By Jeff Fortney
Editor's Note: We are delighted to welcome longtime contributing writer Jeff Fortney, who also penned Street SmartsSM from April 2012 through March 2013, as author of this column. He stepped in without hesitation when we asked if he'd give it another go. With his breadth of knowledge and years spent mentoring countless merchant level salespeople through the transformations the industry has undergone, we can't wait to see what guidance he will share as we face the inevitable changes to come.]
It's been eight years since I last put pen to paper under the Street SmartsSM name, and I am honored to be asked to do so again. Much has happened since I last wrote this column, and much has changed. Back then, I spoke of the industry's constant evolution and what I expected. I am not, nor have I ever claimed to be, Nostradamus, so my goal at the time was to help people sell while our industry evolved.
I spoke of the trend toward large company mergers. Many ISOs were approaching the date they had set as their exit strategy date, and they were looking at their options. Many discussions centered on the fear many merchant level salespeople (MLSs) felt about the impact of these ISO's sales on merchants (and indirectly on their personal income). Also, the fact that many processors were migrating toward independent software vendors (ISVs) as a reseller channel in lieu of independent agents, reduced the options MLSs had in partnering with a solution.
In addition to the unknown fate of their portfolios, ISOs and MLSs also grappled with change in how and what they sold to merchants. We discussed how the prevailing marketing strategy at the time (show me your statement and I will save you money) would not survive as a viable option. I offered alternatives to that race to the bottom, approaches that made the price a component of (and not the central factor) of selling. Despite all these discussions, industry people were quietly afraid in 2013.
Since that time, the identified pressures did not abate; they grew instead. Along with events that impacted us directly, the technology associated with the payments industry also continued to evolve. The growth of cloud/SaaS-based solutions along with the end of life of many popular terminals changed what we sold, and to whom. The reduced costs of this form of POS opened up markets that wanted a POS but were not able to pay for high costs of server-based solutions.
With these changes, several ISO and MLS partners chose to exit the ISO channel and concentrate solely on these ISV opportunities.
Change, even if it moves slowly, is often scary. It can make people anxious, and that anxiety impacts selling success. Many MLSs from that time could not or would not adapt, and have since left the industry. But, looking back, it's clear we who stayed in the business adapted to the changes within our industry. We had no choice.
And we found ways to thrive. We found opportunity in cloud-based solutions for small to midsize merchants. We found new markets and new ways to generate revenue from those markets. It didn't hurt that demand for card acceptance increased as consumers migrated away from cash and checks and chose the easiest means possible—electronic payments.
Yes, even with the evolution over these past eight years, it is clear that the payments industry continued to grow, along with those who adapted (either on their own or with the help of trusted advisers) and found the success and rewards our industry still offers. Which brings us to today.
One of my favorite sayings (and one that has helped me through the years) is by Santayana: "He who does not learn from history is doomed to repeat it." In many situations, knowledge of historical events have helped people analyze and react to similar events that occur today. Even in the payments world, perspectives on past events have helped us manage current events.
For example, the 2008 Great Recession was extreme, with merchants failing—and whole industries falling apart. Yet to aid our survival, we could look back at other recessionary periods that had occurred since 1976. From them, we gained knowledge about what to expect, what to avoid and how to approach businesses during a downturn in the markets.
Santayana's statement provides little help or direction with what hit us all in March of 2020.
Although we expected the industry to continue to evolve, we had no way of knowing, predicting or even preparing for what we all faced over the past year plus. There was no warning, and the suddenness of pandemic-induced closures impacted all of us—both professionally and emotionally.
These two impacts are not separate, as our emotions were hit by worry about the disease and by the impact on our profession. We all felt the serious drop in residuals. Those who reached out to their merchants witnessed emotions rising in merchants, who not only feared the disease, but also feared that they would not be able to re-open. For many, that was a self-fulfilling prophecy.
As the closures continued, many MLSs tried new ways to market with limited success. The most common effort was telemarketing. But even those who were professional telemarketers will attest to the difficulties of reaching merchants let alone talking with them about any form of processing. It reached a point where signing merchants became all but impossible for some. I worked with many such agents, encouraging their efforts toward retention if they could not find merchants to sign.
We worked day to day, making no plans (since we didn't know what tomorrow would bring). It was not possible to hold anyone to a production plan if there was no production to be found.
As time passed, I realized that, to survive, people were changing their habits. Restaurants found success with curbside pickup. Consumers were having more goods delivered than ever before. And these new habits weren't turning out to be temporary. We were experiencing a new normal.
For the remainder of my time writing for Street SmartsSM I will address this new normal. I will discuss what I have observed, what I have done and what others have done. My goal is to provide information and perspectives from the three primary sides to our business: consumer, merchant, and ISO/MLS.
One of my other favorite quotes is by Thomas Edison, "Opportunity is oftentimes missed because it comes dressed in overalls and looks like work." Opportunity is here for us in today's new normal. We just need to pull on our overalls and get to work.
Jeff Fortney is vice president ISO relations for Signature Payments. A long-time payments industry executive and mentor, Jeff is focused on strengthening and developing partnerships and evaluating new business opportunities. He can be reached at 214-458-1379
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