A long-held belief of merchants has been to own the POS solution as well as the corresponding payment application. Such an important piece of the business should be seen as an asset on the balance sheet. But the rapid succession of features/advancements (i.e. omnichannel support, mobility, cloud service, EMV and Security Enhancements) requires near constant and costly upgrades to avoid becoming obsolete. SaaS (Solution-as-a-Service) models are picking up steam and offer relief to overwhelmed merchants as well as opportunity for the POS providers that support them.
According to Datacap’s annual ISV/VAR industry survey, 59% of VARs/ISVs offer a recurring revenue “as-as-service” model for their POS solutions to SMB merchants. The other 41% predominantly use the break/fix or “one-time” sales model. Survey responses indicate 22.8% of merchants are using a Point of Sale obtained via an “as-a-service” model, which presents a massive opportunity for ISVs and VARs to migrate their merchants to an “as-a-service” model for their solutions to build recurring revenue. Datacap’s “Direct Rental” program enables VAR/ISV partners to seamlessly migrate to a SaaS payments model without any risk.
What is Direct Rental?
The Direct Rental Program offers a solution-as-a-service (SaaS) model to obtain Datacap’s proprietary payment solutions (NETePay™, TranCloud™, Tran™). Billed via a flat monthly cost, POS providers have the control and flexibility to determine their own recurring revenue rates regardless of which payment processor is used. With no-charge upgrades/processor-switches, POS providers can ensure their merchants that the latest and greatest solutions are always available to them.
Why do you need it?
Simply put – Control. Rental programs aren’t new. POS providers have been taking advantage of SaaS models from payment processors for 15 years. The difficulty however, is that the merchant is locked to that particular payment processor. To change processors was to start from scratch. And the POS providers income from the payment application was determined entirely by the discretionary residual split of the participating processor. If those splits are reduced, POS providers are forced to offer the same level of service for only a portion of the income. By taking advantage of a Direct Rental, POS providers are in the driver’s seat. Any payment processor’s services are available to them at the same cost and with the same income opportunity. Datacap bills the POS provider a flat monthly rate that they can then apply their own desired margins to. They can shop for best rates/services and truly be a trusted advisor of the merchant.
What other perks does the program include?
Recurring Revenue – Flat, wholesale monthly billing allows the POS provider to determine and predict their own revenue stream. Confidential pricing from Datacap allows the POS provider to apply their margin freely.
Unlimited Upgrades – Newly released feature? New processor requirement? Upgrade to the latest versions of Datacap software at no additional charge.
Processor Switches – Shop rates and performance of payment processors without concern for your income dependence. When your merchant wants to change processors, you can accommodate without impacting your ability to make recurring revenue.
Cloud Management – Board and manage your entire merchant catalog via Datacap’s PSCS (Payment System Configuration Server) portal. Available 24/7 to onboard new merchants, upgrade/switch processors, or shut-down accounts that are no longer active.
No Minimum Term and No Per-Transaction Fees – Rental, not a lease, so there is no minimum term. You only pay for the service as long as your merchant is using it. Flat-rate pricing means simple price quotes and easy-to-forecast revenue.
Reach out to your Datacap rep today to learn how you migrate from break/fix to SaaS via Datacap’s channel-centric Direct Rental program!