An Impatient ISO Retools to Sell Emerging Transaction Technology

International Merchant Services Inc., which has taken on all new senior management over the past 11 months, is launching a new marketing blitz this week whose underlying message might be characterized as impatience with the electronic transactions business. Hoping to accelerate the progress of promising payment technology that for a variety of reasons hasn't been widely embraced by acquirers, the Westmont, Ill.-based independent sales organization has plans to move into emerging markets like mobile payments and contactless cards and is in the midst of a major push for pay-at-table technology. “We're trying to make a change,” says Don Smith, a former consultant and Microsoft executive who took over IMS last August as president and chief executive. “[We're saying] to the industry, 'You're not moving fast enough in some areas.'” In particular, Smith argues most acquirers have become fixated on current methods and technologies and risks losing out on emerging opportunities. “The industry is so focused on the bread and butter, it's not focused on the next wave,” he says. Nearly two decades old, IMS this week launched a completely overhauled Web site as well as a charitable program in which merchants can designate non-profit organizations to which IMS will direct 20% or more of its transaction fees. It's also working on an ISO and agent-bank program for the first time, and is starting to investigate a mobile phone branded by IMS and built to its specifications that could perform contactless transactions using near-field communication (NFC) technology. “Within a year, we'll have a product on the market,” promises Smith. But its first initiative is in wireless technology that allows waiters or sales clerks to process cards anywhere in the store, not just at the cash register. This is commonly called pay-at-table, because it is aimed chiefly at restaurants, which make up a little more than 5% of IMS's 15,000 merchants. Smith argues not enough acquirers are pushing pay-at-table terminals. “The technology is there, why aren't we using it?” he asks. The company is testing these mobile terminals with half a dozen merchants, looking to see whether it yields results on such criteria as the rate at which tables turn over. But it's also talking to a major furniture store about using the devices. “Why does pay-at-table [necessarily] mean a restaurant?” asks Smith, who points out that wireless devices allow stores to avoid lines at central cash registers. Says J. Larry Daniels, a veteran of the acquiring industry brought on by Smith as executive vice president: “We're trying to capture sales that would otherwise walk out the door.” Daniels is heading up IMS's first efforts to recruit ISOs, sales agents, and agent banks to represent it in the field. Up to now, the company, an ISO for BancorpSouth Bank, Tupelo, Miss., has relied entirely on an internal sales force. The first ISO, sales agent, and bank have been signed, with more coming in the by the end of the third quarter, Daniels says. He promises clear-cut contracts that include IMS's costs as well as timely payments, both items many sales agents have complained over the years they can't find, Daniels says. “Once they see the value proposition we have, those who are serious about having a home and getting paid, those are the ones who will come with us,” he says. Among the things they may be selling is contactless acceptance and a custom-built handset for NFC transactions. IMS has historically branded the equipment provided by manufacturers, but the handset would be built to its specifications as well as bear its brand. Disputes between the bank card networks and the wireless carriers have hindered the progress of NFC, but technologies have emerged recently that would allow banks to issue devices to their customers that wouldn't depend on carrier technology (Digital Transactions News, June 4).