By Jim Roddy, President & CEO at the RSPA
For the third consecutive year, the RSPA conducted a focus group with representatives from at least a dozen member companies to answer the question, “What does business look like for your organization next year?”
We’ll dive into the details in a moment, but let’s start with the bottom-line takeaway for RSPA members: 2026 is anticipated to be a growth year for the channel.
Every VAR, ISV, and vendor in our focus group projected growth in 2026 – two-thirds said strong growth while the remaining third expect moderate growth. The driving forces behind the optimism are strategic and tactical pivots that gained traction in 2025 and should accelerate over the next 12 months.
Since one of the themes was VARs and ISVs leaning on AI to accelerate their productivity, I dropped my four pages of focus group notes into Google Gemini to help me summarize top insights.
Side note: Yes, I edited the content AI served up to me – significantly. I’ve learned that for longer-form writing like a blog post, most AI tools help with headlines and organization, but they struggle to tie together nuanced concepts and communicate them clearly and accurately.
VARs, ISVs Define Ideal Customer, Change the Conversation
For many retail IT solution providers, the past few years have been full of hard lessons. Losing long-term merchant customers to the aggressive marketing of the margin-obliterating, VC-backed, 800-number, one-size-fits-all POS providers who don’t have a channel compelled them to shift strategies and methods.
They’re now going on offense against the 800-number guys through these six avenues:
- Relentless Focus on Ideal Customer: For many RSPA solution providers, their ideal customer is the merchant who wants help and guidance, not a do-it-yourself POS system.
- Tailored Marketing:“We have a sharper focus now on the customers we want to serve, and now we’re marketing that publicly.”
- Staying in Front of Customers: We heard from the group, “We have to exert more effort to maintain our relationship with our customers because they’re constantly bombarded with offers from payments companies and POS companies.”
- Flipping the Conversation: “We’re now talking about matching what (the 800-number guys) offer and how we also offer flexibility plus local service. We’re leaning into our strengths. We’ve learned how to change the conversation to make it our conversation, not their conversation. We know how to go on offense against the 800-number guys now.”
- “Free Isn’t Free”: Merchants have learned the hard way over time that many of the highly marketed “free” POS systems come with hidden costs. “Merchants are learning that ‘free isn’t free’ so they are open to exploring new systems,” one focus group member said.
- If That Doesn’t Work, Adjust Your Offering: Two focus group members said they have patterned their product/service bundles and installation rates to be similar to their 800-number competitors. “We can now tell merchants, ‘Yes, we can do the free stuff and also offer local support.’ We make about the same margin on those deals – we just make our money differently.”
AI Reality Check Coming in 2026
An industry analyst we invited to the focus group said their big question for 2026 is whether there’s an AI bubble or not.
“If it is a bubble, there will be strong growth until it bursts,” they said. “Then there will be a negative impact on the overall economy which will impact everyone. An AI bubble burst could impact overall demand because AI touches so many different sectors of our economy.
“Those in the channel with shoddy business models are in trouble regardless. Those who are showing real value to the customers will be able to navigate through the disruption.”
That statement brought to my mind a question I needed an immediate answer to from the group: Were your growth projections tied to AI?
None of the VARs, ISVs, or vendors said AI was a source for their anticipated growth. “We don’t plan on AI making money for us in 2026,” one solution provider said. “AI will make us better; it won’t make us money.”
For the near term, most VARs and ISVs see AI as an internal tool improving their efficiency and productivity. For example, an ISV said AI is helping them develop software faster, cutting a six-month development cycle down to 2-3 months, helping them keep pace with the better-resourced 800-number guys.
A VAR added, “Most of our customers are still bewildered by AI, so they’re not ready to spend money on it. We saw this with EMV for years – nobody touched it. But over time it became widely adopted. AI adoption might stagnate while merchants take their time to adapt to it.”
Another observation was that AI might be invisible to the merchant because it’s integrated inside many systems.
RSPA will be sure to keep the 800-number guys and AI in our sights throughout 2026 because we’re all about accelerating the success of our members in the retail IT ecosystem. Happy New Year!
