The Changing Landscape Of Software And Payments

By Greg Cohen, President of iPayment

Over the past 10 years we have seen the merging of two previously distinct businesses ‐‐‐ payment processing and retail software. Organizations such as Mercury Payments, Accelerated Payments and PayPros (now openedge), Braintree and Stripe have not only captured attention with major headlines but also massive financial valuations. Interestingly, much of the heavy lifting associated with the success of these organizations was performed by technology providers, software vendors and value added resellers (VARs). The technology provider/software vendor has a deep and embedded relationship with the retailer as their solution not only provides a means to run a payment transaction, but it is also the center point of running the entire enterprise. In fact, most of these solutions could be described as ERP solutions touching every facet of a retailer’s operation. So why is it that if the relationship, installation, service and the vast majority of the value being brought to the retailer is owned by the technology provider, that the payment processor is deriving almost all the benefit – financial and otherwise? While software providers are developing and selling the software, the referral, and majority of the earnings potential from the customer account, is going to a payment processing partner.

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