Build Vs. Buy: The MPOS Conundrum

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8:12 PM EST June 19th, 2013

To build an MPOS solution, or to buy one: that is the question.

As retailers and merchants look to build out their unique mobile point of sale platforms, they’re faced with no shortage of difficult questions. How can they produce a solution specific enough to fit their needs, but versatile enough to encourage broader acceptance? Which part of their MPOS solutions should retailers look to build themselves, and what other aspects should they look to buy and outsource?

There is no universal answer for retailers and merchants in different verticals. But as Eric Hoffman, senior vice president of U.S. sales at ROAM, points out, a marriage of the “build” and “buy” strategies often yields the best results.

MPD CEO Karen Webster spoke with Hoffman about ROAM’s strategy, and about how retailers can decide on what they should build and invest in themselves vs. what they should outsource to experts and specialists.

“We get asked that each and every day, and our go-to-market strategy … is to look at the existing assets that you have as a company, what you do well as a core competency, and what you can quickly leverage into a mobile point of sale strategy,” Hoffman said. “So we like to think not about a ‘build or buy’ strategy, but about ‘build and buy.’”

From a retailer’s point of view, the “build” strategy should come through a strategy for reaching out to the consumer base. According to Hoffman, retailers should view themselves not only as a supplier of goods but as marketers as well, and should work to drive take-up through the new channels they are introducing.

Hoffman cited the quick-service restaurant (QSR) industry as one vertical in which merchants and retailers have designed and marketed their MPOS solutions, while ROAM has handled the technical capabilities.

“Traditionally, QSR has relied on all walk-in traffic, and some of them very much would like to start catering and delivering, as well as creating pop-up stores or event planning,” he said. “But, they’re really stretched as to how they would accept payments in those environments.”

In this way, Hoffman said, the retailers are left to serve as “the brains behind innovation and sales strategy,” while ROAM tackles the technical aspects and “supports those ambitions.”

And according to Hoffman, those technical details are truly often best left to companies like ROAM as they take pressure off of retailers themselves. Hoffman noted that compatibility becomes tricky in the MPOS world once you venture outside of iOS platforms, and predicted that the market will only become more clouded moving forward.

“Folks have been able to put together funding to build out an iOS application, but you also have to consider Android,” Hoffman explained. “And what happens when Windows 8 starts to take off and we see Microsoft getting share? And you can never really count BlackBerry out, because they certainly think they’re going to grow their market share.”

This is where the “buy” part of the MPOS equation factors in, as retailers and merchants can rely on “powered-by” specialists to deliver results across multiple, dynamic platforms.

“If you look at the application side, putting the onus on your partner and driving an aggressive roadmap through a company like ROAM … as your customers become demanding, you can put that pressure on your outsource partner vs. trying to continue to invest,” Hoffman said.

To hear more from Webster and Hoffman on build vs. buy in the MPOS ecosystem, listen to the full podcast below.

 

*If you have trouble with the audio player above, click here.


Eric Hoffman

Senior Vice President of US Sales

Eric has over 20 years experience in senior sales management roles in the electronic payments industry including Executive Vice President at Acculynk and Senior Vice President positions at Bank of America Merchant Services and First Data Corporation. He was a key member of the senior management team and responsible for building the Global & National Card-Not-Present sales organization at Bank of America Merchant Services at the time of the formation of the joint venture between Bank of America and First Data. While at First Data, he managed the National Merchant Services sales organization. Prior to that, Eric had strategic account responsibility for two of First Data’s largest issuing bank customers. A native of the Boston area, Eric holds a B.A. in Communications from University of Massachusetts at Amherst.

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