by Allen Weinberg

This year’s annual ETA seemed bigger than in previous years, and from almost everyone that I spoke to, much more exhausting. In my humble opinion, this was the first year that had a really compelling set of sessions to choose from. Unfortunately, I and quite a few others were never able to make it to many or even any of the sessions. Chalk it up to many more exhibitors to talk to, and the presence of many more old friends and colleagues to catch up with!

I always look forward to ETA as one way to keep my finger on the pulse of what’s happening in the industry, particularly trends that emerge from one year to the next. So let’s start with what was new – well, sort of — PCI. While barely present at all last year, this year there were a number of companies showcasing PCI and other security-related services. Yes, PCI may finally be moving into the lower volume tier merchants. There were secure hosting solutions, thin client solutions, and other rather turn-key approaches that essentially made sure that sensitive cardholder data was never “at rest” on merchants’ machines and was secure when “in flight”. I’m betting that there will be even more next year.

And then there were the merchant cash advance offerings. While I noticed an apparent uptick last year in the number of vendors that provide working capital to merchants against their credit card receivables, there were a few more here this year. I had the chance to talk to a few of them in some depth to get a better understanding of why this much valued service offering seems to have grown so much over the past year. Its no secret that small/medium sized businesses have always had cash flow challenges, and there have been a number of firms out there, such as AdvanceMe, Quarterback Funding, FastCapital, Strategic Funding Source, and others to help merchants get precious cash, paid back through regular payments diverted from their credit card settlements (or via ACH withdrawals). But why did this area of the payments industry seem to show so much recent growth? My sense is that are several reasons, but probably one or two principal factors. First and perhaps foremost, acquirers/ISOs are promoting it much more heavily to their merchants. Why? A cut of the revenues for sure, but perhaps more importantly, improved retention. The providers cited impressive statistics of repeat/loyal merchant users. And acquirers have gone out of their way to automate the repayments from the merchant settlement file to the cash advance provider in a seamless fashion. Those two factors appear to make merchants utilizing these services via their acquirer much more stable than otherwise. For acquirers, a nice way to mitigate the ever present and dreaded merchant attrition problem.

And no ETA would be complete without a new crop of terminal manufacturers from Asia (principally Taiwan and Korea) trying to enter the US market by offering low cost devices. Much to my chagrin, almost all are using proprietary operating systems and don’t’ stand a chance of selling any units at all to the US market. There were 4 or 5 such companies that were here last year but not this year. And of the 4 or 5 new entrants appearing this year, I’ll take bets re: how many will be back next year.

Having said that, I did have to admire one or two of the offerings from a technical perspective, particularly Pidion (www.mypidion.com). Very, very elegant hardware running Windows CE and Pocket PC. My sense is that this was as much a handheld/small footprint PC as it was a payments terminal. As Exadigm (Linux based) approaches “mainstream” in the coming year with its impressive list of new Class A certifications, Pidion might very well be the next one to watch!

Anyway, if you were at ETA, I’d love to hear your impressions of the show and what you saw there, and if you weren’t feel free to track me down with any questions and comments as well!

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