GS Logo
The Green Sheet, Inc

Please Log in

A Thing
View Archives

View PDF of this issue

Care to Share?

Table of Contents

Lead Story

Partnerships fuel portfolio growth


Industry Update

Direct Air's bankruptcy threatens JetPay

Coalition responds to retailers' debit rule complaint

Consultancy faults PCI tokenization guidance

Heartland breach suit settled

Selling Prepaid

Prepaid in brief

Expo meets expectations in atmosphere of change

Prepaid goes to Washington


Choosing a partner for life

Justin Milmeister
Elite Merchant Solutions

Technology, a catalyst for ISO growth

Mustafa Shehabi
PayCube Inc.


Street SmartsSM:
Plotting a prosperous future

Jeff Fortney
Clearent LLC

Is it time for you to resell integrated payment systems?

Paul Hunter
Sterling Payment Technologies

As a PCI compliance role model, how do you measure up?

Heather Foster

Use new card fees to build merchant rapport

Jeffrey Shavitz and Adam Moss
Charge Card Systems Inc.

Working with outside marketing experts

Peggy Bekavac Olson
Strategic Marketing

No more contract-signing hurdle

Steve Norell
US Merchant Services Inc.

Company Profile

Electronic Payment Exchange

New Products

Wireless payments at the restaurant table

Company: Viableware

Driving donations online for nonprofits

eSelectPlus with DonorDrive
Company: Moneris Solutions


Don't let hot leads slip away


Fulfilling brand promise



Resource Guide


A Bigger Thing

The Green Sheet Online Edition

April 09, 2012  •  Issue 12:04:01

previous next

Is it time for you to resell integrated payment systems?

By Paul Hunter

For the past 10 years or so, while larger merchants have been taking advantage of the benefits of complex integrated payment systems, most small to midsize merchants have been limited by the electronic cash registers (ECRs) they've purchased off the shelf at big-box retailers.

But now, thanks to wider acceptance and the declining price of electronic cash register technology, smaller companies can afford integrated payment solutions and enjoy the business intelligence of more sophisticated systems.

This shift is advantageous for smaller merchants, but it has created a challenge for some ISOs. "We were selling terminals but a lot of our competitors were giving terminals to merchants when they signed up for credit card service," said Hiram Hernandez of First Capital Payments in Rochester, N.Y. "It was getting harder for us to sell terminals when our competitors were giving them away."

First Capital Payments was not the only ISO to feel the pinch. "When POS resellers started selling credit cards, we lost revenue sources for selling equipment," said Darrell Story, Office President of My Credit Card Agent in Killeen, Texas. "In the span of about six months, we lost 120 accounts to resellers."

Adapting to the times

To adapt to this new landscape, First Capital Payments, My Credit Card Agent and other ISOs have became authorized POS resellers or have purchased POS businesses so they can provide integrated payment solutions to merchants, along with equipment and support.

"We had to find a different way to approach merchants," Hernandez said. "Offering integrated payments allows us to enhance the conversation. Instead of just discussing terminals, we can now talk about things like how to control inventory, reduce over-ordering, and decrease theft and fraud."

There are two major benefits to ISOs and merchant level salespeople (MLSs) who add integrated payments to their businesses. First, this approach creates new recurring revenue streams while adding more product payment types.

For Jerry Faith, co-owner and Chief Operating Officer of ISO Transpay Solutions in Louisville, Ky., purchasing a company that offered POS systems created valuable new revenue streams. "We are selling equipment and hardware as top-line revenue now," Faith said. "And we are adding programming, maintenance , service, and paper for the POS systems, and then the credit card processing and gift and loyalty cards."

My Credit Card Agent has enjoyed similar success. "By offering integrated payment solutions, we've brought on other items merchants need, like surveillance, text inserts and Internet," Story said. "We've also added billable services in providing regular service to the registers."

Second, this approach battles customer attrition. Attrition is one of the biggest costs for ISOs and MLSs. One way to help merchants succeed and offer value is not to drive the price down, but to continuously provide solutions. "POS systems save merchants time, which saves them money," Faith said. "By offering integrated solutions, we've become a consultant in their financials and day-to-day operations."

J.R. Studle of South East Card Services Inc. in Pompano Beach, Fla., is an ISO who became an ECR reseller in order to "stymie" the competition. "Most merchants in Miami get visited by salespeople almost daily," Studle said. "Many of our competitors doing the cold-calling only know how to claim they have lower rates.

They see the register and integrated solutions we've provided, and they don't know how to offer anything better. The register is a means to an end - the integration itself is what keeps merchants wedded to us."

Successfully adding integrated payments

ISOs and MLSs who are becoming authorized POS resellers are concentrating on the biggest market segment of merchants with an ECR need - those who now are essentially using calculators on top of cash drawers with older, stand-beside credit card terminals.

"You have to recognize you're not going to easily take business from an integrated system," Studle said. "You do need to concentrate on the less sophisticated merchants and explain to them why their current cash registers are costing them money, let them tell you what their problems are, and then consult with them about how an affordable ECR can help."

For ISOs considering becoming authorized POS resellers or purchasing a POS business, consider the following three tips:

Changing the game with integrated payments

Smaller merchants can now afford ECRs with the high-tech features that large merchants have been enjoying for years. It's good news for smaller companies, but it changes the game for ISOs and MLSs.

Giving POS systems away to get the processing destroys a valuable revenue stream for payment professionals while lowering the perceived value of their services. It may be a smart move for some ISOs to consider becoming authorized POS resellers or purchasing a POS business so they can provide integrated payment solutions to merchants.

"If some of us don't make this jump in the industry in the next five to 10 years, I don't think you're going to be in the industry, because of integrated payments," Story said. I agree. Do you?

Paul Hunter is President and Chief Executive Officer of Sterling Payment Technologies, a national company based in Tampa, Fla., offering a complete range of payment processing services to merchants, including credit, debit, fleet, gift card, rewards and loyalty programs, electronic benefit transfer (EBT), and check authorization and acceptance. Contact him at

Notice to readers: These are archived articles. Contact names or information may be out of date. We regret any inconvenience.

previous next

Spotlight Innovators:

North American Bancard | Simpay | USAePay | Impact Paysystems | Board Studios