Leading the way to merchant retention

As one of the first companies to offer both month-to-month service agreements and pass-through pricing, Veritrans Merchant Services LLC has long put a premium on cultivating close, trusting relationships with its merchants and agents, according to Veritrans President Jeff Adcock. "It's got to be a win-win for the provider and the merchant, and that means not signing a three-year contract with a large cancellation fee," he said. "It just comes down to basic integrity and business sense. If we do a good job, [the contract] doesn't need to be locked in."

According to Adcock, Veritrans has monthly service agreements with about 99 percent of its merchants. Eighty percent of its merchants receive pass-through pricing, meaning interchange rates are based strictly on Visa Inc. and MasterCard Worldwide recommendations and do not contain hidden mark-ups, he said. Also, Veritrans' profit margins go unchanged throughout the duration of every merchant contract.

"On pass-through, they're going to pay wholesale on dues and assessments," Adcock said. "We'll charge you the same amount [as competitors will] on interchange, but others will increase the amount they're charging over time. ... Before the economy tanked, margin increases weren't that common, but now it's very common, and that's something we don't do."

Banking on trust

That same attitude of fairness applies to the company's sales agents, Adcock said, noting that Veritrans offers residual percentages between 50 and 70 percent and that his company was one of the first merchant services firms to offer agent residuals. Broadly speaking, increased competition and changing market conditions have made merchant-friendly contracts a much more popular selling point among merchant providers than they were in years past. But Adcock emphasized that favorable pricing and contractual flexibility have always been staples of the Veritrans merchant services program.

For example, the company began offering month-to-month merchant contracts and what it deems to be generous residuals to ISOs as early as 2000, and pass-through pricing to large and small merchants alike since about 2004. "At the formation of the company, our standard offering was no early termination fee - that was an original selling point," Adcock said.

According to Adcock, Veritrans' long-standing commitment to merchant satisfaction distinguishes it from competitors that may seem more opportunistic and helps to reinforce the trustworthiness that Veritrans' representatives pride themselves on.

Emphasizing education

Veritrans also provides educational programs to ensure that its ISOs, merchant level salespeople (MLSs) and merchants are completely clear about issues pertaining to interchange and other price points, Adcock said. Its comprehensive agent education plan includes a thorough review of the company's contract and pricing structures, plus proper procedures for boarding new merchants and assisting existing ones.

Perhaps most important, the lesson plan includes an elucidation of interchange and other murky issues that surround payment acceptance, processing and settlement, according to Adcock. Agents who learn these things are then asked to clearly convey the same information to their merchants.

"I believe in education, I believe in full disclosure, and I believe in agents and merchants understanding what they're dealing in," Adcock said. "That means understanding the industry, who the players are, what the interchange process is from start to finish, what the fees are, how to tell the difference between pricing methods, understanding how the money is made and knowing where the real value is.

"We take the time to explain not only how we do things, but why we do them. We want to make sure our agents understand all this so they, in turn, can educate their merchants, making us better positioned to keep those merchants in the long term."

Keeping in touch

Part of Veritrans' training program is ensuring that sales agents maintain close communication with their merchants, checking up regularly and providing ready assistance with questions, problems or requests. Such practices drive merchant retention and create upsell opportunities. That is particularly true in today's quickly evolving market, where ever more businesses are integrating tools like high-tech gift-and-loyalty programs, automated office services and mobile payment acceptance, to name a few.

As one example, the company is seeing more and more interest in mobile payment acceptance, as traveling professionals, such as repairmen, seek the benefits of instant approval and quicker settlement, Adcock noted.

"We go into detail about having frequent touches with merchants, checking back in after a month and making sure they understand their statements or [asking if they] have any questions," Adcock said. "We want our merchants to be educated about any changes in the industry or services that might be beneficial. Or it may be that they want to review their statements and see if there's a way to decrease their costs. ... We also work hand-in-hand with merchants to help them achieve PCI compliance." Adcock said Veritrans wants merchants to always call the company or its agents with any issues. He noted that when he asks prospects, "When was the last time you talked to your agent?" 99 percent of them reply, "When they installed our system" or "Our first point of contact."

Going beyond the basics

Outside of its core processing platform, Veritrans' merchant products include sophisticated touch-screen POS platforms for restaurants and other hospitality industry businesses, cloud-based merchant reporting and data management, as well as billing and invoicing. Automated billing is especially popular among medical offices, which can immediately collect co-pays rather than billing patients in the mail, Adcock said. It is also popular with storage firms, attorneys, service providers and other businesses that typically invoice their clients, he added.

"Anybody who sends out a bill or invoice, whether on a regular or irregular basis, is a good candidate for the electronic invoicing program," Adcock said, adding that companies with return customers can also use the system for recurring billing.

Regarding medical practices, Adcock said: "If the patient owes money for a co-payment, it can take two to three invoices to get paid. Plus there's the cost of sending it out and putting together all the mail. When it's all said and done, the cost of mailing a paper invoice is between $7 and $8. That's a big savings over time when you're not spending that money."

Among Veritrans' payment acceptance services are credit card and electronic check processing for business-to-business transactions. Those transactions are typically conducted with standard checks, but the use of credit cards is helpful both for speeding up the authorization and settlement processes, as well as for helping business owners accrue credit card reward points, Adcock pointed out.

"It's really about improving the efficiency of a business and allowing employees to interface with customers instead of spending time on billing and collections or waiting in line at the bank to deposit checks when they can do that from their computer," he said.

Aiding with data

All Veritrans merchants can subscribe to the company's cloud-based merchant reporting tool as a way to track receivables and study business trends in a number of different ways. Adcock said the service is particularly useful for multilocation merchants, who can access the same, consolidated body of data from any location or medium (Internet or mobile device). "It lets the merchant track their sales and growth, and detect trends," Adcock said. "Especially for multiple locations, it allows them to be able to much more efficiently determine if there's an issue at a location that needs to be addressed.

"At their fingertips, they can look at a location individually or all their stores collectively. It's just much more user-friendly than tools used in the past. We hear from clients, 'Wow, this is so user-friendly, to have a snapshot of historical data and immediately get such a clear picture of how our business is doing.'"

Veritrans' newest offering is a mobile-based gift and loyalty program that employs near field communication (NFC). Consumers who download the mobile application can use its global positioning system to find their proximity to participating businesses. Upon payment, customers accrue loyalty points or redeem a gift card by a "tap and go" maneuver that utilizes NFC technology added to the merchant's POS system.

Veritrans is "very good when you call them with a problem or a customer needs something done," said Gabriel Torre, an MLS working with Veritrans. "You can call them quickly and directly and they take you through the process to help. .... They support everything you do, and when they say they're going to save you money, they save you money."

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