Beanstream’s U.S. Venture Targets ISVs As It Taps Parent Bambora’s Processing Reach

Canadian payment processor Beanstream says its U.S. foray is hoping to tap into its parent company’s international reach as Beanstream USA targets software developers and integrators.

Beanstream’s U.S. effort—announced earlier this month—is meant to get a piece of the independent software vendor and value-added reseller market that so many payments companies covet. Internationally, the software-as-a-service market is valued at $23.88 billion according to a Transparency Market Research report.

Beanstream, following Sweden-based Bambora Group’s purchase of the company in 2015 from Digital River Inc., operates as an independent sales organization, payment facilitator, and payment gateway. These capabilities, combined with Bambora’s global reach, has the potential to entice developers to use Beanstream, Craig Thomson, president, tells Digital Transactions News.

One reason for that is software developers are trying to consolidate their payment processing partners, a move driven in part by the adoption of EMV chip cards in the United States and in part by having to maintain compliance with PCI Security Standards Council requirements, Thomson says. “It used to be a feather in the cap to have 100 relationships,” Thomson says. “Now, we’re seeing even very large ISVs are looking to shrink that number down.”

Beanstream, he says, has connections to multiple processors and access to acquiring platforms in Europe, Australia, and New Zealand. Beanstream can provide in-country payment services, something that merchants like so they can accept local payment methods and settle their accounts in their currencies, he says.

“That’s important for ISVs because the customers they’re working with need to get paid,” Thomson says. Having in-country service, rather than moving money across borders, is less expensive, too, he says. Beanstream also offers cash management services, 24-hour live customer support, and application programming interface software and software development kits.

With that playbook in hand, Beanstream’s U.S. tactic will be to identify some key verticals and rely on referrals from banks and other ISOs, as well as direct sales to software developers, Thomson says, adding that the company does not sell directly to merchants.

Beanstream is just one payment company targeting the ISV and VAR market because of its growth and potential to grow. “The channel is growing at a rate that is approximately [three times] the growth rate of acquiring as a whole,” Rick Oglesby, president of AZ Payments Group LLC and a senior analyst for Centennial, Colo.-based Double Diamond Payments Research, told Digital Transactions News earlier this month. “It’s been a select number of companies that has really focused on the channel, but those that have really focused there have achieved much stronger than average growth. The fact that the market isn’t fully penetrated is what makes the opportunity so big.”

Payments companies like the market, too, because merchants that use ISVs and VARs tend to stick with the software vendor longer—because they get valuable business services along with payments processing—than with vendors that just provide payments, says Thomson. “By acquiring ISV relationships [payment companies] wind up getting longer-term clients, less churn, less attrition in the portfolio, and if you can build in extra value, these merchants can be more profitable as well,” he says.