Biff Matthews - President of Thirteen Inc., the parent company of CardWare International, and founding member of the Electronic Transactions Association - was a merchant level salesperson (MLS) well before the term was coined. As a Master Charge card salesman for Ohio National Bank in the early 1970s, Matthews sold to merchants the credit card acceptance solution of the MasterCard Worldwide precursor.
By 1975, Matthews had started his own company, Imprinter Sales and Service. The business repaired manual imprinters, otherwise known as knucklebusters. Matthews said sellers back then worked off of what was called "the grid" - a graph on a sheet of paper that calculated pricing based on the ratio of a merchant's volume to average ticket.
In 1983, Matthews' company became a distributor for Omron Tateisi Electronics Co. (now Omron Corp.), which sold a dial-up POS terminal that could only authorize transactions. Customers swiped cards through the terminal, but imprinters were still needed to capture and eventually settle transactions.
After Imprinter morphed into CardWare, Matthews continued with behind-the-scenes hardware repair and customer care. Today, CardWare supports ISOs big and small with POS technology and customer service. Once ISOs sign merchants, CardWare configures and deploys hardware to those merchants, trains them and then provides 24/7 help desk support.
Matthews therefore has an insider's view of the ISO-merchant relationship and has observed that ISOs are "constantly chasing new business, and they are not doing a good enough job of taking care of their current business." He noted that when service suffers and merchants jump to competitors, many ISOs do not bother to find out why merchants changed processors and make no effort to win them back.
Matthews believes ISOs are also not doing a good enough job of rating their merchants. If ISOs were to overlay the pyramid model on merchant portfolios, they would discover that about 20 percent of merchants in any portfolio, representing the top of the pyramid, recommend their ISOs to other merchants without prompting, or will do so when asked.
But the remaining 80 percent, the lower bulk of the pyramid, are relatively happy with their processors but not inclined to refer them, or are unhappy with their ISOs and will never refer them. Matthews said ISOs should focus 80 percent of their time on that top 20 percent, rather than on the 80 percent below.
He added that ISOs should also be factoring in the "hassle factor." For example, a large merchant could be a high-maintenance customer. "If that merchant is taking your time on nickel-and-dime problems, you are not out selling," he said.
When Matthews came of age in the 1960's, bell bottoms, Nehru jackets and long hair were in vogue, and older generations disapproved. But eventually those hippies matured into responsible adults. He believes ISOs and MLSs do themselves a disservice today when they write off younger merchants because they dress and act differently than their elders.
"Several years ago, I realized that the kid with the spiky hair, tattoos and piercings was going to be my customer of tomorrow, so I adjusted my thinking," Matthews said. "I made sure all of our people viewed them as they would everybody else and would be treated the same because those people will be tomorrow's doctors, lawyers, bankers and senators."
That same philosophy can be applied to the disruptions currently rocking the industry. Matthews said ISOs and MLSs should embrace new technologies, such as mobile payments, and the new players that are leading the charge. "I'm really excited about our industry," he said. "A lot of younger guys are challenging the status quo, and I think that's important."
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