Ever since Apple demonstrated it was possible to earn tens of billions of dollars of free money by having an app store, POS companies around the globe have followed suit. While we’ve long pointed out the differences in consumer and merchant behavior – and why POS app stores significantly underperform – it hasn’t kept POS companies from fixating on the potential gold mine with a drooling gaze.
But a software company with a different perspective shines a new light on this app store conundrum. From their perspective, when used properly an app store can keep a merchant in an existing POS system much longer, preventing churn and keeping the merchant happier. Their thesis is one that recognizes the limited development focus of the POS provider
That company is AEVI, a European startup that’s gone on to raise over 30M Euros. AEVI’s sweet spot is proving POS app stores as-a-service for payments providers. Why payments providers? Eddie Johnson, AEVI’s senior product manager, joined us to discuss it further.
“Payments processors are increasingly offering POS solutions to provide more value to their merchants and reduce churn in their processing businesses,” said Eddie. This should come as no surprise to our readers. “We’ve noticed that there’s often premature churn in a payment processor’s POS offering because the POS solution doesn’t have the features to support the merchant as they grow; our vision is to move away from a POS-centric thinking and instead think of it as the Point of Interaction”
Given that processors are not software companies this sounds very reasonable to us. AEVI’s value proposition to these processors boils down to something pretty simple:
Merchants are leaving your POS for more mature POS products as they get larger. However, these are the merchants that are succeeding and you should want to keep them as customers. Therefore AEVI can provide you with an app store to extend the feature functionality of your POS.
How does an acquirer explore the app store-as-a-service model AEVI lends?
Firstly, know that AEVI targets acquirers that use Android devices for their POS systems. “AEVI can work with any Android device, from SmartPOS to mPOS with a tablet, or even unattended solutions” says Eddie. “We can work with any POS software that has developed for Android on the app side as well.”
AEVI then works with the acquiring partner to get the app store set up. “Our partners pick and choose the right app solution for their merchant base. We have a more consultative approach and an entire app portfolio team dedicated to working with acquirers and app developers” emphasizes Eddie. AEVI’s AppFlow SDK ensures that whatever apps the acquirer chooses work smoothly with their Android POS systems.
If there are any payments troubles AEVI can help acquirers centralize their payment infrastructure through their gateway, though it’s not mandatory to use their payment solutions. The benefit in using AEVI’s gateway is that it provides one single integration to deliver the same consumer payment experience for their app store.
Fundamentally AEVI is trying to move acquirers away from (or beyond) selling traditional payments and learning how to sell on value. “AEVI is not a ‘one size fits it all approach’. AEVI supports the acquirer in segmenting their merchant base, identifying their respective pain points, finding relevant solutions and facilitating training for how to sell and support them.”
Being successful obviously requires a new way of thinking, which runs into the old dog, new trick paradox AEVI needs to solve. We think there are a few things that could derail some of their progress if we’re being honest
- A payments company not aligning their priorities at the top, leaving some sales reps learning AEVI but the majority of the company unaware of the initiatives and thus failing to drive material change
- A payments company believing they will build software competitive to AEVI, even though they’re culturally not a software shop
- Merchants that outgrow the functionality of the processor’s core POS; in that instance no app store will prevent the merchant from seeking a POS system substantially more mature than the one offered by the payments company
AEVI’s solution seems to give willing and self-aware processors a weapon to use in the battle for SMB. How many will pick it up is another question altogether. To learn more about AEVI you can reach them here, or on Twitter @aevidomore.
