By Jeff Fortney
Ican almost set my calendar by it. Every year at this time conversations turn to the question of what the future of the ISOs and merchant level salespeople (MLSs) in the payments industry will be. Lately, the question has been more along the lines of whether there will be a future for independent sales agents at all.
This year – like every year – the talk about this began in late March. It was a common theme on message boards and forums. Sure, many discussions were more specific, for example, referencing the future of terminals versus POS systems, cloud-based systems versus static terminals, and of course, the continued debate about U.S. Europay/MasterCard/Visa implementation.
Yet throughout all of the posts and comments, an underlying current remained the same. Folks were saying, "I like what I am doing, but will I be doing it a year from now?" or "There is so much press about sweeping industry changes today. Is my future at risk?"
Let me be clear. There is nothing wrong with wondering what tomorrow will bring. It's a common human desire to know what the future holds (one common sales approach is to sell based on the prospect's fear of the future). And it is perfectly fine to ask for people's opinions about our prospects.
However, problems arise when we base decisions solely on others' prognostications about the future. To avoid doing so, it is important to separate the facts from the myths. In an effort to assist with this, I'm listing herein four myths whose debunking time has come.
It seems proponents of this myth base their opinion on the belief that companies wouldn't offer new products without first studying the demands of the marketplace. In certain spheres, this could be considered a valid argument. However, the payments industry is littered with companies that have fully researched the market, identified a need, addressed that need and still failed.
In some cases, the reason for failure was timing. For example, near field communication (NFC) was the buzzword in the first decade of this century. There were two companies offering NFC devices that easily connected to existing terminals, yet neither survived the decade. Today, with the advent of mobile wallets, it appears NFC is making a comeback. It's wise to stay abreast of new offerings for sales purposes, but the emergence of a hot new product doesn't necessarily indicate an immediate need to change.
I hear this myth voiced all the time. I've heard many warnings like, "If you don't stop selling terminals and start selling POS systems, you will find you can't sign merchants." Or, my favorite: "Everything you're doing is wrong."
This line of thinking has persisted for almost 20 years. Every MLS faces a fear of his or her products and services becoming obsolete. However, many forget that if they are successful today, changing to a different product, new solution or even a different approach would likely blunt their success – at least in the short term and potentially in the long run as well.
For example, if your sweet spot is merchants who use terminals and you are gaining new customers in this demographic, while also retaining a healthy share of your portfolio, and if your merchants don't seem particularly interested in a cloud system, what do you think their reaction would be if you stopped offering to reprogram or replace their terminals and pushed a more expensive POS solution instead? You would probably need to find a new market or target.
One caveat: if you are not currently successful in your sales efforts, you likely do need to make changes. If your efforts have been consistent, reevaluate your plan and your targets, but don't drop your current offerings unless you can see that the new product or solution you're considering is better suited to your targeted merchant group.
Yes, POS solutions have a place in the industry, as do terminals and other types of devices. That place is one that fits your marketing plan and your target merchants.
I find this recurring myth troublesome. One of my favorite sayings is: He who doesn't learn from history is doomed to repeat it. This statement has proven to be true time and time again. It applies to our industry as well.
This myth came up in a conversation discussing EMV, in particular its U.S. rollout and deadlines. The people I was speaking with were advocates of replacing every terminal with an EMV terminal today. One approach they suggested was to tell merchants they "have to do it," since if they do not, they will fall behind everyone when "the EMV acceptance begins."
It made me think of the late 1990s and the push of smart cards. Many terminals equipped with smart card readers were rolled out with the anticipation of full acceptance. For several years, conversations centered on the benefits of smart cards. But a funny thing happened: no cards were issued, and terminal manufacturers stopped putting smart card readers into the terminals.
This doesn't imply that EMV will go the way of the smart card. But it does show that there are many moving parts to the EMV rollout, many that have yet to be addressed.
Lesson learned: don't assume that anything is an absolute until it truly becomes one. The past still can provide direction for the future.
Several years ago a payment veteran wrote a series of articles declaring the upcoming death of ISOs and MLSs. His position was that as the industry evolved, banks and others would become the providers of the future. Today, ISOs and MLSs continue to grow their portfolios by signing new merchants. And new people are joining our industry every day.
Sure, we all need to adapt, but let's adapt in ways that will grow our businesses and not discard what has made us successful.
Jeff Fortney is Vice President, ISO Channel Management with Clearent LLC. He has more than 17 years' experience in the payments industry. Contact him at firstname.lastname@example.org or 972-618-7340. To learn about how Clearent can help you grow faster and go further, visit www.clearent.com.
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