Sophisticated, Hyperspecialized and Cloud-Based: How Point of Sales are Addressing Specific Merchant Verticals – and Winning

Sophisticated, Hyperspecialized and Cloud-Based: How Point of Sales are Addressing Specific Merchant Verticals – and Winning

Sophisticated, Hyperspecialized and Cloud-Based: How Point of Sales are Addressing Specific Merchant Verticals – and Winning

Charles Keenan

Charles Keenan

Charles Keenan has written about payments since joining the American Banker as a staff reporter in 1997, a time when automated teller machines were appearing just about everywhere but people's living rooms thanks to the relaxation of surcharging rules.

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WebPT, a software company that serves physical rehabilitation clinics, offers plenty of ways to help its clients run their businesses. Of course, you can accept payments. But there is electronic records management. There's scheduling and billing. Analytics help physical therapists identify performance trends at the clinician, clinic and company levels. Practices can also use the platform to make the insurance claims more efficient.

The attractive features of the cloud — processing power, centralization and inexpensive hosting costs — allows WebPT to make changes and additions to its platform much easier than older server-based systems. For instance, the company is working to add more analytics features to help therapists predict how many visits a patient will need to reach a desired outcome, along with marketing automation that helps practitioners find their best sources of return on investment (ROI).

All of these services have helped WebPT amass a market share of about 40 percent of all rehabilitation specialists in the United States over the last decade, in a vertical that didn't really exist beforehand, notes Heidi Jannenga, president and cofounder of Phoenix-based WebPT.

"Players like us, we have been able to innovate in these markets," Jannenga says. "We started web-based, so we have a more agile process."

WebPT serves as a good example of how successful cloud providers that serve specific merchant verticals aren't resting on their laurels. They're aiming to become all-in-one shops, streamlining the process for customers, and creating appeal through the simplicity of one vendor. Having created entirely new merchant verticals over the last decade or so, they continue to add more sophisticated ways to help bolster the services they already have.

It also serves as a warning flare to any software provider: software as a service (SaaS) is really just a start, and the real competition will lie in the areas where they can continue to add value to a merchant's business.

"Software as a service is great, but there is a finite opportunity to it," says Rick Oglesby, founder and president of AZ Payments Group, a consultancy. "The biggest thing is really the all-in-one package, of everything being all pulled together."

SaaS: today's table stakes

To be sure, SaaS has helped create entirely new merchant segments. For example, physical therapy practices instead of medical practices and restaurant delivery services versus just restaurants. SaaS is continually giving rise to new niches, such as the market for cannabis, which is now legalized to varying degrees in many states. 

Yet SaaS won't be enough to keep clients. For example, with cannabis, even though the federal government has yet to legalize it, there's already a crowded field of software providers, including WebJoint, GreenBits, Adilas, Cova, MMJ Menu and MJ Freeway.

Specialized Point of Sales: Cloud POS providers are building solutions for even more specific merchant verticals. Physical therapy, Hotels and Fitness is shown in clouds around the text.

For these purveyors — and in any vertical — bundling and innovating will be the key to their survival. In the case of WebJoint, it has first focused on serving retailers, helping them create online stores, manage inventory, match orders with drivers, collect taxes and follow regulations. Yet the company looks to expand its platform to include cannabis brands this quarter. This could offer a much more vast and lucrative universe from which it could derive fees. Buyers familiar with their favorite brands could just order over the internet, rather than having to go into stores, essentially expanding WebJoint's footprint.

"With the introduction of the brand platform, we are actually opening up a new gateway and a new revenue stream for every piece of the supply chain," says Hilart Abrahamian, chief operating officer and cofounder of WebJoint. "So we should see those numbers go up."

Bundling, one service at a time

More than a decade ago, WebPT was in a similar spot: serving an underserved vertical with clients eager for simplicity and automation. Jannenga, a physical therapist herself, in 2006 was working as a clinical director for a physical therapy practice, looking for a way to get rid of its reliance on pen-and-paper medical record keeping. She teamed up with a software engineer and soon had a product to shop. 

They won over skeptics after pitching the platform in 2008, at a time when many practitioners didn't understand what the cloud even was and were hesitant to migrate medical information onto it. Word soon spread among therapists, and WebPT was off and running, gaining 5,000 clients in three years. By last year, it had more than 80,000 clients using the service.

Like other successful vertical software companies, WebPT has bought other software companies over time to bolster its own platforms, in areas such as billing, physical therapy and in related niches such as mental health. In addition to bolstering predictive analytics for therapy businesses, WebPT is working to streamline the link of over-the-counter and insurance payments with whatever accounting software its clients are using. 

As providers like WebPT continue to add services, from billing to analytics and beyond, they'll likely become more imperative in the eyes of their users. "It's more of an all-in-one package," Oglesby says. "It makes those relationships stickier."

In a SaaS world that's growing up, it's that kind of convenience that will separate out the winners in any market vertical.

The statements and opinions of the writer do not necessarily reflect those of TSYS.

Other Articles by Charles

Charles Keenan

Charles Keenan has written about payments since joining the American Banker as a staff reporter in 1997, a time when automated teller machines were appearing just about everywhere but people’s living rooms thanks to the relaxation of surcharging rules.

His work at the American Banker included writing about credit and debit cards, merchant processing, and bank stocks. He later freelanced for the Banker and industry publications such as Banking Strategies, Bank Director, Community Banker, and U.S. Banker. He also writes about investing, insurance and health care, and is based in Los Angeles.

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