The relationship with a payments processor is one of the most important partnerships a payment facilitator can have. As the entryway into the payments system, these companies provide technology and expertise that can help put the PF on the road to success.
In a panel discussion at PF WORLD 2019 in April, a group of processor representatives talked with attendees about how deciding the payments model you will go to market with goes hand in hand with the crucial tasks of selecting a processor and defining the relationship with them.
According to Tom Tucker, VP of eCommerce, PFAC, and international for First Data, none of these are decisions to be taken lightly.
“The first thing anybody new to the industry needs to do is really look at the model and what you’re getting into,” Tucker said. He told the audience that many of the approaches software companies can take to payments, which run the gamut from referral partners to marketplaces to payment facilitators, are a ”heavy lift” that require solid relationships with other businesses that are well versed in the payments system.
“Selection is about trust. It’s about the expertise that they can provide to you, and the people behind the people that you see. The salesman is the front guy, but who’s the team of people you’re going to be working with behind the scenes?” he asked.
Todd Stone, strategic sales executive for Worldpay, said that his first question for companies that are considering the payment facilitator model is “why?”
Many companies want to exercise control over the merchant relationships and over the experience – how well payments work with the software or how easy it is to sign up for the service, for example – and these are good reasons to become a PF, he said. And while economic considerations may be a factor as well, he said, it’s often best if they’re not the most important.
“When economic decisions are number one, that’s a very challenging conversation,” he said. The decision to become a PF ultimately does have to be economically viable and provide a return on investment, he said. “But if that’s where we start, generally that’s where I see folks not necessarily wanting to go down that road. Or eventually it just falls down because you can’t get enough economic value and that’s all the drivers are.”
The panelists also talked about the need payment facilitators have for flexibility and a customized approach, as their needs may evolve over time.
“We very much take a walk v. run approach. Do you want to walk before you run, or do you want to run? Because we can support both aspects of it, based off of the clients’ needs,” said Heidi Ablowitz, business development executive for ProPay. Clients may even ask for short-term help with specific pieces of the payments acceptance process, such as underwriting or risk management. “We will grow with them,” she said.
Wil Cothran agreed that there is not a one-size-fits-all solution, particularly because many companies have already built some components on their own and are coming to the processor for help with what they’re missing. Cothran is SVP of integrated payments and payment facilitator business development for Bank of America Merchant Services.
“There is rarely a case where I would suggest go to one place and buy lock, stock and barrel whatever that offering is. There’s a lot more flexibility you can have by having different pieces,” he said.