Unless you have armed yourself and your merchant account sales reps with the tools needed to differentiate yourself from everyone else out there, then hiring and training new merchant services sales reps is not going to go well for you. Without a proper sales toolkit, your sub-agents will resort to:
- I have the best merchant rate in the industry!
- We are the merchant services leader in Canada.
- If I cannot beat your rates, then we will give you $100!
- Allow us to?analyse?your processing statement for savings.
It is highly unlikely that your sales team will get much traction by cold calling using these approaches. If you have not already noticed, I am sure you will realize that most merchants in today?s competitive marketplace already have negotiated a good price with someone else. Any attempt to convert the merchant account will require further price reductions, perhaps to the point where the merchant account profitability is below minimum sustainable profit margins for your company. Let?s hope you never reach the point where the more you sell, the faster you will go out of business! So how will you grow your portfolio and train new reps to sell with you? Imagine this vision. You walk into the merchant business and they ask you brusquely, ?What?s your rate?? (Mr. Merchant is hoping to boast that their rate is much better so they can quickly dismiss you). But what would happen if you replied? ?Mr. Merchant, our commitment to your business is to match your current rate penny for penny, as I?m sure you?ve already negotiated a great rate, haven?t you?? How will Mr. Merchant react to that? Perhaps now you might hear; ?They come in here every day and/or call me every day, all day, trying to get me to change processors. Now you have the Mr. Merchant?s attention. And you are in the door. Time to pull out your sales toolkit and start talking with him about:
- How to attract new customers
- How to keep new and existing customers
- How to generate repeat customers
- How to level the playing field between him and every other major retailer or restaurant competing for the same customers.
If you can carry the discussion to show Mr. Merchant how to increase his revenue and perhaps teach him how to run his business better than he did yesterday, then your merchant services business will be around for the long term. Our next article will describe some of the tools available to the ISO or Agent which can help you to educate the small business owner today on how to be more successful.
Everyone wants to offer you advice:
Every business owner or in this case, the merchant services sales agent, has experienced family members, friends, suppliers and acquaintances contributing their ?valuable advice? for improving the business. Don?t test this the next time you are with friends or family ? We know what the results are already.
You are the expert in your field of trade:
Yes, you are the expert in your business. Selling merchant services to a retailer or opening up an Ecomm merchant account for a client will provide you the opportunity to demonstrate your expertise. After all, you have years of experience in your field. This is true regardless of your trade or field of expertise. It is because of this expertise that your business has developed, your client base grown and you are making a living at your trade.
How do I grow my business?
The merchant services sales agent sees tremendous potential for growth. A decision is made to grow the operation, add staff, and ramp up sales. Why not add 5 sales reps and an administration person to bring aboard the new merchant agreements? If every sales person brings in half of what the owner has proven he can do, we can expect to see another 5 to 10 merchant applications per sales rep times 5. Now your business must deal with 25 to 50 more merchant applications per month. This is fantastic! Why did I wait so long to do this?
The business side of the business.
Many agents have found out what happens next. What will happen to you is up to you. How you manage the business side of the business will determine your fate. Some make it ? many fail.
How is your business going? Have you tried to expand? Does your merchant services provider help you out? Are you at a roadblock and unable to figure things out? Your comments are welcome.
In today’s world of selling merchant services to small businesses, there are two types of ISOs and Sales Agents out there. You are either “Registered” or “Unregistered”. This article is for the “Unregistered” sales agent out there trying to build their own business.
In the eyes of the major card brands, such as Visa Inc. or MasterCard?Inc., an ISO is anyone who does the following:
- Offers merchant services
- Provides a merchant application, customer support or technical services for card processing
- Is “Registered” with the card brands
Registration is a detailed process of partnering with a suitable merchant bank or a larger, established ISO/MSP. The cost is $5,000 per card brand initially, and $2500 per card brand in subsequent years.?The only way to?truly?avoid paying this fee is to become a sales agent instead of an independent ISO.
Some sales agents mistakenly believe?they can use their own business names as long as they do not use them in conjunction with the Visa or MasterCard logos. This is not true. If unregistered ISOs use their own business names when talking about rates or fees, giving out their business cards, handing out brochures, or giving applications to merchants to solicit card processing, they are conducting business out of compliance. Sales agents must introduce themselves as representatives of their ISO or MSP.
Non-compliance may result in a serious warning or more likely a substantial fine assessed to the offending sales agent.?A $50,000 fine is a major expense that can destroy your residual income and personal credit history. Beware and research this carefully as you build up your business out there. An alarming level of confusion does exist among MLSs when it comes to this particular issue of compliance.
Visa Inc, MasterCard Inc and banks that issue their credit cards have agreed to a $7.25 billion settlement with U.S. retailers in a lawsuit over the fixing of credit and debit card fees in what could be the largest antitrust settlement in U.S. history.
Stores will now be allowed to start charging customers extra for using certain credit cards in an effort to steer them toward cheaper forms of payment. Merchants would also be required to disclose information about card fees to customers, and credit card surcharges would be subject to a cap, according to the settlement papers.
How will this play affect the Competition Tribunal charges against Visa Inc., MasterCard Inc. in Canada?
Since March 2012, over 35 witnesses have been called to provide expert testimony to the 3 charges.
- Merchants cannot encourage consumers to consider cheaper payment methods like debit or cash.
- Merchants cannot add a surcharge to purchases made with credit cards or high-cost credit?cards.
- Once merchants decide to accept a brand of credit card (i.e. Visa), they must accept all of?that brand?s cards, including cards with much higher fees. ( ?Honour All Cards Rule?)
The testimonies are educational and a great opportunity for the ISO Agent merchant services professional to learn the inside details on the industry they represent. ?Both Visa Inc and MasterCard Inc have given their final rebuttals, followed by the closing arguments of the Competition Tribunal of Canada. ?Full case details can be viewed on the Tribunal website.