Avoid some common pitfalls with these best practices
September 1st, 2013
Mobile technology is revolutionizing direct selling. By transforming smartphones and tablets into point of sale terminals, direct sellers are creating seamless shopping experiences for their customers and quickly achieving measurable ROI. With today’s technological advances, direct sellers are putting their product catalogs onto apps, checking real-time inventory levels at the point of sale and taking payments in the field.
Direct selling organizations and their independent sales consultants are rapidly adopting mobile solutions to gain a competitive edge in the marketplace. Consider this: The number of mobile terminals grew to 9.5 million globally in 2012, more than double the number in use the previous year. And that explosive growth isn’t expected to slow down anytime soon.
While most One-to-One Selling and Party Plan companies understand the need to go mobile, many are struggling to keep up with the evolving technology and industry regulations. Following some best practices, direct selling organizations can stay ahead of the curve and streamline implementation of their mPOS solution.
Ensure secure transactions
Security is the most important consideration when it comes to mobile POS. If you compromise security, you compromise everything – your reputation, your customers and your future.
Security is the key driver of the Payment Card Industry (PCI) requirements. Created to reduce credit card fraud by increasing controls around cardholder data, the PCI Data Security Standard outlines information security requirements for organizations that handle cardholder information for the major credit, debit, prepaid, e-purse, ATM and POS cards.
PCI compliance is a challenge for direct selling organizations. Consider the typical Party Plan event: The company gathers consumer information on paper order forms, including credit card data, for post-event entry into an ecommerce site. By PCI standards, as soon as you write down the credit card number, you’re not compliant. (The merchant, software, contractors – anyone and anything – that touches consumer information and processes and stores payments must comply with PCI.)
By implementing an mPOS solution that allows a mobile card reader and a smartphone to take consumer payments at the time of an event, direct selling organizations are able to comply with that scope of PCI requirements.
Buyer, beware: Ensure your mPOS platform enables fully PCI-compliant, secure transactions with end-to-end encryption.
PCI compliance isn’t a one-time task; it’s an ongoing process. Your solution provider should meet all PCI standards today and be working to stay ahead of anticipated changes and future requirements.
Minimizing security risks and improving consumer confidence are always good for business!
Enhance your brand
Mind share equals market share in today’s brand-driven economy. Your mPOS solution should establish credibility with customers while reinforcing and extending your brand.
Don’t use a generic app or reader. Instead, differentiate yourself from competitors and drive brand loyalty with a customized mPOS solution that showcases your brand. This is critical for large and small businesses alike.
Find a partner that can white label the entire solution, including the card reader, the payment app, online management tools and even customer receipts. The idea is to seamlessly integrate the look and feel of your brand from start to finish during mcommerce transactions.
There’s a bonus, too: In addition to building credibility with existing and potential customers, increasing brand awareness improves recruitment and retention of independent sales consultants and helps grow the distribution base.
Boost profits and save costs
With the right mPOS solution, direct sellers can achieve huge costs savings and grow the top and bottom lines.
Direct selling businesses typically pay ecommerce interchange rates on credit card transactions. With an mPOS solution, direct sellers can qualify for card-present transaction rates, saving them up to 85 basis points. On an average ticket of $100, that’s nearly a 1% savings on every transaction processed.
Saying good-bye to card-not-present rates is just the beginning. An mPOS solution also reduces the volume of declined cards, chargebacks and fraud.
Remember that party plan event I mentioned earlier? With an mPOS platform implemented, direct sellers virtually eliminate lost sales due to cards declined for insufficient funds or other reasons. Instead, it’s as easy as asking for an alternate form of payment on the spot. There’s no after-the-fact hassle trying to hunt down someone to finalize a purchase. (There’s also no more transposed credit card numbers because the handwritten form is eliminated from the payment process.) Less declines means more ability to grow the top line.
At that same party, there’s also going to be less chargebacks with the mPOS solution in the field. Plus, it’s not just the individual chargeback fee being saved; there’s also the time, labor and other costs associated with processing the chargeback. Eliminating those costs gives businesses more room to also grow the bottom line.
A word of caution: Don’t try to cut costs by sacrificing the critical functionality that could actually save you time and money in the long run. For example, be sure any solution provider you choose supports both electronic signature and e-mail receipt capabilities. Both help to reduce fraud and can subsequently produce significant cost savings of the right kind.
Wow consumers and consultants
An mPOS solution benefits two of the most valuable assets of all direct selling organizations – your customers and your consultants. Automating purchases and the payment process improves the sales experience for both. In addition to eliminating paper order forms and the lines associated with them, an mPOS solution creates a more personalized shopping experience and enables the immediate purchases that drive impulse buying. Also, with the ability to check inventory in real-time at the point of sale, sales consultants are able to make product and upsell recommendations.
Regardless of their core businesses, many direct selling organizations want to be known as technology companies, as this helps recruit and retain independent sales consultants. With the explosion of technology, the consultant base is already familiar with and using smartphones and tablets. In fact, their use is so widespread that direct selling organizations don’t have to provide consultants with the hardware because they already have their own. That’s the good news.
The not-so-great news is that can be challenging to find a partner that can support all the hardware and accompanying operating systems. But you can – and must –find a solution provider with large compatibility, including supporting both iOS and Android. (There are already hundreds of models of Android phones on the market and new ones are being released every day!) Don’t forget about BlackBerry or Windows, either. With the huge investment Microsoft is making in Windows Phones, it’s prudent to find a provider that supports them now or will be able to soon.
Ultimately, choose a solution provider with a long-term technical product roadmap. The roadmap should cover about 18 months. A three-month roadmap is too shortsighted; choose a partner that can support you today and well into the future.
Improve operational efficiencies
A majority of direct selling companies have international operations around the globe. While U.S. companies are worrying about implementation of the EMV global payment standard next year, international companies aren’t because they’ve already been dealing with EMV as part of their global operations.
But EMV is just one reason your solution provider should have substantial international experience. There are a lot of new players jumping into the payment industry. Look for an established partner with global payment industry experience. Avoid the newbies, perform due diligence and stick with an experienced vendor to keep operations on track and improve efficiencies.
Along those lines, to ensure quick and easy integration with back end systems, choose a solution provider that is processor agnostic, so you don’t have to change your merchant processing relationship. Some vendors are bank specific and make their clients convert. To avoid the operational and contractual pain associated with changing, find a vendor that supports all processors.
Similarly, find a solution provider that supports both manual-select and geo-tagged tax capabilities. Geo-tagged capabilities ensure the proper amount of tax is charged based on the location of the sale, relieving consultants of the burden of trying to figure it out.
Additionally, merchants with the need to perform recurring billing and identify repeat customers should implement an mPOS solution that includes tokenization. This functionality allows the merchant to store a customer’s encrypted credit card information on the solution provider’s PCI-compliant server at the time of the transaction. The merchant can retrieve the encrypted data later via a simple web service call. Tokenization provides a secure way to perform recurring billing and identify repeat customers, while also eliminating the time and labor of entering duplicate data for subsequent transactions.
Choose an experienced provider
By finding an established partner with global experience to ensure compliance with security requirements, payment standards and other guidelines, direct sellers are able to take full advantage of the benefits of mPOS.
Finally, it’s imperative to work with a solution provider that understands the unique challenges of the direct selling industry. Choose a partner with direct selling clients already using their mPOS solution. There’s no substitute for that valuable knowledge and experience.