment switch—the part you don’t see–many of these hot, new, emerging technologies simply can’t work, or at least won’t work the way you might envision.

At OLS, that’s what we do. We live “under the hood” of your “race car” each and every day, enabling what you don’t see. We design the software and services that help make an electronic payments platform work, and augment that platform with support for things like EMV, vault and tokenization, customer loyalty programs, buying behavior analysis, and targeted electronic coupons.

To take a peek under the hood, and get a sense of the millions of transaction complexities we process every day for retailers and payment services providers, we’ve created an online demonstration for you here: “No One Puts It All Together Like OLS.”  We think you’ll dramatically see that OLS delivers the proven payment switch that makes today’s alternative payments and value-added transactions work – better.

For more information on how your company can safely embrace the new trends in alternative payments, and capitalize on the latest accompanying capabilities, 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, please keep pace with the latest news and trends within the payment processing industry by connecting with us via our growing social communities.

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The Importance of a Firm Foundation

payment switch foundationAfter 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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If It Ain’t Broke…

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.

payment switchFor 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.

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