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The Green Sheet Online Edition

June 27, 2011 • Issue 11:06:02

Will POS control solve merchant attrition?

By Jerry Cibley
United Bank Card Inc.

It has happened to all of us. A customer with a monthly processing volume of over $120,000 unexpectedly drops off the residual report. Suddenly a second, and then a third, active client fall off as well. Concerned, you jump in your car to do a quick drive by. Expecting to see a closed sign on the door, you see cars, patrons and a flurry of activity. The business, a restaurant, is alive and well, but processing with someone else.

You know you provided great service, competitive rates and even brought in a loaner terminal on a snowy Christmas day when the owner called in a panic. What happened to the great relationship you thought you had with this merchant?

Meet and greet

Frustrated, you walk in the door and look for the owner, Mary. She greets you with her usual big smile and says, "Let me buy you a drink and show you my new POS system. Isn't it beautiful?" You look, and there it is - a brand-new system gleaming under the spotlights at the head of the bar. You say, "Nice to see you and your new system, but why did you change your credit card processor? I thought you were happy with our rates and service. Was there a problem that I was not aware of?"

"Oh no," Mary says. "We loved your service. As a matter of fact, your rates were better than what we are paying today, but our new POS vendor suggested that we go with his processor because the new POS system was designed to integrate seamlessly with his processor. It has worked just fine since the day we went live, and we are very happy with it."

As the conversation continues, you tell her your processor integrates with her new POS system in the same way her new processor does and, of course, you can still deliver better rates and the high-level customer service she has come to expect. "Oh, that's great!" Mary says. "Let's do that. I'm thrilled that we can continue to do business together."

Payments hardball

You call the POS company, and they inform you it is not a problem to change Mary's processor. There are just a few housekeeping procedures they need to take care of. There is a $350 early termination fee (you can somehow absorb that) and a charge to reprogram the POS system. You ask, "How much for the reprogramming of the POS system?" The answer is swift, cutting and shocking - $1,200 - which has to be paid in full prior to the switch-over. Great, so now what do you do?

Can a POS company really charge these kinds of rates? Would you? You would if it ensured that your competitors would not be able to take away your business with a quick stroke of the pen. Your competitor says, "Sign here, sir," to your customer, and your residual is a memory. How many more of these can you afford to lose?

In today's economy, you cannot afford to lose any customers, and now you have lost three this month alone. You see your retirement diminish in front of your eyes; the rosy future you counted on is not looking so rosy anymore. You drive home and wrestle with this issue all night long. Then the stark reality of the payments industry hits you - the POS vendor has become the tail wagging the dog. POS hardware providers are now so tightly intertwined with the card brands that you wonder if there is still room for independent ISOs who are not in the POS game. It seems that you have to be on a POS vendor's team in order to secure your future.

ISO-POS vendor symbiosis

Today's successful card-accepting merchants are working with POS companies to help them locate deals and potential opportunities. I do not think that ISOs and merchant level salespeople (MLSs) necessarily want to become POS dealers, but a great deal can be accomplished by developing symbiotic relationships with POS hardware providers. Plenty of POS dealers are looking for worthy ISO partners. Not every POS vendor is in the credit card processing business. Partnering with a consolidated credit card processor/POS company offers many opportunities for ISOs and MLSs.

These companies can provide you support to sell the product, support for your customers, marketing solutions, and assistance with learning how to increase business and ultimately your residual stream.

Choose carefully, and you may be in a win-win situation for yourself and your customers. Partnering with POS vendors might be the way to secure your future. end of article

Jerry Cibley is a 25-year veteran of the POS industry and, during that time, founded three POS dealerships serving New England. Today, Jerry is the National Sales Trainer for United Bank Card's Harbortouch POS division. As such, his role is to train UBC sales partners on the intricacies of the POS business so they can become POS experts themselves, ensuring their success with the free Harbortouch POS program. Jerry has been known throughout the industry as the "POS Man" and can be reached at jcibley@harbortouch.com

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