Mobile Payments

ISVs And Future-Proofing Payments Integrations

If one thing is certain about the future, it’s that nothing can be certain – so it’s best to be prepared for everything. But when it comes to payments technology, that can be easier said than done.

Jeff Zimmerman, COO at Clearent, says that embedding payments into software is, admittedly, a difficult task for ISVs, given the myriad types of devices their customers are using to run the software, as well as the different types of payment devices and methods that their customers want to use in conjunction with the system.

“Things will keep changing,” Zimmerman said in a recent webinar with Karen Webster. “That makes payments integration a tall order because it isn’t a static, one-time decision; it needs to be open for changes tomorrow.”

That’s why he says ISVs can no longer approach a payments integration as an afterthought. While it was once a “necessary evil” that could be tacked on after all the other features had been built, today’s end users expect a seamless, built-in experience, not a redirect to a web-based payments process, Zimmerman said. Business owners who use that software want to get paid faster, reduce errors and save time and energy on entering and reconciling information across systems.

Integrated payments can advance all of those goals, Zimmerman noted, improving the experience for business owners as well as the end customers who interact with them.

During the webinar, Zimmerman and Webster were joined by Eric Rausin, VP of research and development at FieldEdge, an ISV that offered the customer perspective on the three ways that payments players and their software partners can collaborate to future-proof payment integrations.

1: Look to the Cloud

Cloud migration is definitely a macro-trend in the software space, said Zimmerman – and it’s one of the reasons it’s a good time to be a B2B software company today.

Zimmerman said that Clearent’s aim is to enable companies to choose from as many payment options as they need while minimizing the work necessary to do so, and that is where moving to the cloud can have the greatest benefit.

Before EMV, the traditional “integrated” approach meant integrating a magnetic stripe reader into the point of sale (POS) machine. That was easy for cashiers to learn, and it gave organizations more control over the customer experience. However, said Zimmerman, the credit card data flowing through the POS subjects the organization to PCI and other compliance certifications, which could be onerous.

That led to a semi-integrated approach, sparked in part by the introduction of EMV, which these traditional machines could not accommodate. In the semi-integrated environment, the card reader was attached to the POS device but was not fully integrated, keeping sensitive card data out of the software to avoid the PCI problem.

However, Zimmerman said, semi-integration created its own set of challenges. There were many moving parts involved in the transaction: the POS software, the credit card machine, the payment processor. Anything that touched card data along the way had to be certified, and anytime one piece changed, the whole system had to get re-certified.

There was also the complexity of integrating the POS to each device manufacturer, including challenges around cable connectivity.

Zimmerman said that cloud integration is the new option that solves some of the problems with semi-integrated systems. One integration through the cloud supports many different device brands, and can continue to do so as even more devices and brands get introduced in the future.

As Zimmerman noted, the cloud also resolves the cable connectivity challenge. The POS and card-reading device each require internet connections, but they are not physically connected to each other, so as long as they’re connected to the internet, the cashier can move them around as needed rather than, say, ask customers to reach in through the drive-thru window to pay.

For FieldEdge, which supports payments for home service providers working in the field – such as HVAC specialists, electricians, locksmiths and plumbers – Rausin said that a cloud-based Bluetooth solution is beneficial, because many techs keep their devices in an OtterBox or LifeProof case that makes it difficult to attach mobile card readers or dongles on the go.

2: Think Mobile

Speaking of on the go, Zimmerman said mobile is the second key to future-proofing software solutions. It enables people to take their payments anywhere, whether that’s home, work, the train or vacation – even within certain brick-and-mortar stores.

Mobile payments encompass many different scenarios, Zimmerman said. Customers using Apple Pay or Google Pay at a store’s POS is just one form. “Mobile” can also mean that the business owner is using a mobile device to take the payment, or that the consumer is executing the transaction remotely from within an app or mobile website.

For early adopters, super-connected consumers and younger demographics, a personal device can be a sort of self-service terminal wherever they go. Early research by PYMNTS shows that many want to use their mobile devices more heavily to support in-store payment experiences, and otherwise get more utility out of their devices on the go.

Although adoption has been lackluster for technologies like Apple Pay, Zimmerman does believe it will happen – and, indeed, EMV could help it get there. Dipping cards takes longer than swiping, and today’s consumers want transactions to take less time, not more. Mobile payments could offer that.

Zimmerman also believes that loyalty and rewards could be a big driver for greater mobile payment adoption, and cites the lack thereof as a reason for consumers’ tepid reception toward Apple Pay. The Starbucks mobile app, he noted, delivers a nearly identical experience at the POS, but it has seen much more enthusiastic adoption thanks to the extra incentives the company added for frequent users.

Mobile, said Rausin, enables home service providers to accept payments instantly out in the field. There’s no collecting cash and checks, no chance of payments blowing out the open window between one job and the next, no chance of something winding up under the seat or in a puddle before the tech can make it into the office for his once- or twice-weekly deposit visit. Tablets and phones let techs create invoices or accept payments right at the moment when services are rendered.

“Our job as a software provider is to make our customers’ lives easier,” Rausin said. “They should never have to enter information twice. And when they accept a payment in the field, it needs to flow through to the financial package, and it needs to happen one time only, in a way that no one in the office has to touch the data or ever even see it.”

Rausin added that some customers, particularly commercial ones, aren’t going to pay right there in the field, and they shouldn’t have to. Mobile allows techs to create invoices in the moment and send them later, then end customers can pay whenever and however it’s convenient for them.

“You don’t want any obstacles between you and a sale,” Rausin concluded. “Make it as easy as possible to do business with you.”

3: Be Agile

“The only thing we know about the future is that it will change,” Zimmerman reiterated. “Think of it as customer-oriented and problem-oriented.”

Zimmerman said “agile” goes beyond software development. Sales, customer service and technical teams must also be agile so they can quickly support new things when they come out. He said a software provider that owns its own tech stack is appealing for this reason, because it has the ability to act as soon as something new emerges, delivering in months rather than years.

“Customers don’t want to hear, ‘We’re adding it to our 2021 roadmap,’” he said.

Rausin agreed, describing how the growth of the subscription model led FieldEdge to need an ACH integration and tokenization so it could help customers accept recurring payments. He said FieldEdge needed a partner that adapted to this evolution, or was maybe even ahead of it, so the partner could be responsive about solving the problem rapidly.

Rausin said that FieldEdge also looks for software partners that own their tech stack, because when something goes wrong (and that’s inevitable, at some point), having a knowledgeable partner that owns its own stack means getting help when it’s needed. Developers from one software partner can talk to developers from the other to get reliable answers to solve problems as quickly as possible.


The bottom line, according to Zimmerman, is seamlessness. He reiterated that payments must be a focus rather than an afterthought for software developers. Rausin agreed, adding that integrating payments in a modern, functional way is not as expensive as people think.

“Any exposure to risk, anytime there are delays, anytime you’re entering data twice, that’s more expensive than any charges for implementing,” Rausin said. “The key is to take the payment however it’s convenient for the customer.” And yes, that does require integration.


New PYMNTS Report: Preventing Financial Crimes Playbook – July 2020 

Call it the great tug-of-war. Fraudsters are teaming up to form elaborate rings that work in sync to launch account takeovers. Chris Tremont, EVP at Radius Bank, tells PYMNTS that financial institutions (FIs) can beat such highly organized fraudsters at their own game. In the July 2020 Preventing Financial Crimes Playbook, Tremont lays out how.