News Roundup: PF InstaMed Introduces Secure Token for Patient Portals

In a roundup of this week’s industry news, InstaMed tokenizes payment information for healthcare patient portals, Adyen nearly doubles transaction volume, and PayPal has a busy week.

Payment facilitator InstaMed has introduced what it calls the InstaMed Secure Token. The token enables healthcare providers to integrate payments within their patient portals without storing sensitive payment information on their servers.

In a roundup of this week’s industry news, InstaMed tokenizes payment information for healthcare patient portals, Adyen nearly doubles transaction volume, and PayPal has a busy week.

GoOpti Expanding its Reach, Getting More Riders Where They Need to Go

Getting to the airport is not necessarily an easy thing to do. Driving yourself isn’t always practical, nor is it always pleasant after a long flight. Public transportation and shuttles can be difficult to schedule; you have to work with available times, and pick-up and drop-off points may not always be nearby.

GoOpti is looking to change all that, in an expanding number of locations across Europe.

Getting to the airport is not necessarily an easy thing to do. Driving yourself isn’t always practical, nor is it always pleasant after a long flight. Public transportation and shuttles can be difficult to schedule; you have to work with available times, and pick-up and drop-off points may not always be nearby. GoOpti is looking to change all that, in an expanding number of locations across Europe.

Tipalti Acts Like A PF In More Ways Than Taking Payments

Tipalti does a lot of things a PF does, except take credit card payments. The B2B accounts payable software service accepts six payment methods and does pre-payment checks against AML and OFAC lists and enables global payments, herding 26,000 payments rules and 120 currencies while streamlining supplier onboarding and providing everything but tax returns to its clients.

Tipalti just got $14 million in funding and chief marketing officer Rob Israch says accepting card payments is most likely in its future. It's another example of a perfect candidate to become a PF, but Israch says because it uses so many partners to do what it does, when it offers card payments to suppliers, freelancers, etc., the facilitation would most likely be outsourced. The company helps pay approximately 750,000 suppliers and remits $2 billion annually.

Tipalti does a lot of things a PF does, except take credit card payments.
The B2B accounts payable software service accepts six payment methods and does pre-payment checks against AML and OFAC lists and enables global payments, herding 26,000 payments rules and 120 currencies while streamlining supplier onboarding and providing everything but tax returns to its clients.

Podcast: Cozy A Great Example Of A Could-Be PF

Cozy, a platform to streamline interactions between property managers and renters, just secured what it hopes is its last round of funding, an $8.5 million Series B led by American Family Ventures. The four-year-old company strives to make the renting process between independent landlords and renters simple, secure and intuitive.

In three years Cozy has worked with three payment processors –BancBox, Balanced Payments, and currently Stripe--and vice president of engineering Rob Galanakis shared on this week's paymentfacilitator.com podcast the company's trials and tribulations with the churn and the decision whether to become a payment facilitator.

Cozy, a platform to streamline interactions between property managers and renters, just secured what it hopes is its last round of funding, an $8.5 million Series B led by American Family Ventures. The four-year-old company strives to make the renting process between independent landlords and renters simple, secure and intuitive.

Podcast: iClassPro Shares PF Lessons Learned

Chris McNabb didn’t set out to run an online registration tool for children's activity centers, he just wanted a better way to register kids for classes at his gymnastics facility. A techie but not a developer, he shopped his cloud-based solution at tradeshows around the turn of the century and in 2008 founded iClassPro.

Then, he used third party payment gateways but the hassles of the multiple gateways and extra friction "was weighing us down," he says. Three years ago iClassPro became a payment facilitator and McNabb gained peace of mind and business growth. In this week's edition of the paymentfacilitator.com podcast, McNabb explains the switch: what it solves, what the change entailed, how it has helped, and what the future holds.

Chris McNabb didn’t set out to run an online registration tool for children's activity centers, he just wanted a better way to register kids for classes at his gymnastics facility. A techie but not a developer, he shopped his cloud-based solution at tradeshows around the turn of the century and in 2008 founded iClassPro.

Podcast: A PF Platform Is Born

The payment facilitator model is exploding because of the vast number of small to medium sized merchants who like their lives uncluttered by multiple partners trying to help them run their business, including those that enable them to accept electronic payments. They want the simplicity of valuable services as well as payment ability, and not from two vendors.

But becoming a payment facilitator is no picnic; who's there to help potential payment facilitators who are hesitant to take on the maze of underwriting, compliance, fraud risk, and monitoring despite the growing evidence that market share and revenue can be gained?

The payment facilitator model is exploding because of the vast number of small to medium sized merchants who like their lives uncluttered by multiple partners trying to help them run their business, including those that enable them to accept electronic payments. They want the simplicity of valuable services as well as payment ability, and not from two vendors.

Appealing To Lots Of Merchants Can Be An Awful Strategy

It can't be said enough: If you want to be special, specialize.

The way to success in payment facilitation is not to appeal to as many merchants as possible, it's to appeal to as many of a certain kind of merchants as possible. There are exceptions like bill.com, which targets any business that pays employees, but even then it specializes in one part of what merchants need: to streamline accounts payable and receivable.

It can't be said enough: If you want to be special, specialize.

Microsoft And An Australian Mum; The Next PFs?

Small business is booming; sometimes it needs a payment facilitator and sometimes it becomes one. Sometimes huge business takes the plunge too.

Microsoft this past week introduced a Microsoft Office Service named Microsoft Bookings, designed to ease scheduling of appointments for business owners between themselves, employees and customers. It's a short leap to see that businesses could ask customers making appointments to pay first or lock in a date with a deposit. MindBody comes to mind, with its focus on wellness businesses and appointment bookings and payment enabling.

Small business is booming; sometimes it needs a payment facilitator and sometimes it becomes one. Sometimes huge business takes the plunge too.

Non-Profit PFs Won’t Like This – Facebook, The Latest PF, Is Going To Take Your Share

Facebook is charging back into the payments space but this time charging hard -- taking 5% on every donation it processes through its recently launched non-profit features, announced to page administrators Tuesday. Facebook introduced a Donate button for 19 select non-profits in 2013, but didn't charge a fee, instead sending 100 percent of donations to the charity. The social media giant says of each donation made through Donate buttons that keep donors on a non-profit's page:

"We’re committed to building products that make it as easy and safe as possible for people to contribute to the causes they care about. To make this possible, starting in August, 2% of contributions will be used to cover a portion of the costs of nonprofit vetting, security, and fraud protection, operational costs and payment support and 3% of contributions will go to payment processing. The remaining 95% will go straight to the nonprofit. Facebook's goal is to create a platform for good that’s sustainable over the long-term, and not to make a profit from these charitable giving tools.”

Facebook is charging back into the payments space but this time charging hard -- taking 5% on every donation it processes through its recently launched non-profit features, announced to page administrators Tuesday. Facebook introduced a Donate button for 19 select non-profits in 2013, but didn't charge a fee, instead sending 100 percent of donations to the charity. The social media giant says of each donation made through Donate buttons that keep donors on a non-profit's page:

On China’s Payments SuperHighway, Regulators Stomp The Brakes And AsiaPay Hits The Gas

When you drive on rough roads you don't have to slow down, but you do steer more carefully, guiding your car to smoother surfaces. Chinese payment facilitator AsiaPay is welcoming China's recent regulation tightening as a move to help clean up the country's payments industry's fraud-infested reputation. AsiaPay is reading the new road sign as it zooms by, according to our interview with its CEO Joseph Chan, a key player in the massive payments market that is China.

How massive? In their 2015 report on global payments, Capgemini and the Royal Bank of Scotland said China's non-cash transaction volume growth in 2013 led the world's countries at 37 percent, with the region they call Emerging Asia (India, China, Hong Kong and other Asian countries) leading global regions with more than 21 percent growth. Alipay and WeChat are the dominant third party service providers in the online and mobile payments. ApplePay and SamsungPay have entered the market as well, though they use NFC rather than the QR code conduit favored by Alipay and WeChat.

When you drive on rough roads you don't have to slow down, but you do steer more carefully, guiding your car to smoother surfaces. Chinese payment facilitator AsiaPay is welcoming China's recent regulation tightening as a move to help clean up the country's payments industry's fraud-infested reputation. AsiaPay is reading the new road sign as it zooms by, according to our interview with its CEO Joseph Chan, a key player in the massive payments market that is China.

Hug a Payment Facilitator, Save A Tree

Payment facilitators are helping to save the planet. By enabling electronic and mobile payments for all sorts of markets – like lunch money and rent and race registrations-- that used checks and cash before, less paper is being used, and less paper needed means more trees left standing to produce more oxygen. That's not a stretch at all.

One such example of a new marketplace is Bill.com, which allows small- and medium-sized companies to electronify the entire accounts payable and accounts receivable process, chopping waiting times for both parties using it. And while Bill.com facilitates payments, it is not a payment facilitator, also not a stretch.

Payment facilitators are helping to save the planet.
By enabling electronic and mobile payments for all sorts of markets – like lunch money and rent and race registrations-- that used checks and cash before, less paper is being used, and less paper needed means more trees left standing to produce more oxygen. That's not a stretch at all.

Podcast: The Forming Of A PF Platform

The payment facilitator model is exploding because of the vast number of small to medium sized merchants who like their lives uncluttered by multiple partners trying to help them run their business, including those that enable them to accept electronic payments. They want the simplicity of valuable services as well as payment ability, and not from two vendors.

But becoming a payment facilitator is no picnic; who's there to help potential payment facilitators who are hesitant to take on the maze of underwriting, compliance, fraud risk, and monitoring despite the growing evidence that market share and revenue can be gained?

The payment facilitator model is exploding because of the vast number of small to medium sized merchants who like their lives uncluttered by multiple partners trying to help them run their business, including those that enable them to accept electronic payments. They want the simplicity of valuable services as well as payment ability, and not from two vendors.

The Payments Standard Bearers Are Waking Up To The Payment Facilitator Opportunity (And Threat)

There is growing realization among researchers that the payment facilitator model is a rocket ship, and that old models in the payments industry have slowed their rolls at the PFs' expense. Major players are now saying what we’ve been shouting from the rooftops for years.

In the past three years, I said: "We are seeing more ISOs looking to do frictionless on-boarding and move into aggregation. Support for the aggregation model among acquirers is also increasing."

There is growing realization among researchers that the payment facilitator model is a rocket ship, and that old models in the payments industry have slowed their rolls at the PFs' expense. Major players are now saying what we’ve been shouting from the rooftops for years.

Podcast: Vantiv’s Danner Calls Payfacs ‘Epitome of Tech Companies’

Chuck Danner, GM of Payfacs for processor Vantiv, admires not only the software expertise of payfacs but also their creative nature in finding new verticals to help with their value-adds and efficiencies. "We're reliant on these companies for new ideas," Danner said in this week's edition of the PaymentFacilitator.com podcast.

Danner said payfacs are ideal for emerging markets that were either less complicated, non-existent or not tech-enabled, such as healthcare, ride-sharing, crowd funding and vending machines. Because the payfac model is so young, the need and opportunities for payfacs are outpacing the supply. "Growth is phenomenal," Danner said, but closing that gap will take "maturity and time."

Chuck Danner, GM of Payfacs for processor Vantiv, admires not only the software expertise of payfacs but also their creative nature in finding new verticals to help with their value-adds and efficiencies. "We're reliant on these companies for new ideas," Danner said in this week's edition of the PaymentFacilitator.com podcast.

Kroger Details Its Fun-Filled Visa Negotiations

Have retailers suddenly started developing backbones, in terms of pushing back on payments companies? On Monday (June 27), Kroger sued Visa about how it was implementing EMV, in much the same way that Walmart and Home Depot have done. This follows Walmart kicking Visa out of Canada and a major German company rejecting PayPal after PayPal apologized and reinstated it. Did somebody spike the NRF water fountains with super-caffeine or something? Or have merchants decided that they can push back on payments giants with little risk of meaningful pain?

EMV rules seems to have been the PIN straw that broke the POS camel's back, as even Apple Pay has suffered performance degradations following EMV migrations. The big picture arguments about security—that it's blindingly obvious that PIN is far more secure than signature—are obscured by the reality that this is really a fight about interchange fees. And the EMV argument that the path to PIN must be glacially slow or else American consumers will freak out from the change, despite the fact that most are quite used to PINs from ATMs and debit cards, is frighteningly valid. And here it is in the land of EMV rules that grocery giant Kroger makes it stand.

Have retailers suddenly started developing backbones, in terms of pushing back on payments companies? On Monday (June 27), Kroger sued Visa about how it was implementing EMV, in much the same way that Walmart and Home Depot have done. This follows Walmart kicking Visa out of Canada and a major German company rejecting PayPal after PayPal apologized and reinstated it. Did somebody spike the NRF water fountains with super-caffeine or something? Or have merchants decided that they can push back on payments giants with little risk of meaningful pain?

Gaming Payments Gets Serious: Tencent Drops $8.6 Billion On Game Firm

Of all of the various payments hotspots that payment facilitators need to focus on, gaming—and all of its in-app potential—may be the one of the most lucrative. Witness Tencent Holdings Ltd., which this week confirmed plans to drop $8.6 billion to buy an 84 percent slice of the Finnish maker of the Clash Of Clans mobile game.

Games generate one payment for the initial purchase—which, for a popular game, is tantalizing enough on its own—and then a potentially unlimited number of follow-on purchases as players purchase new weapons or characters or cheats or various upgrades. Game companies are generally great at creating the games, but they need help facilitating effortless payments within those games. Enter PFs.

Of all of the various payments hotspots that payment facilitators need to focus on, gaming—and all of its in-app potential—may be the one of the most lucrative. Witness Tencent Holdings Ltd., which this week confirmed plans to drop $8.6 billion to buy an 84 percent slice of the Finnish maker of the Clash Of Clans mobile game.

Will Police Take Payments During Traffic Stops?

For the payments geeks among us, transaction processing can be arresting. But in a bizarre twist, some police are doing both: arresting and processing payments and doing them both in the middle of a traffic stop on the side of the road. Will the familiar flashing-red-light refrain soon be "License, registration and Visa card, please?" In Oklahoma City, the answer might be "yes."

This all comes from a bid request that started with the Oklahoma Department of Public Safety to a Fort Worth supplier named ERAD Group Inc., which specializes in payment offerings for law enforcement.

For the payments geeks among us, transaction processing can be arresting. But in a bizarre twist, some police are doing both: arresting and processing payments and doing them both in the middle of a traffic stop on the side of the road. Will the familiar flashing-red-light refrain soon be "License, registration and Visa card, please?" In Oklahoma City, the answer might be "yes."

How To Get Cracking On Your PayFac-ing

There are at least two great reasons to jump into the payment facilitator game-- increased revenues and market share—and many many tools to help. One of those tools is advice from the hard-won success achieved by those who have made the leap.

In a session on the ins and outs of starting a payfac at the second annual Payment Facilitator Day at Transact16 in April, Kevin Harris of RunSignUp said training people was more of a challenge than software concerns, and David Weiss of Yapstone shared the difficulties of international expansion. Nick Starai of gateway tech company NMI told the audience to concentrate on the business they know best rather than focus on technological bells and whistles. The highlights of the discussion fill this week's paymentfacilitator.com podcast, the next best thing to having been there.

There are at least two great reasons to jump into the payment facilitator game-- increased revenues and market share—and many many tools to help. One of those tools is advice from the hard-won success achieved by those who have made the leap.

Fraud And Compliance And Rules, Oh My!

The pain of keeping all the rules and regulations straight for a payment facilitator is only exceeded by the pain of not keeping them straight. A PF has to protect itself from merchant problems with underwriting and monitoring, while adhering to the mandates from card brands and acquirers. It's a lot now, but as everyone knows, there's more coming.

As heard in this week's edition of the PaymentFacilitator.com podcast, the best PFs can do to mitigate excessive regulation from without is to do more within, said Rich Consulting president Deana Rich, moderator of the session Emerging Threats Cage Match: Compliance v. Fraud at the second annual Payment Facilitator Day at Transact 16 in April.

The pain of keeping all the rules and regulations straight for a payment facilitator is only exceeded by the pain of not keeping them straight.

A PF has to protect itself from merchant problems with underwriting and monitoring, while adhering to the mandates from card brands and acquirers. It's a lot now, but as everyone knows, there's more coming.

NRF Mounts An Impressive Takedown Of PCI

The National Retail Federation (NRF) has never been a huge fan of the PCI Security Council. But in a detailed note sent to the U.S. Federal Trade Commission (FTC) late last month, NRF's lawyers crafted an impressive takedown of PCI, arguing that PCI represents a monopoly-like attempt by the card brands to control retailers.

The trigger for the FTC letter appears to be concerns that the FTC might incorporate PCI compliance with recommendations it is preparing—a move that would solidify and increase PCI's leverage and power. This is one of these arguments that is best articulated in the abstract. At the legal abstract hypothetical level, NRF makes an impressive-sounding case that PCI is indeed a powerplay by the cardbrands.

The National Retail Federation (NRF) has never been a huge fan of the PCI Security Council. But in a detailed note sent to the U.S. Federal Trade Commission (FTC) late last month, NRF's lawyers crafted an impressive takedown of PCI, arguing that PCI represents a monopoly-like attempt by the card brands to control retailers.

PF Day 16: Value Adds And New Verticals Are The Tickets To Vast Opportunities

One of the six sessions at last month’s 2nd Annual Payment Facilitator Day at the ETA TRANSACT 2016 in Las Vegas was titled “New Verticals in Payments: Why The PF Model Makes It Happen,” and featured Double Diamond Group president Todd Ablowitz and executives who have successfully added payment facilitating to their toolboxes.

As heard on this week’s PaymentFacilitator.com podcast, Ablowitz provided eye-popping growth numbers and made it clear just how many software as a service vendors could benefit from becoming a payment facilitator: nearly 13,000 that could add not only value to merchants but boost their margins.

One of the six sessions at last month’s 2nd Annual Payment Facilitator Day at the ETA TRANSACT 2016 in Las Vegas was titled “New Verticals in Payments: Why The PF Model Makes It Happen,” and featured Double Diamond Group president Todd Ablowitz and executives who have successfully added payment facilitating to their toolboxes.

New Treasury Rules Mean Huge PF Changes

A new set of rules announced by the U.S. Treasury Department in May will force payment facilitators to reveal not only who owns a company, but also whoever controls and/or manages it. This will mean a lot more information will have to be revealed about charities, non-profits and other PF-friendly businesses. The new rules requires that each owner who has more than 25 percent of ownership must be identified, along with anyone who controls or manages the operations, whether or not they are an owner. On the plus side, these rules are not retroactive and won't even start kicking in until July 11, 2016, with required implementation not happening until May 11, 2018.

What are the key PF implications? "PFs that deal in small mom and pops will have no change when there is one owner and she/he is in control," said Deana Rich, head of Rich Consulting. "PFs will have a big change if there are two owners—such as a husband and wife each with 50 percent. In the past, only one was necessary. Now it will be two. But there's an added string. If their kid runs the business, now (the son/daughter) will be required to be IDed as well."

A new set of rules announced by the U.S. Treasury Department in May will force payment facilitators to reveal not only who owns a company, but also whoever controls and/or manages it. This will mean a lot more information will have to be revealed about charities, non-profits and other PF-friendly businesses.

A Scary Peek Into Square’s New Privacy Policy

Most privacy policies and terms of service—especially with payments companies—are indeed about privacy. The company's privacy, meaning that they want to keep their customers from knowing it to the extent possible. To that end, most are filled with legalese, are overly long and used the smallest and most difficult to read font as possible.

Square's may be no different in that regard, but on Tuesday (May 31), they announced a slightly different way to deliver it. It was a slight nod to transparency by making both the privacy policy and its terms of service somewhat shorter. No, it didn't surrender any protections. But it created several different versions of each document, crafted for its different kinds of customers. The theory is, in effect, why burden consumers with rules that only apply to merchants? So we decided to dig deep into what these new privacy policies said, Buyer beware.

Most privacy policies and terms of service—especially with payments companies—are indeed about privacy. The company's privacy, meaning that they want to keep their customers from knowing it to the extent possible. To that end, most are filled with legalese, are overly long and used the smallest and most difficult to read font as possible.

Event-Booker Placefull Converts To PF, Creates A Sizable Profit Event

One of the key advantages to being a payment facilitator is that it is the desired brand of the merchant that appears on the customer's statement. That certainly delivers the expected marketing boost (brand reinforcement) for the merchant, but event-booking PF Placefull is fond of that brand appearance for a very different reason: far fewer chargebacks.

"We have always wanted the merchant brand to have the most presence. One of the things we didn't like with a Paypal or Stripe experience—other than it's not a pretty-looking site—is that we never wanted to have a broken experience," said Placefull CEO Ryan Hamlin. "Now it’s ABC Bowling that will appear on the bill statement. The amount of disputes and, frankly, fraud was much higher before because people would see something on their statement and would call and dispute it."

One of the key advantages to being a payment facilitator is that it is the desired brand of the merchant that appears on the customer's statement. That certainly delivers the expected marketing boost (brand reinforcement) for the merchant, but event-booking PF Placefull is fond of that brand appearance for a very different reason: far fewer chargebacks.

How Flexible Is The PF Model?

The strength of any payment model is not merely how well it performs for merchants, but also how elastic it is in terms of being relevant to many kinds of companies and geographies. That is the topic for this week's PaymentFacilitator.com podcast, with guest Todd Ablowitz, president of Double Diamond Group.

Ablowitz pointed to a recently-profiled company called RunSignUp.com as a good example of how flexible the PF model can be. The PF model lets merchants and software companies seamlessly integrate payments "without this artificial wall between the payment gateway and the merchant account," Ablowitz said. "This removes many of the barriers. Banks move slowly and they have a lot of bureaucracy."

The strength of any payment model is not merely how well it performs for merchants, but also how elastic it is in terms of being relevant to many kinds of companies and geographies. That is the topic for this week's PaymentFacilitator.com podcast, with guest Todd Ablowitz, president of Double Diamond Group.

Visa: Huge Changes For Payments In IoT, Where Context Is King

The imminent Internet of Things (IoT) world—where every watch, car, thermostat, refrigerator, shopping cart and television talk with each other, and everything else—could have a huge impact on PF payments. But, as Jonathan Vaux, Visa's innovation director, recently said, it's really all about context.

Current payment methods (payment cards, whether still in plastic or in a mobile device, cash and even checks) are all about paying for anything anywhere. That's certainly fine and will always be needed—Vaux goes out of his way to defend cash, which he correctly argues isn't going away anytime soon—but there is a huge allure for shoppers to make purchases they are in-context.

The imminent Internet of Things (IoT) world—where every watch, car, thermostat, refrigerator, shopping cart and television talk with each other, and everything else—could have a huge impact on PF payments. But, as Jonathan Vaux, Visa's innovation director, recently said, it's really all about context.

PF Magic: Square Is $150m In The Red, But Still Worth Billions

If you’re still not convinced of the power of the PF model, prepare to be so. Square, perhaps the leading payment facilitator, with 2 million active customers, has finally made it’s financials public via its S-1 filing, and its losses are staggering.

How could this company have attracted private valuations in excess of US$6 billion? Simple: by being a great company with a great plan in an emerging market. Despite being on target to accumulate half a billion in losses in a four-year period, it is a robust business, with solid management on the brink of profitability. Its losses do not result from negative business factors, but rather because management is so excited by its opportunities that it is taking a Amazon-esque approach, forgoing short-term profits to invest in its many future opportunities. One should view the magnitude of the losses not as a negative, but rather as indicative of the magnitude of the opportunity.

If you’re still not convinced of the power of the PF model, prepare to be so. Square, perhaps the leading payment facilitator, with 2 million active customers, has finally made it’s financials public via its S-1 filing, and its losses are staggering.

Welcome To Your New Home For Payment Facilitator News You Can Use

Welcome to PaymentFacilitator.com, your home for an independent and analytical take on the payments issues of concern for the PF community. For our take on the major changes impacting payment facilitators and why this editorial community is needed right now, please drop by our About Us page.

It seems, though, this Letter From The Editor is best used to not promise what we'll deliver in the near future, but to tell you what we are delivering to you right now and why those pieces have the information that you're simply not going to find elsewhere today, especially from the various payments media.

Welcome to PaymentFacilitator.com, your home for an independent and analytical take on the payments issues of concern for the PF community. For our take on the major changes impacting payment facilitators and why this editorial community is needed right now, please drop by our About Us page.

It seems, though, this Letter From The Editor is best used to not promise what we'll deliver in the near future, but to tell you what we are delivering to you right now and why those pieces have the information that you're simply not going to find elsewhere today, especially from the various payments media.