Everyone who reads this periodical knows that Global Payments bows under the King of Fake Fees, Jeff Sloan.
His organization loves plowing bogus fees unto their merchants.
Loves it.
There’s probably a celebratory orgy every time a merchant eats a fee and doesn’t notice.
(An orgy meme was too much, even for this blog.)
Which makes one wonder if Xenial’s new integration fees are legitimate or just Jeff Sloan Jeff Sloaning.
Background: Heartland Payments acquired a bunch of POS assets, and Global Payments acquired Heartland. One of these POS assets was Xpient, a legacy enterprise QSR POS, which kinda, sorta morphed in Xenial, a cloud replacement (that’s gone terribly by every indicator we can find).
In late August Xenial started sending notices to software companies that had integrations into their POS software:
What we loved about this note was how Global decided to chunk the fee into a 6-month term so the recipient wouldn’t realize that Global was asking for $100,000 annually from the integration partner.
Genius fee: looks like someone’s getting promoted!
We don’t know if every single partner is facing a $100,000 annual integration toll, or if this is just for larger software companies.
We have a few thoughts on the matter.
First, like we laid out with Toast, these integration fees just mean it’s much more expensive for the merchant to use Xenial POS.
Nobody makes any money selling to restaurants.
Terrible customers, long sales cycles, super cheap, etc etc.
The only parties that have made any meaningful (i.e. venture capital acceptable) returns are 1) payments companies which hide their fees, and 2) companies that lever the consumer against the restaurant and take a cut of the whole transaction.
Everyone else runs a loser business by institutional capital’s definitions.
So these tolls are really just punitive for the end Xenial customer, who’s going to see the toll passed on from their third party software provider who can’t afford to eat the cost of integration (not applicable to companies that fall in the two aforementioned categories, however).
Second, there are some legitimate reasons for partner fees, but mostly it means you run an incompetent partner program. That’s particularly true if parters are writing to YOUR API.
Let’s dive in.
If you have a well documented API, the partner does the work of writing to you. Make some major changes? Send out a partner email with the updates, or just version your freggin API.
So why does this cost $100,000 a year to support?
If a partner needs a lot of hands-on support – phone calls, emails, etc – then sure, it makes sense to charge a reasonable amount of money. Payments often falls into this category, where merchants all want to bring their own processors and then the POS has to support the backlash when the merchants demand support for new features of their cousin’s ISO only to blame the POS when they find out that their business actually bought their cousin’s new boat with their payments residuals.
Not making this up.
Verdict?
$100,000 is so steep it’s almost hard to believe it’s real. Like maybe Xenial wants its partners to leave so it can shit the bed with inferior versions of competitive product.
This feels like A) incompetence in how to run a partner program, or B) avarice at the top levels.
Given that the King of Fake Fees is at the helm you won’t catch us betting against either or both options being true.
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