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Under a direct sales model, the success of any customer engagement hinges on two prime capabilities: ensuring a high level of customer confidence and gathering all of the information needed to close the deal at the point of sale. Even at Southwestern Advantage—the oldest direct seller in the U.S. and a trusted brand—we sometimes faced these dual challenges in the past, as customers were nervous about sharing credit card information with our college-aged representatives.
While nearly all direct sellers now accept credit and debit cards, until recently most Southwestern Advantage dealers still wrote out credit card information on paper forms for processing later. It’s a common practice, but we found that it sometimes led to lost sales, not only from those nervous customers but also from transaction declines due to incorrect or incomplete account numbers on forms and transaction chargebacks.
The solution to this problem for direct selling companies is implementing a mobile point of sale (mPOS) solution. We recently piloted such a solution, and based on the success of that pilot we are now in the process of rolling it out to our 2,500-plus dealers. We predict that we’ll save tens of thousands of dollars per year on processing fees by taking advantage of card-present rates and greatly reduce declines and chargebacks. Because most of the cost associated with our mPOS solution is variable, the more business we do, the more we’ll save.
We learned, however, through our vendor evaluation and pilot that not all mPOS solutions are created equal. If you’re a direct seller considering a move to mobile POS, here are some key questions to ask vendors once you start your journey.
1. What kind of up-front investment is required?
At Southwestern Advantage, our sales model relies on entrepreneurial college students who offset their educational expenses by running their own business selling educational products to families in the communities they serve. We work to keep the investments our sellers make low and wanted to provide each with a mobile card reader for a small security deposit; unfortunately, some vendors required an investment of hundreds of dollars per reader. We wanted a solution provider with flexible pricing and ideally one that required a minimal up-front investment.
2. Is your product PCI compliant?
This is a must for mobile POS. The main problem when cardholder information is gathered manually is that, in spite of a seller’s best efforts, there is really no way to ensure it is completely secured. Paper forms are by their nature not a particularly secure form of communication.
In our search for an mPOS solutions provider, PCI compliance was a major consideration. Ensuring that cardholder information would be encrypted before it entered the mobile device was vitally important. Be sure your provider offers end-to-end, strong encryption, robust data protection for all payment transactions and full compliance with regulations such as PCI.
3. Can we keep our current credit card processor?
Let’s face it, changing credit card processors is a labor-intensive, time-consuming process—one you shouldn’t have to undertake without a compelling business reason, which was why the ability to keep our current processor factored into our decision-making process. The solutions provider we selected was “processor agnostic,” allowing us to maintain our existing merchant processing relationship, an option not offered by all vendors. This benefit eliminated the hassle and expense of making a transition.
4. Can your solution integrate seamlessly into our existing infrastructure?
Like Southwestern Advantage, your organization has likely made major investments in a customer relationship management system or mobile commerce platform. You should focus your mPOS search on solutions providers that offer APIs (application programming interfaces) to support seamless transaction and reporting integration, whether a salesperson is transmitting cardholder data, checking inventory or tracking delivery. You’ll get so much more value out of mPOS if it’s the final step in a broad mobile commerce strategy, with capabilities such as branded receipts and the ability to review transactions from existing enterprise systems.
You should also ensure that your new mPOS solution will be compatible with all types of mobile devices. Southwestern Advantage supports more than 2,500 independent sales representatives who seem to rely on nearly as many different iOS or Android smartphones and tablets. Many mPOS solutions only support iOS.
5. Can we speak with some existing customers?
In our evaluation process, we discovered real advantages to working with a solutions provider with a proven track record in the payments space—and with a portfolio of clients already using their mPOS solution. We were able to leverage their advice and best practices during our pilot and implementation to make the rollout as smooth and seamless as possible.
6. Is your solution global-ready?
Every country has different rules and regulations, and obviously many have different currencies. If your organization is global, or thinking of expanding globally, it’s absolutely vital that your payments infrastructure—including any mobile POS tools—be global as well. One simple example is whether or not the system supports chip and PIN cards, chip and sign cards (used internationally), and the magnetic stripe cards used in the U.S. If it doesn’t, and global expansion is important to you, move on to the next vendor.
Mobile point of sale technology offers real promise for the direct selling industry, but the quality of solutions varies widely, and we found through our evaluation many are not truly enterprise-ready—they are designed for micro-merchants rather than large, established companies. To capitalize on the promise of mPOS, most effectively, you need a strong partner. Ask these six questions to help you arrive at the right one.
|Tim Thomas is Director of Marketing, and Brad Bohn is IT Senior Business Analyst, both at Southwestern Advantage.|