Fiserv, NCR Call It Quits?

A long time ago NCR Aloha would allow processors to integrate into their POS software through their EDC, or electronic data capture service, as a defacto gateway.

As NCR grew smarter they struck preferred payment partnerships (Worldpay) and sought to capitalize on their distribution with aggressive revenue shares.

Eventually NCR got tired of losing to POS upstarts and decided payments was the culprit (surely not the overpaid management making terrible decisions), so they acquired JetPay to offer their own subpar payments offering (at least it was consistent with everything else NCR offered).

Depending who you ask, JetPay still doesn’t work.

Reconciliation issues.

Double billings.

It’s got serious problems.

But don’t let execution get in the way of a good story.

What’s clear to anyone who’s been in the POS markets over the past decade is that NCR is a dead company.

Sure, it still moves around and has quarterly earnings calls, but zombies shuffle around in search of brains, too.

Desperate for any host to latch on to, it would make sense that NCR would use whatever contraption it could find for just a glimmer of vivacity.

Any why not start with stripping away payment options from your customers?

Forcing JetPay on merchants would guarantee NCR more revenue.

At least in the short term.

But is this a good bet?

We can see legitimate reasons why software companies would want to winnow the list of integrated payment providers.

Providers require work (ie cost) to support: provider makes a change, will you spend engineering time to update the features?

Some providers totally screw the merchant. The merchant gets pissed, calls on the software provider, and the software provider gets blamed.

This is no bueno.

Sometimes it does make sense to chop off a number of parasitic providers so you can focus on your company and the merchants you support.

In any case, the below notice is very, very interesting:

Fiserv EDC Notice

We have received information that Fiserv (formerly First Data) appears to have made a business decision to no longer issue new MIDs for customers on Aloha EDC. Fiserv has taken the stance that all new Fiserv MIDs should be EMV-gateway only. This impacts not only Fiserv direct merchants, but also those using individual Fiserv agents, referral partners, and ISOs.

When questioned about this, it’s important to explain to customers, that this is a business decision on the part of Fiserv. NCR still supports EDC… to the extent that we now offer NCR Payments on the EDC platform. Let’s keep in mind that this represents an opportunity. Channel Partners have had success closing a couple NPP deals for this very reason. Existing customers using Fiserv, or Fiserv ISO’s that are opening new locations, and have been denied EDC MIDs. I think the response should be something along the lines of…

“We understand that Fiserv has made a business decision to no longer provide customers the ability to process on Aloha EDC and that this decision has trickled down to agents and ISO’s that use that same Fiserv processing platform. NCR supports Aloha EDC, and now offers customers the ability to process through EDC on our processing platform. If you are encountering this, our suggestion would be to provide us with a current processing statement… we will work to match your current rates, offer you no-cost contactless payment options, and provide you with an Aloha EDC VAR sheet so you can continue to process the same way you are processing today with no cost to convert”

Internal NCR communications

NCR appears to say that Fiserv is parting ways with NCR.

This is very odd.

Legacy processors like Fiserv have no real organic growth and are ceding serious market share to software companies and newer processors like Adyen and Stripe. That they would quit supporting an integration to NCR strike us as inconsistent.

BUT.

NCR’s EDC only supported card swipes, not EMV transactions.

Maybe Fiserv grew tired of chargebacks from swiped cards and is now requiring that all Aloha merchants come through an EMV-compliant gateway, which EDC is not.

The problem, as far as we’re aware, is that NCR’s Connected Payments service is the only NCR gateway that supports EMV.

And it doesn’t work according to half the people we talk with.

Either way this is bad news for NCR.

The way we read it NCR is either secretly parting ways with Fiserv and forcing merchants to use Connected Payments (+ JetPay for processing) or Fiserv is tired of NCR chargebacks and forcing their NCR merchants to use Connected Payments… which will result in only further merchant dissatisfaction and hasten merchant migration away from NCR’s POS assets.

Winner: everybody but NCR.

Sure hope a potential buyer knows what they hell they’re getting themselves into with NCR.