Payments As A Service

Outsourcing The Merchant’s Biggest POS Headache

Cayan PaaS Solutions

Merchants today need to do a lot more than they did just five years ago. From advancing technologies to cross-channel payments, it’s tough not only to deliver on it all but also to do it well. Though there’s no magic bullet, Henry Helgeson, cofounder and CEO of Cayan, told Karen Webster it starts with anticipating needs and taking calculated risks to solve problems.

The sum of the parts is greater than the whole, it’s true. But when you’re the one actually tasked with figuring out which parts are the relevant inputs to that equation, well, sometimes it’s easier said than done.

That’s the environment facing merchants today as they contemplate the many point-of-sale (POS), payments method and commerce-optimizing options facing them. They all sound good, and many seem plausible, too. Yet, deciding exactly which to choose, and then allocating the time and resources needed to integrate them across the myriad of shopping channels consumers now use is a challenge. That’s why the use of Payments-as-a-Service (PaaS) is becoming much more relevant, Henry Helgeson, cofounder and CEO of Cayan, told Karen Webster.

The payments space, Helgeson said, has grown up as a collection of many players, i.e., hardware and software vendors, gateways, processors and security vendors, for example. Rather than operating under any type of unified umbrella, you’ll find them operating independently and in their own silos, and often on their own channel — be it mobile, in-store or web.

But, Helgeson said, there’s been a huge shift over the past 24–36 months to solutions that instead bring everything together for the merchants under one roof.

"All of this fragmentation now has to come together for the merchant, and it’s time-consuming for them to source and then integrate with multiple vendors to get the products to do what the merchants need them to do around payments,” he explained.

PaaS solutions providers, which aim to deliver on not just one but all of a merchant’s needs, represent a move away from the fragmented and often complex network of vendors merchants are sometimes faced with relying on.


Payments At The Forefront

Not too many years ago — maybe 10 — payments really meant just hooking up a magstripe reader to a POS that rarely got breached in order to pass static data down the line and get approval; it was very simple.

The independent software vendors (ISVs) that typically dealt with merchants on the business side didn’t have to worry so much about payments because that was handled separately by independent service organizations (ISOs), who sold payments processing as a standalone service.

Today, however, payments are no longer just an afterthought or a function separate from the business. Often, payments are central to the transformation that these merchants are seeking across the myriad of consumer channels that have developed.


Why There’s No Magic Bullet

Today, Helgeson explained, ISVs have to figure out how to interface and manage different hardware solutions, including EMV and NFC: “They're being asked to do a lot more around loyalty, and they're scared to death around security concerns and breaches.”

"It seems like that rate of change is accelerating around Payments-as-a-Service,” he added.

But delivering PaaS is tough, as it’s actually a lot more than just “connecting” payments to software. Remember, today’s consumer wants to be served on an ever-growing number of channels, so merchants need to ensure that all these systems are interconnected. It’s not enough to just worry about software on the back end anymore.

"One of the things that makes PaaS so important is that there really isn't just one need the merchants have; it's multiple things,” Helgeson said, adding that, depending on the day, an ISV’s attention may shift from one critical point to another.

Indeed, there’s a lot of work to be done to meet merchants’ needs today. The EMV solutions put in place back on Oct. 1, 2015, weren’t really ideal, so those need to be addressed — plus, there are real security threats that keep CTOs up at night. Not to mention delivering on the omnichannel and unified commerce capabilities that will keep merchants competitive.

Keeping ISVs and the merchants they serve at the top of their game is hard work, no doubt.

"No longer is it just standing up a gateway and opening an API for ISVs to write to. We're now in the business where we're writing code that actually sits on these devices, exposing APIs for eCommerce, doing 360-degree reporting for the merchant. There's quite a bit more to PaaS than what we saw in payments five years ago,” Helgeson explained.


Getting The PaaS Job Done

Though it’s difficult to deliver on all of the pieces of the puzzle, and especially to deliver on them well, Helgeson said it starts with ISVs building the right organizational foundation and remaining nimble.

Listening to the customer is key, and often, it means helping them unpack the complexities. But anticipating their needs accurately is perhaps the most important of all, as it keeps solutions moving forward, rather than having to go back to the drawing board when the solution anticipated wasn’t the right one. In today’s game, there just isn’t time for that.

"We are in a world now, more so than ever in payments, that it really is about taking very calculated risks. We don't wait for the market to demand something. You have to sit down with your teams, look at what's coming down the pipe and start to build for that,” Helgeson emphasized.

"It's not always just what the customer is asking for today. You have to have the right vision and a willingness to go out there and take those risks in this new world of payments.”



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.

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