As you may be aware, the Monthly Software Compliance Fee is a key part of our business model. Its primary function is to enable us to continually develop and upgrade our software to ensure it meets the requirements of the Worldline Network, as well as the needs of our resellers and merchants. Without the reliability and quality of our software, the service Skyzer and you provide would be significantly downgraded. A secondary function of the Software Compliance Fee is to provide support to resellers and merchants when issues arise. Without the Software Compliance Fee, the service Skyzer provides would be significantly poorer. Our Software Development and Support Costs have no link to the number of active terminals; they are fixed and continually increasing costs. Ironically, the more resellers paying the Fee, the greater our ability to maintain or even reduce our current monthly charge. The fewer resellers that do so, the more likely the Fee will need to rise for everyone.
It has been over 10 years since Skyzer increased the price of the Software Compliance Fee, but as we all know, the financial pressures we are all facing at this time are huge. We, like everyone else, have been forced to look at how we meet these pressures. That analysis has somewhat shocked us.
At present, we do not charge when we initially activate software on the terminals, and we do not charge a Fee when we deactivate a terminal. Both of these actions involve significant work across our Software, Support, Finance, and Admin teams. When we “activate” the software on a terminal, the expectation is that the software remains active until the terminal is permanently deactivated – when it is no longer required for ongoing use. While it is “active,” it is expected to be constantly up to date with software releases to meet the requirements of Worldline. A deactivation is intended to be a permanent action; it is not intended to be done on a whim or simply to try and avoid the Monthly Software Compliance Fee while a terminal is awaiting deployment at a reseller or merchant.
Sadly, we are seeing an increasing pattern where some resellers are deactivating and reactivating terminals to simply avoid paying the Software Compliance Fee. This is unacceptable, as it abuses those resellers who are continually paying the Monthly Software Compliance Fee, which allows our software to continue to be developed, upgraded, and supported. Essentially, these resellers are deactivating the terminal for a period to avoid monthly charges and then reactivating and getting the software upgrades that others have paid for, either for free or at a limited price. It is important to remember that we already provide a 10% discount every month to resellers to help with the occasions where a terminal is waiting to be deployed. The constant deactivation and reactivation practice is essentially double dipping, and all resellers who pay regularly are being taken advantage of by those who are following this practice.
As noted above, the actions of activation and deactivation all involve significant additional work and costs for our teams. This is multiplied exponentially when these actions are being done repeatedly. We have, therefore, been forced to take action to ensure we can continue to develop, upgrade, and support our software. We cannot continue to absorb those increasing costs while seeing our income drop as a result of certain resellers trying to game the system and double dip from us and other resellers.
We felt we had three options:
- To increase the Monthly Software Compliance Fee for all resellers and end the 10% discount allowance.
- To increase the Reactivation Fee to both deter false temporary deactivation practices designed to minimize payment of the Software Compliance Fee and help absorb the additional costs we incur in undertaking these multiple deactivations and reactivations. Our current fees are clearly insufficient in both regards.
- Both – Increase the Monthly Fee, removal of 10% Discount allowance, and an increase in the Reactivation Fee.
We felt that an across-the-board increase in the Software Compliance Fee and removal of the 10% discount was potentially unfair to those resellers who have not been trying to “game the system.” Therefore, we have decided to introduce a Reactivation Fee of up to $250 for each reactivation of a terminal. We find it grossly unfair when a reseller avoids the Software Compliance Fee used to develop and upgrade software for a period of time and then simply gets the benefits of that work without contributing towards the cost of it.
It is important to note:
- Initial Activation is free.
- Deactivation is free; however, it is important to note that when you deactivate a terminal, we expect that to be a permanent deactivation.
- Reactivations will cost up to $250 for each terminal. If we feel someone is constantly abusing the Deactivation/Reactivation practice, we will charge the full $250 each time. If someone makes a genuine mistake, we will not enforce the fee… we know genuine mistakes do happen… once. For the first time a Deactivated Terminal is reactivated, the fee will remain at $75 if the reactivation occurs within 12 months of the initial deactivation. The second or subsequent times the same Terminal is reactivated will result in a fee of $250. Any terminals that have been deactivated for 12 months or more will be subject to a $250 Reactivation Fee. All Reactivation Fees must be paid in advance of any reactivation.
- If you don’t deactivate and reactivate terminals frequently, you will not incur this cost at all.
- The Reseller’s ability via the Dealer Portal to disable or enable a merchant’s terminal will remain; however, it is important to note that this has NO impact on Software Compliance Fees. It is purely to allow you to manage your merchants if they are perhaps not paying you. Skyzer has no involvement in this process. It is not a Software Deactivation/Reactivation activity. When you are “disabling” a terminal, you are not removing your requirement to pay the Monthly Software Compliance Fee.
- The Reseller’s ability to use the Deactivate/BER option in the Dealer Portal will remain. This action will result in triggering the Software Deactivation Process and will result in our teams deactivating the Terminal in TMS.
We are disappointed that we have been forced to increase this fee, but we cannot allow the problematic practice to continue. It is an abuse of trust between us and other resellers. We hope this fee will eliminate the problem. Sadly, if it doesn’t, we will be forced to consider an across-the-board increase in the Monthly Software Compliance Fee and the removal of the 10% Discount allowance as options we will need to revisit. As noted above, it has been over 10 years since we raised that fee, and we are hoping in these challenging times we can wait a little longer. For most resellers, this increased Reactivation fee is completely avoidable, and you will not be impacted in any way. For those that have been abusing the system, it will have an impact, and we have deliberately done this to have such an impact. We are not willing or able to allow this practice to continue; it is taking advantage of us and other resellers.
We recognize that some resellers will have recently deactivated a terminal with the intent of later reactivation. Therefore, we have decided to keep the current $75 Reactivation fee in place until May 31, 2023, to allow these resellers an opportunity to avoid the increased Reactivation Fee rates, which will come into effect from June 1, 2023. We suggest you act quickly to avoid the increase in the Reactivation Fee.
Thank you for your ongoing support and understanding.