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This article appears in the July 23, 2009, edition of ISO&Agent Weekly.
Splyce Inc., a software firm that once sold its operational and payment software exclusively to movie theater operators, is spinning off the payment component of their software for general retailers to use.
The new division, called Carpe Charge, will work with the payments industry, including ISOs and acquirers, to sell its virtual payment terminal to merchants, says Dean Burke, director of marketing at the Gig Harbor, Wash.-based company.
The terminal sells at an annual fee of $79.95 to merchants and has a $29.95 commission for sales agents, Burke tells ISO&Agent Weekly. The company does not require agents to share transaction revenue with it, Burke says.
The terminal can be used alone or integrated into a merchant's point-of-sale system, something with which Carpe Charge will help merchants, Burke says.
The decision to create a new division to market the payment terminal is based on Splyce's experience in the movie theater business, Burke says. Data from current customers already are sent to more than 90% of payment processors, he says, adding the terminal is compliant with the Payment Card Industry Data Security Standard.
Merchants download the software from the Carpe Charge Web site. Once a merchant activates the software, sales agents get access to a Web site to get activity reports on their merchants using the software, Burke says.
Splyce's move is not an unfamiliar one for technology companies to take.
Finish The Solution
Independent software companies often look for new ways to generate revenue by entering an industry in which they have some experience, says Brad Bialas, president of BluePay Processing LLC, a Naperville, Ill.-based ISO
As in the case of Splyce and its Carpe Charge division, the software company developed an expertise in a particular vertical market but now wants to broaden the prospective customer base to generate more revenue.
"They're looking for a partner to finish the solution," Bialas tells ISO&Agent Weekly.
"Now they have a new recurring revenue stream and a differentiator for their product," he says.
It can work in reverse, too.
BluePay found when a merchant shops on price, it means the ISO's profit margins decrease, Bialas says.
BluePay wanted a more lucrative product; BluePay HQ was one result.
Built around card-processing services, BluePay HQ also incorporates a BluePay-developed online-payment gateway and tokenization service. Merchants use tokenization as a stand-in for sensitive transaction data to ensure a merchant's payment system retains none of the data.
Bialas says his company wrestled with the decision to develop this technology in house or to use outside developers.
In the end, having the ability to quickly adjust the software to fit a customer's needs was more important than potential cost savings from using outside developers.
"Owning the intellectual property and being able to tweak on time for a specific customer and realize that tweaked version could be marketed to another 200
customers is valuable," Bialas says.
Evolution Is No Surprise
It is no surprise that technology firms move into payments, says Donna Embry, senior vice president at Payment Alliance International, a Louisville, Ky.-based ISO.
"It's always been an evolutionary process," Embry says.
Today's larger payment companies started in technology, she says, citing First Data Corp. as one example. Going back a couple of decades, Greenwood Village, Colo.-based First Data sold software for the bankcard industry. Eventually, First Data became a processor.
Embry says her company's approach echoes that evolutionary model. Payment Alliance's sales agents are charged with looking at all modes of payment a merchant might use and which technologies can help them.
"You have to marry technology for technology's sake with the business environment," Embry says.
Embry has no doubt that technology will remain an increasingly important element of the payments industry, albeit with one difference from earlier times.
"The difference between the evolution of technology today and even 15 years ago is the speed at which is it able to be delivered," she says. "Previously, it might have taken a year to get to market. Well, no one today has a year."
