POSPay expands payment control for vendors

Ecentric has launched a payment enablement platform, POSPay, that allows South Africa’s till vendors to offer branded payment services using the fintech’s backend infrastructure.

Through POSPay, till vendors can integrate into Ecentric’s acquiring and processing infrastructure and offer card payment services to merchants under their own brand. The platform runs on certified terminals and connects to multiple acquiring banks through a single back-end relationship with Ecentric.

Till vendors can join the POSPay programme after completing Ecentric’s vetting process, which assesses factors including financial capability, technical maturity, merchant base size, and sales capacity. Vendors then sign a commercial agreement with Ecentric, which manages host-to-host relationships with participating acquiring banks. Merchant verification and approval remain the responsibility of the acquiring bank under South African financial regulations.

Ecentric provides the processing infrastructure, certified terminals, reporting, and second-level support, while till vendors offer the payment service under their own brand and logo.

“The banks can’t do much without an integrated till vendor, and the till vendors need a payment partner they can trust not to compete with them,” says Don Lange, Ecentric Payment Systems partner manager. “POSPay was built to keep those two connected with Ecentric providing the technology, the processing infrastructure, the commercial architecture and the distribution agency work.”

Till vendors can set merchant fees above the baseline fees provided by Ecentric and can earn commission from participating acquiring banks for merchants added to the programme. Under the model, till vendors manage the payment service under their own brand.

What changes for the merchant

According to Ecentric, SA’s independent mid-tier merchant has long been subject to the competing priorities of payment providers.

The company says: “Switching acquiring banks has meant replacing terminals and renegotiating integrations, which has invariably disrupted operations. It has not been possible for merchants to be bank agnostic, a reasonable expectation for any business, if they are below the top commercial tier.

“POSPay changes this by allowing merchants to switch acquiring banks without changing their till software or disrupting their payment integration. Where the till vendor sources and provides the hardware, merchants can move between acquirers with minimal disruption and the underlying bank relationship, and merchant IDs are updated in the backend while the user experience remains unchanged. In scenarios where the acquiring bank provides the terminal directly, switching acquirers is a more involved process.”

What changes for the bank

According to Ecentric, leading financial institutions face structural tension in the mid-tier merchant market.

“Their acquiring divisions have ambitious revenue targets, but sales and merchant services teams can’t reach independent merchants at the scale required to achieve those targets. Direct-to-market fintech models have taken a percentage of market share while internal direct-to-merchant programmes have had mixed results.

“Ecentric brings a portfolio of vetted and technically capable POS vendors, each carrying a significant number of merchants, into a single programme that plugs directly into the bank’s acquiring infrastructure. Each till vendor becomes a trusted distribution channel, giving banks a faster route to market in the mid-tier merchant segment than building direct-to-vendor programmes internally. Ecentric’s established host-to-host connections with acquiring banks mean the technical integration is already in place and banks benefit from the speed without bearing the cost of building and maintaining channel relationships themselves.”

Experience

Ecentric has been in advanced engagement with till vendors for two years before launching POSPay. The programme is designed to ensure the network is trusted by banks on the other side of the arrangement.

The technology infrastructure across processing, certification and reporting, is Ecentric’s existing capability, extended into a new commercial model. POSPay adds a relationship architecture across agreements, channel marketing, campaign templates and content designed to support till vendors activate their merchant base.

Ecentric provides the following key insights:

• Fifteen till vendors engaged with Ecentric at launch.
• Four banks acquiring relationships in place or in progress at launch.
• One integration as till vendors move from managing multiple payment provider relationships to a single POSPay integration.
• Two years Ecentric development time spent developing and validating POSPay within the market before launch.