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Table of Contents

Lead Story

Payments' place in the retail playbook - Part 2

Dale S. Laszig


Industry Update

Retailers challenge PCI, seek federal intervention

Data breaches, EMV advance new fraud trends

CFPB to processors: Don't turn blind eye to fraudsters

CFPB seeks public comment on 'payday' loan guidance


U.S. credit card users like installments. A lot

Open-loop prepaid will play a role in next loyalty move by Starbucks

Aaron Mercurio and John Grund

Be vigilant about data vulnerability

MCX pulls plug on CurrentC


The misguided 'kill the check' chorus

Brandes Elitch
CrossCheck Inc.

Guide your startup so it won't implode

Ken Musante
Eureka Payments LLC


Street SmartsSM:
The alternative financing rebrand wrap up

John Tucker
1st Capital Loans LLC

Think PII, not just PCI

Fran Sachs and Ross Federgreen
CSR Professional Services Inc.

Paper reports, online portals can coexist

Steven Feldshuh
Merchants' Choice Payment Solutions East

Consolidation in acquiring

Adam Atlas
Attorney at Law

How integrated, complementary technologies lift valuations

Adam Hark

Company Profile


New Products

Brandable, EMV-certified mobile payments

AprivaPay Plus
Apriva LLC

Biometrics for enhanced, selfie authentication

Eyeprint ID
EyeVerify Inc.


The pursuit of large merchant accounts


Letter from the editors

Readers Speak

Resource Guide


A Bigger Thing

The Green Sheet Online Edition

June 27, 2016  •  Issue 16:06:02

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The pursuit of large merchant accounts

At some point, every merchant level salesperson (MLS) dreams of signing a large merchant and the hefty residuals that will follow. In "How to win a major bid," The Green Sheet, Sept. 28, 2009, issue 09:09:02, Ross Federgreen emphasized the need for thorough preparation when targeting such accounts.

"The Holy Grail in the payments industry is to have a merchant who processes more than $25 million per year," Federgreen wrote. "Many merchants at that level place their processing through a competitive process called a bid. … Typically included in the bid information document are a description of the business; types of processing; average ticket amount; number of merchant identification numbers (MIDs), locations and transactions by brand; special needs and requirements; and a request for incentives.

"Questions normally asked of bidding entities include market-specific experience, corporate history, financial soundness, banking relationships, interrelationships with middleware, domestic and foreign processing capacity, alternative payment experience, references, capacity and a host of bid-specific questions."

In Good Selling!TM: The Basics, Paul H. Green also stressed the importance of preparation when pursuing large merchants, noting that MLSs tend to forget basic actions that may be critical to prospects. "For example, most of us are lazy when it comes to research," Green wrote. For large accounts, you need to have, at minimum, a basic profile of the company, annual revenue figures and the names of the corporate officers before you meet with them, he added.

"It's also a good idea to target several people with varying levels of influence within the company," Green said. "When speaking to them, mention conversations with the others that you have met or spoken with. This makes it difficult for any one of them to ignore you."

First, assess risks

Before deciding how much resource to devote to large merchants, however, it's essential to realize the risks involved, Jeff Fortney pointed out in the Street SmartsSM article "Make large merchants your gravy," The Green Sheet, Nov. 12, 2012, issue 12:11:01.

"It is critical that, as a sales rep, you comprehend which merchants impact your residuals the most and quantify the effects," Fortney wrote. "Set thresholds so you can mitigate the impact that any one merchant can have on your income. Start by calculating the percentage of your residuals you could lose and still survive if a large merchant switched service providers."

Adam Hark brought up the impact large merchant accounts have on portfolio valuation. In "The counterintuitive, paradoxical nature of large merchant accounts," The Green Sheet, Nov. 9, 2015, issue 15:11:01, he wrote that "in the sale of a merchant processing ISO or portfolio, a large merchant that generates a large amount of revenue is worth less than a smaller merchant generating less revenue. The reason is a function of risk to the buyer. "We must remember that an ISO or portfolio is worth what a buyer is willing to pay for it," Hark noted. "In the case of portfolio and ISO sales, what a buyer is willing to pay is based on two basic calculations: the calculation of the future cash flows of the asset or enterprise, and the risk (reliability) of those future cash flows."

So chase those big fish, but remember the small to midsize merchants can help you achieve a balanced, profitable portfolio.

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

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Spotlight Innovators:

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