When the Internet, and then mobile and cloud-based technology, began to radically change the acquiring business, some independent sales organizations thought they could adapt by becoming software companies without changing the way they do business.

Rick-Oglesby

They were wrong, and that mistake is costing them dearly, argues Rick Oglesby, senior research analyst at Double Diamond Payments Research, Centennial, Colo. “Your average ISO is a distribution specialist selling a universal solution.” he tells Digital Transactions News. “The software industry isn’t like that. It’s very different from traditional payment-industry approaches to selling.”

The result of this mismatch is inevitable. “These guys haven’t figured out how to make money” on mobile solutions, Oglesby says.

So should ISOs become ISVs? Independent software vendors have shot to prominence as mobile and cloud point-of-sale technology has brought sophisticated business-management and marketing functions, once affordable only at big chains, within reach of small merchants, the ISOs’ bread-and-butter clients. Oglesby’s answer, laid out in 35 pages of closely reasoned text in a report released Thursday, is a carefully qualified “maybe.”

Digital Transactions, July 9, 2015
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