Mastering the original merchant 'app'
This story originally appeared in The Green Sheet Issue 141202 on December 22, 2014.
How many merchants say yes to processing services only to change their minds when they see the merchant application? Sometimes, in spite of their best efforts, merchant level salespeople (MLSs) find themselves in reselling mode, guiding reluctant merchants through the nuances of new account paperwork. Many MLSs consider this guidance to be an essential part of the sale that sets the stage for long-term customer relationships.
While some merchants might be intimidated by legal language and others are too busy minding the store to study their agreements, most appreciate having an industry expert guide them through each step of the application process. Here are some ways to help merchants navigate the array of disclosures and options typically found in merchant applications.
Pricing highs and lows
Pricing has become more transparent in recent years, and merchants tend to be more knowledgeable about their processing options. However, big gaps remain in the public's understanding of payment card pricing models. MasterCard Worldwide's Interchange Myths and Facts takes aim at common consumer and merchant misconceptions. Its down-to-earth content effectively overcomes merchant and consumer misunderstandings and objections. Here is a quote from the paper, provided as an example:
"Myth: Consumers receive no value from interchange.
"FACT: Interchange facilitates tremendous value for consumers including the convenience, efficiency, safety and security of electronic payments. Additionally, consumers across the economic spectrum are able to use payment cards to access their money at ATMs and make purchases at more than 30 million merchant locations in fractions of a second at any time across the globe.
"By providing incentives for card issuers, interchange encourages banks to innovate and develop new payment options, broaden the range of card products available to consumers, and invest in cutting-edge security and fraud prevention measures."
Accept all cards
Merchants who accept all available payment card brands are well prepared for business in the omni-channel world. Discount rates may vary from one card brand to another, but lost sales can be even more expensive. In fact, there's no way to measure how many customers will pass by a store simply because they don't see a particular payment card decal on the storefront door or window.
Find a hardware fit
The equipment section of a merchant application looks deceptively simple, but helping merchants decide which boxes to check can be a complicated, time-consuming process. Payments industry consultant and former VeriFone Inc. Senior Sales Executive Nancy Austin suggested that understanding security basics and changing consumer behavior will help merchants make informed decisions about hardware.
"The concept of the future is shorter and shorter – gone are the days when one could provide a terminal to a merchant and it would let them process for 10 years or more," Austin said. "Security requirements and new payment methods mean that the merchant will have to update their software and hardware more frequently to comply with the PCI, EMV and other forthcoming guidelines. They should be aware of the October 2015 liability shift and expect that more changes will be taking place with greater frequency." She added that many solutions are available to merchants to help them safely process transactions and create new ancillary revenue streams.
Nate Hirshberg is Marketing Director at Harbortouch, a leading national POS system and merchant services provider with headquarters in Allentown, Pa. Hirshberg recommended taking a consultative approach when helping merchants choose processing systems.
"Every business has different needs, and agents need to work closely with merchants to identify the right hardware and software fit for their businesses," Hirshberg said. "Merchants have so many choices: standalone terminals, integrated cash registers, tablets, and full scale POS systems. Merchants appreciate the opportunity to work with knowledgeable sales agents who can help them navigate the options and understand the process. It can also set the stage for meaningful relationships and referrals down the road."
Find a software fit
Joe Villamil is Vice President of Business Development at Sacramento, Calif.-based POS Portal, a nationally recognized distributor of supplies, terminal modules and merchant acquisition customer relationship management solutions.
Villamil noted a paradigm shift in recent years in the positioning of payments industry devices. Selling used to be a straightforward proposition when there were just a few countertop terminals in the market that looked and acted in remarkably similar ways. Today's MLSs who want to play in the mobile POS and tablet space need to know more about software and ideally align themselves with independent software vendors (ISVs).
"Many ISVs tend to be vertical in nature, catering to industries such as dry cleaners, convenience stores and wineries," Villamil said. "Some can be more generic. ISVs can be a strategic resource for agents, especially ISVs who partner with MLSs to help them close deals and educate merchants."
Villamil said many ISVs provide a range of products and services, including installation, repair, and bundling of hardware and software solutions. He recommended that ISOs and agents look for an ISV who will actively partner by helping them close sales, create hardware and software bundles, and confidently guide merchants through an expanding array of mobile technology and software solutions.
"MLSs shouldn't be concerned with hardware revenue anymore," Villamil said. "There's recurring revenue to be made in payments processing, software and managed services. The tablet is a flexible, scalable platform. Merchants who invest in a tablet starter package can upgrade software as their businesses grow. Agents can become trusted partners who grow with their merchants and help them at every decision point."
Each app, a new beginning
Guiding merchants through the application process is the first of many milestones in the MLS/customer journey. The shift from paper to electronic media has made little to no impact on the processing application format. Disclosures that appear on tablets, smart phones, and paper are still difficult to read and understand.
Merchants still have to navigate a sea of fine print before they sign on the dotted line or push the "I agree" button. Legal terminology and hard-to-read lettering may be a turn-off, but it's hardly an excuse for signing an application without carefully reviewing it.
Some industry disruptors may offer simplified "opt-in" alternatives to the standard merchant agreement, but they can never replace the human element. The evolving payments ecosystem is still a relationship business, and MLSs remain its very best ambassadors.