Payment Methods

Payments Enablement: Why Reselling A Gateway Is No Longer Enough

Look to any recent payment industry publication, and you’ll find that technology dominates the conversation.

Mobile payments, eCommerce, bitcoin and tech startups are being acquired by industry giants — and headlines are overrun with all things payments technology. And yet, none of these technologies are truly disruptive (yet) in the most orthodox sense of the word; after all, cash is still king, even if the margin of its reign over debit and credit cards is slim. With the overwhelming majority of payments still being made using cash, debit, or credit, many of today’s merchants have chosen to cater to the needs of their current customers and stick with providing payment options they’re familiar with.

As a result, many independent sales organizations (ISOs) have grown complacent in their offerings, often choosing to simply resell basic gateway services along with a merchant account. And in the past, that traditional ISO model has worked, and many merchant acquirers have become very successful by clinging to it.

However, success gained by maintaining the status quo is often fleeting, as we’ve seen time and again when seemingly unstoppable industries are felled by upstart technologies (think horse-drawn carriages, monks doing calligraphy, cassette tapes, typewriters). The problem with technology is that in its infant stages, it is often prohibitively expensive, time-consuming to develop, and does not serve the majority of any successful company’s target demographic. These reasons are often why a thriving company will not invest in bleeding-edge technology: the risks seem to overpower the benefits. And by the time the benefits have been widely shown, market share has been eaten up by new entrants, and the formerly thriving company has lost out on a huge opportunity.

We see this trend happening right now in the merchant acquiring space. Merchants are waking up to the fact that digital payments, including newer entrants like mobile wallets and biometrics, are poised to be the next major disruption in commerce. As a result, they are turning to ISOs for the technology that will enable them to accept new forms of payments from customers. However, due to the aforementioned principles that govern disruptive technology, many ISOs have not taken the steps to prepare for this sea change in the payments landscape, and are unsure of what technology to invest in. Not only that, how do they invest in that technology? Do they build it on their own? Attempt to acquire a startup that has a piecemeal solution in the works?

What many ISOs and other merchant acquirers don’t realize is that the technology fueling this latest disruption is already on the market. Payments Enablement Technology has been in development for years in anticipation of the trends that are now coming to fruition in consumer and B2B payments, and is poised to take ISOs and their merchants into the future of commerce. As ISOs were doubling down on their existing methods of reselling and promoting the brands of gateways that belonged to other companies, a truly revolutionary technology was in the works that would allow ISOs to become the gateway themselves, essentially turning them from resellers into frontline technology providers.

Payments Enablement gives ISOs everything they need to help their merchants stay relevant in a quickly evolving retail market where payments have become a commodity. This includes:

  • A sophisticated gateway that can be branded by the ISO, removing the need to share brand equity with a third-party provider
  • Unrivaled data security that assures ISOs their merchants can more simply achieve PCI certification
  • Protection from the costs of fraudulent transactions in the form of a powerful real-time fraud scrubbing tool
  • Support for multiple acceptance methods so merchants can compete in an omnichannel retail space
  • Back office support, including technical support, that removes the need for ISOs to house trained personnel
  • Extensive reporting capabilities that allow ISOs to provide the best service to their merchants, and allows merchants easy access to valuable data they can use to more effectively market to their customers
  • Core features such as flexible billing, which allows ISOs to mark up value-added services in order to realize profit from providing their merchants with the best in payments technology, as well as a multi-tiered hierarchy that offers ISOs the opportunity to recruit and track sub-affiliates

Merchants who want to remain relevant in a technology-saturated market need a strategy, and ISOs who want to be a part of that strategy must consider the benefits of offering their merchants an all-in-one payment technology solution. It’s no longer enough for an ISO to simply offer a gateway and leave it at that; in order to be competitive, ISOs should weigh the benefits of becoming the gateway themselves. Payments Enablement Technology makes that possible, giving ISOs the opportunity to take a sophisticated payment platform and all its value-added services, brand them as their own, and offer them to merchants looking for the best in payments solutions.

The best part? ISOs can do all this without gambling their own financial health, making Payments Enablement an innovation that brings all the rewards with none of the traditionally associated risk — a win-win for ISOs and their merchants.



The How We Shop Report, a PYMNTS collaboration with PayPal, aims to understand how consumers of all ages and incomes are shifting to shopping and paying online in the midst of the COVID-19 pandemic. Our research builds on a series of studies conducted since March, surveying more than 16,000 consumers on how their shopping habits and payments preferences are changing as the crisis continues. This report focuses on our latest survey of 2,163 respondents and examines how their increased appetite for online commerce and digital touchless methods, such as QR codes, contactless cards and digital wallets, is poised to shape the post-pandemic economy.