By Jeffrey Shavitz
Charge Card Systems Inc.
Please note that I do not have a Magic 8-Ball (actually all of my three children have one and it always says, "Ask again later," no matter how many times you shake it) to consult regarding our industry, but I do frequently get asked about the future of our business from salespeople already in the payments industry and others considering entering it.
Here's my simple answer, and then I'll elaborate on it in greater detail: I don't know. How's that for honesty? As an owner and manager of a company, I often receive this question at our staff meetings, and my employees are looking for a sound, smart response to this simple, yet incredibly difficult-to-answer question.
But I can offer tips that could help those wanting to enter or remain in our industry.
Our business is not going away. Bankcard usage (both debit and credit) continues to grow, and merchants, although they do not like the accompanying interchange fees, must continue to accept all forms of plastic payment.
As in any competitive business, the payments industry is experiencing decreasing profitability. To make the same or even more money, we all need to open more and more merchant accounts. This is a pretty obvious tactic, but it's not an easy task to accomplish.
In my opinion, it's all about scale and leverage, and a merchant level salesperson (MLS) can still exponentially grow his or her business. Fortunately, this strategy has worked for my company, as many of our sales partners continue to develop prosperous careers.
Become an expert in the nuances of our business. Traditional credit card processing has become so competitive that you really need to differentiate yourself, through ways beyond just flashing a great personality. Learn something so valuable about our business that merchants want very much to buy from you.
There's an adage that customers would rather pay "a fair price to an incredible salesperson" than pay "the lowest price to an average salesperson." Think about your own experiences and reflect on the truth of this statement.
Of course, you must charge a competitive price, but I can and have charged more basis points than my competitors and still won the business because of exemplary service.
Pick your sales channel. When we started our company, we only solicited Fortune 250 companies and very large private companies processing in excess of $5 million per month. While we have successfully closed many large merchants, I believe the future of the MLS is in small to midsize merchant processing at less than $100,000 per month.
Why? I'm not suggesting you should give up on these larger opportunities, but the margin compression is tight, and banks have chosen to "give away" interchange to win the banking relationship.
On the other hand, profitability still exists in the small to midsize merchant arena, where there is opportunity for us to act as payment consultants while developing a profitable partnership.
I would be naïve not to mention the power of technology in this article. Stay current on trends so that you can sell appropriate services and terminals to your merchants, whether it is wireless or mobile processing on a smart phone (iPhone, BlackBerry or others).
MLSs say to me that the industry was so much easier 10 years ago when interchange-plus was not common and we could earn significant money on leases. Get over it. As Darwin said, it's "survival of the fittest."
Five years from now, people entering the payment space will say how easy it was in 2010 to make a living. Just go out there and sell, provide a good service, be fair to your merchants, and you can build a great business.
I have many friends who are just now choosing to enter our space; they wouldn't be doing so if they didn't believe opportunities existed. And, if you truly are negative about our business and its future, find a new career. Think creatively. To continue being successful in our space, think out of the box. I know that is a trite expression, but it is true.
In life and in business, success exists largely in the unknown - especially for the entrepreneurial salesperson. Embrace the excitement of the unknown. The unknown is why you chose to become an entrepreneur in our profession. If you want to have a structured day, stop selling merchant services and get a job. There is a big difference between a job where you earn a salary and a sales opportunity (that we are all so fortunate to have) where you can create your own future.
I hope I have answered the question about our future. Nobody really knows what the future holds, but I'm excited to be part of the payments industry journey.
Jeffrey Shavitz is one of the founders of Charge Card Systems Inc. He is also an active member of The Green Sheet Advisory Board and the First Data ISO Advisory Board. He can be reached at jshavitz@chargecardsystems.com or 800-878-4100. For additional information on CCS, please visit www.chargecardsystems.com/gsadvisoryboard or the company's corporate website at www.chargecardsystems.com.
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