Integrated Payments

- The why, what and how -

Think your business can’t

afford credit cards?

Think again.

It wasn’t so long ago that taking credit card payments was a luxury many

businesses just couldn’t afford.

It was a long, invasive, and costly undertaking.

If approved, you had to pay a percentage of the sale, plus a host of other fixed rate fees tacked on top of that.

Then there was the wait time to actually receive the funds from the bank.

The SME Catch-22

Taking on the cost of accepting cards bring in a

different set of customers.

In saying that, sales prices to all consumers would

have to increase to offset the burden, which might lead to them taking their business elsewhere.

Damned if you do, damned if you don’t.

Pablo & Rusty’s #poweredbykounta

These days, the landscape has

changed.

Technology has solved many of these problems,

lowering costs enough to make credit payments

within reach of small businesses.

And just in time, too: credit and debit cards have

been the preferred payment type of consumers for

more than a decade.

And now, we’ve got newer “alternative” payment

types picking up steam.

This standardisation of electronic payments and

lowering costs has created a perfect storm of

opportunity for small and medium sized merchants,

especially in the retail and hospitality spaces.

The use of mobile and other alternative payment methods has

been on the rise in Australia1.

Meanwhile, in the United States, McKinsey and Company

predicted back 2014 that electronic payments of all kinds would rise in volume by 7.3%, year over year, over a five year period—and that prediction is coming true.

This is contributing to greater competition among payment

providers, who are scrambling to provide more value added

services for their decreasing per-transaction fees.

1http://www.rba.gov.au/publications/rdp/2014/pdf/rdp2014-05.pdf

By 2013, for transactions over $20, Australians used some form of electronic payment more than 60% of the time.

60%

At the same time, the use of mobile and other alternative payment methods has been

on the rise in Australia1.

used at least once used most often

What have mobile payments replaced?(% of respondents who have used a mobile payment)

Credit or debit card

over the internet

Internet pay - any one

on the computer

BPAY using

computer

Cash

Credit or debit card at

point of sale

Direct debit

Cheques

Other

0 10 20 30 40 50 60 70

1http://www.rba.gov.au/publications/rdp/2014/pdf/rdp2014-05.pdf

Because of this, integrated electronic

payments at the POS has emerged as a

key differentiator.

There are two kinds of POS out there:

• Thosethathelpyoucountyourprofits

These lock you into a single payment

provider, or don’t provide any integration

at all.

• Thosethathelpyougrowyourprofits

These are developed to provide you with

freedom of choice — giving you access

to as many tools as possible to succeed

and grow.

Integrating a variety of payment options

into your POS is one piece of the puzzle,

one that fits neatly with several other pieces.

7.3 % p.a.

Large merchants

Middle sized merchants

Small merchants

Electronic Payment Volume

#1: Speedier TransactionsBack in the early days of credit cards, all transactions could be

mobile. This wasn’t a good thing, though.

Long before computers, merchants used a mechanical contraption

to take imprints of the card’s face on a form.

They’d then fill out some fields—an item description, the price, tax, and total—then mail the whole thing into their bank, hoping the

whole transaction was approved. Then they’d wait for their money.

For a customer, the process was pretty painless, and relatively

quick.

For merchants? Not so much.

Sample #poweredbykounta

Spend in Mobile Payments (billions)

Fast forward to today.

Today, when everything and

everyone is connected waiting is no

longer an option.

Sure, you could label such talk as a

first world problem.

But then you would have to

convince every customer in your

store to see it your way.

Spoiler alert: they won’t.

20130

5

10

15

20

25

35

2014 2015 2016

It is a big deal, and not just for speed.

While waiting an extra 30 seconds might not seem like much

to the person paying, ask the individual 10 people deep in the

queue whether it matters.

At a clothing store, or supermarket, there could be dozens of

items that need scanning in. All of which takes time, increasing

the crankiness of a customer by the time he gets to the register.

If anything goes wrong once he gets there, you can expect that it

won’t be long before you’re getting bad reviews.

Ozharvest’s Think. Eat. Save #poweredbykounta

Payment processors have

been working hard to upgrade

the payment experience.

The EMV standard may have been created to increase security,

but measures were taken to speed things up, too.

Chip-and-PIN payments are more than

incrementally faster than waiting on a signature.

Tap-and-Go payments give a customer a chance to

put the card back in her wallet or

vbag while the process completes.

Mobile payments just require you to wave your

phone over the terminal.

If you’re going to grow you’ve got to be able to

replicate a good experience over and over again.

All these increases in speed increase the number of

customers you can serve and customer satisfaction.

Which is good for business, because happy

customers recommend your store.

Word of mouth advertising like that can be the most

powerful there is.

Uncle Mings #poweredbykounta

This piece goes into detail about merchants’ early successes with Square.

It’s important to understand that POS has evolved far beyond a basic platform for taking payments

other than cash.

In recent years, Square has struggled to compete in the POS space. They now integrate with other

POS systems to compensate for features the Square Point of Sale lacks.

Meanwhile, the best POS options don’t need Square to provide integrated payments, instead

focusing on a solution that enables customers to choose the payment platform that works best for

them.

The evolution of point of sale technology

Past Future

If you’re like most merchants running a modern-day POS,

it’s important to you that it integrates with your accounting

software—and of course it is.

Having your daily sales automatically assume their position inside

your accounting software saves time and prevents the hassles

caused by manual data entry.

#2: Integrated Payments Means Integrated Reporting and Bookkeeping

Are You Holding Your

Business Back?If you’re still running a third party card terminal to handle

credit and debit transactions, you’re holding yourself back.

The same goes if you’re taking mobile payments of any kind;

any time you add a payment type that’s recorded outside

your Point of Sale, you’re adding another statement that has

to be gone over line by line.

Beast and Bread #poweredbykounta

On the Flip Side.

Having all this information available in one container streamlines

the process of managing your books. And with a small business,

when you’re likely to be contracting your accounting out to a

consultant and her hourly rates, the time saved is money saved.

This Takes Time. And Time is Money.

Your credit card deposit statements need to be reconciled with

your POS and accounting software, which need to be reconciled

with your bank statements.

Keeping track of these multiple revenue sources and subtracting

the various fees can quickly become a bookkeeping nightmare.

There’s the overall boost in business intelligence that you get from the

kind of comprehensive reporting available to you when you have ALL the

relevant data.

A point of sale system that’s been designed to help you grow your

business—not just maintain it—will feature a variety of different report templates.

There’s more to it than easy record-keeping.

Get a Bird’s Eye View

on Your Business.

You can run these reports against the data

the POS collects over the course of a day.

If you’re finding that your margins are too thin, you can drill down into the details to

fully understand the big picture of your

business.

For example, running a report that shows

you a breakdown of payment type for all

transactions lets you know exactly how

many of your customers are paying in

ways other than cash. Deus Bar and Kitchen #poweredbykounta

By better understanding the impact of your payment processing

fees with your particular customer base, you can adjust your prices

accordingly.

This post by Colin Shaw, customer experience thought leader

demonstrates that price increases have much less impact on

customer loyalty than common sense would dictate.

Shaw cites a statistic from Bain & Company that shows a customer is 4 times more likely to walk because she had a bad experience than for price - or product-related issues.

Experience > Price

Bad experience

Price / Product issues

Rule #1: The Customer Is Your First Priority

Our first reason for integrating payments—speedier transactions—is one way to keep your customers happy.

But there are other things you can do:

Implement a loyalty rewards program, and offer incentives for using the payment type that works best for you.

Offer gift cards, sold at a modest discount, to members of your rewards program.

The average person who uses a gift card ends up spending 20% more than the value of the card. By offering, a 5% discount on the value of the card, you’ll make up the difference and more than cover your costs.

This gives you an idea of how easy access to all your relevant data can

empower your decisions.

A key finding by Mckinsey is that $1.5 billion in paymentprocessingrevenueoverthenextfiveyearsthat will happen directly in a point of sale system.

POS developers have been named “increasingly

relevant partners for the distribution of payments

processing.”

The move to cloud makes it easier to integrate with not

just credit and debit payments, but with alternative/

mobile payment processors.

#3: More Than One Payment to Rule Them All

Legacy POS - A Walled Garden

Legacy POS companies like NCR, having seen the value

in integrating payments into their software, continue on

in short-sighted ways. They simply acquire a processor

and build it into a new cloud-based offering.

This ownership of the payments portion of the POS still

makes for a closed system.

It also demonstrates the priorities of these aging POS

companies: to increase their bottom line at the expense

of their customers’ choice.

Remember Rule #1?Yes, your customers are are your

top priority. The new players in POS

understand, providing merchants with the

tools to accept many forms of payments

and opening them up to a wider array of

customers.

Besides, by leaving the processing to the

companies who’ve made it their business

to do that, these POS providers are free

to focus only on the development of the

software itself.

POS companies that opt out of the

payment game are free to integrate with

many more solutions to build a better

system.

Deus Bar and Kitchen #poweredbykounta

Mobile Payments Improve

Customer and Merchant

Experience.

Because of their security

and ease of use, mobile

payments are maturing

and growing into a

standard.

At their most basic, using

these payment apps

improve the customer

experience.

In saying that, they also

improve the merchant

experience.

This is especially the case

with mobile ordering,

where the apps try to build

a level of personalisation

into the experience that

isn’t possible with a credit

card.

Mobile payments allow merchants to get to know their customers’ names and faces,

fostering loyalty based simply on the experience.

When you’re greeted by name as you walk into a place, it feels like you belong.

As Shaw noted in his post, McKinsey has found that 70% of buying experiences are based on how customers feel they’re being treated.

Who wouldn’t want to keep showing up at a shop or restaurant where they feel

welcome every time?

How they feel they’re being treated

Customer Experience

Interact with your customers better.

Get a Bigger Slice of The Pie.

Mobile payment and online ordering apps can also make use of a

smartphone’s location services, attracting new customers without the

merchant having to do much beyond sign on with the service.

A Boppl user in the mood for a pizza, for example, can check the app

to see what’s nearby. If you are signed up to the app it’s pretty likely

you’ll convert that person to customer.

That kind of experience can pull in additional foot traffic daily.

Pie Fidelity #poweredbykounta

The increased competition in the payments arena means that, for

the the first time, processors are having to wrap more services into their offering AND lower their fees to attract merchants. This goes a long way to allay some of the concerns that smaller

businesses have around accepting electronic payments.

#4: Payment Processors are working harder for your money

No Money, Mo’ Problems.

The biggest headache for merchants when

taking electronic payments is cash flow.

It’s great when you can serve a bigger

portion of customers but, you’ve got to

spend money to make money.

But that money you make? You don’t get

it right away. It may just be matter of a few

business days but, for a small business,

that can feel like a lifetime.

If you’ve spent all your reserves (or maxed

out your own credit cards) just to be able

to handle an anticipated rush around a

holiday, and that holiday falls on or near

a weekend, a few business days can turn

into a week.

What are you to do while you wait for

settlement and you’re running low on

supplies?

Tyro Payments Smart Growth Funding.

It’s a simple idea that makes cash available to merchants for

growing their businesses.

Established merchants using Tyro to accept payments receive

offers of unsecured, fixed fee loans based on their transaction history.

Offers are sent automatically to the business owner’s smartphone, with the amount, fee, and repayment terms all

spelled out.

Learn more

For many businesses, this sort of lifeline is the difference between barely scraping by and breathing easy.

For others, it’s an easy way to invest back into the business, whether that means a retail

shop increasing its inventory, a restaurant upgrading its kitchen, or that new marketing

push you’ve been waiting to launch.

Breathe easy and run a better business.

Commonwealth Bank Can Help with All-in-One POS Hardware

Last year, Commbank introduced its all-in-one tablet payment

device called “Albert.” Powered by the Android OS, Albert is a

tablet purpose-built for retail and hospitality businesses.

It runs a variety of apps—including POS, analytics engines, CRM,

and marketing/ social tools—and features an integrated EMV

card reader.

This gives business owners the ability to run their entire business

on one easy-to-use piece of hardware.

What Albert doesn’t do is force users into any Commbank-

mandated ecosystem. On the surface, it sounds like the

reverse of the scenario where a POS developer acquires

a payment company to maintain a stranglehold on its

customers.

But Commbank didn’t go this way.

There are some free tools developed by the Commbank/

Albert team, but mostly they’ve left the app development to

other companies who want to work with the device.

POS is handled by Kounta, Time and Attendance by Tanda,

analytics by Local Measure.

One device for your entire business.

The idea is to provide merchants with the

tools and the choice to run their business as

they see fit; Commbank understands that if they make it easier for their customers to do

business, they’re likely to do more business.

Processing fees are what the bank is after,

and it serves them to have customers that

can spend more time trying to increase

revenue when they don’t have to manage

multiple moving parts.

Learn more

So what’s the catch?

Operating a modern-day small

business has undergone a huge

shift.

Imagine telling small business owners from even 20 years

ago about the kinds of tools they’ll have access to in the

future.

Instead of customers grumbling in the queue while a clerk

swipes and types into a clunky Verifone card reader, then

waiting for the dial-up authorisation, people can wave credit

cards like a magic wand and pay in a matter of seconds.

Forget late nights going over ledgers and daily receipts line by

line, matching them up and then reconciling everything with the

bank. Instead, rejoice at today’s automation of the same tasks.

Knowing that data is always in your reach for analysis and deep

business intelligence will have you dreaming up ways that you

could put that information to good use.

All while being freed up to do what you do best and share your passion with the world.

No more late night ledgers.

Configure your existing hardware to get the benefits of integrated payments.

What are you waiting for ?

Start Fresh Use What You’ve Got