Let’s talk about what is actually happening to this industry because the polite version of this conversation is not serving anyone.
Hedge funds discovered POS software. Wall Street money started flowing into point of sale development a few years ago and the result is exactly what you would expect when people who have never installed a system, trained a staff member, or taken a support call at 11pm decide they understand the channel better than the channel does.
Wide. Shallow. Underfunded where it counts. Overfunded where it looks good in a pitch deck.
The model is straightforward and it is worth naming plainly. Raise enough capital to undercut the dealer channel on price, sign merchants directly, skip the VAR and the installer, and figure out support and retention later. The merchants who get caught in this are the ones calling a help desk staffed by people reading from a script while their restaurant is full and their system is down.
But the deeper damage is happening upstream.
ISVs, the independent software vendors who built the platforms many of us have spent careers deploying and supporting, are being acquired at a pace that would have been unimaginable five years ago. Payment processors are buying them up. Private equity is buying the processors. And every time one of those acquisitions closes, a little more of the genuine software development culture that made those platforms worth selling gets absorbed into a roadmap driven by margin optimization rather than operator need.
The result is a payments and POS landscape that is going into a blender. The ISO channel, which built its business on the merchant relationship, is watching that relationship get disintermediated by platforms that bundle processing into the software and cut out the middleman by design. If the software owns the merchant and the processor owns the software, where exactly does the ISO fit?
The same question applies to dealers and VARs. If the hedge fund backed POS company is going direct, doing their own installations through third party gig labor, and offering a 1-800 number as their service model, what is the value proposition of the channel partner?
Here is what I think and I am curious whether this group agrees.
The answer is not to pretend this is not happening. It is to be more valuable than the model that is trying to replace you. The dealer who knows their market, builds real relationships, provides genuine local support, and can offer a merchant something no national platform can, which is a real person who shows up, is not obsolete. The ISO who becomes a true technology advisor rather than a rate shopper is not obsolete. The VAR who understands the full stack and can integrate, support, and scale a merchant’s technology is not obsolete.
But the ones running the same playbook they ran in 2015 while the landscape reshapes around them are in real trouble and the timeline is shorter than most people in this channel want to admit.
This industry is dicey right now. The people in this group are the ones who actually understand why. I want to hear what you are seeing on the ground.
Where are you feeling the pressure most? And what are you doing about it?
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