The Green Sheet Online Edition

October 10, 2022 • Issue 22:10:01

Sage advice before the year-end holiday crush 2022 - Part 1

Consumers' changing purchasing habits due to the pandemic, along with continued advances in technology, have escalated merchant adoption of digital tools, as well as introduction of innovative offerings from new and established companies in the payments sphere.

To learn how industry leaders are evolving in this dynamic environment as the year-end holiday season draws near, we asked members of The Green Sheet Advisory Board the following questions:

1. Have you established or are you considering new partnerships at this time? Why or why not? If you have pursued new relationships, what unique benefits do you have to offer? And what have you sought to gain from others?
2. What are the best tried-and-true solutions and new products and services you are providing merchants for the coming holiday season? What offerings have been most in demand among your customers?
3. What advice do you have for ISOs, other services and equipment providers, or merchants for last-minute tweaks they can make before the holiday season begins?

This article contains the first portion of their responses; the remaining answers will be featured in our Oct. 24, 2022, issue. We wholeheartedly thank the executives who took time out from their busy schedules to share their knowledge here.

Mark Dunn, Field Guide Enterprises LLC

1. I see ISOs very interested in new relationships in several areas: Cash discount continues to grow with merchants in the Midwest where it has not penetrated as much as in the East and West. Many ISOs are exploring BNPL, CBD and cryptocurrency.
2. Not related to the holidays: ISV and developer relationships, B2B and B2G, bank channel.
3. Eliminate all friction in any part of the sales process. Don't be caught lagging in omnichannel selling. Educate yourself about the integration process, and identify cost savings you can realize by choosing a different processor.

Maurice Greifer, CPP, Maverick Payments

1. We are always seeking new partnerships that we feel will be mutually beneficial for all parties, whether it is with new sales agents or ISVs looking to incorporate a payments component within their software. These strategic partnerships are what fuel our growth, and we love getting creative to establish unique partnerships.
   
   We offer a ton of great benefits to our partners such as white-labeling our proprietary dashboard and payment gateway, zero buy-rate programs, free terminal placement programs, high-risk acceptance with multiple sponsoring banks, ACH processing, seamless onboarding, and our white-glove support.



2. The holiday season is always a great time for merchants and processors with larger volumes processed. However, the downside is the chargebacks that follow after the holidays. For ecommerce, where we really excel, the inquiries heading into the holiday season are usually surrounding fraud prevention and chargeback management.
   
   One of the best solutions for merchants is simply offering better customer service. Merchants should make it very easy for their customers to get in contact with them whether it is through email, phone or even live chat on their website. Many merchants can prevent unnecessary chargebacks during the holiday season just by upping their customer service efforts.
   
   Furthermore, I don't think that the typical AVS settings in the payment gateway are enough to prevent fraud anymore. With how sophisticated fraudsters are, merchants really need more advanced fraud screening and, ideally, a service that also offers chargeback protection or guarantees.
   
   One product that I really like and always recommend is called NoFraud. For high-volume merchants, we are seeing lots of success with adding Visa RDR to lower chargeback ratios. Our Maverick dashboard has Visa RDR reporting built in, making it very easy to manage this to track performance. RDR has been the most popular chargeback related product for us of late, so I anticipate more and more merchants will be adding this heading into the holidays. Aside from chargeback management, tools that can help merchants increase conversions and AOVs are also a topic of many conversations heading into the holiday season. Merchants want to capture as many sales as possible and, especially if they are spending a lot of money on ads these next few months, they want to maximize their ROI.



3. For ISOs and sales agents, I think it is incredibly important to stay current with all the latest and greatest industry trends and software. Our industry is constantly changing, so I would analyze your portfolio to see where value can be added for merchants and, in turn, you can increase revenue with your existing merchant base by proposing new products and services.
   
   It never hurts to just ask either, so touch base with merchants to see how they are preparing for the holiday season, and find out if they have any questions before they get too busy. You never know. You may get some good ideas to share with other merchants.
   
   Merchants should always be proactive rather than reactive. Now is the time to analyze your payments setup to see where things can be optimized, whether it is to increase conversions, increase AOVs, or better protect against fraud. Ironing out the kinks and having enough time to test new software or processes before the busy holiday season will set you up for greater success. Nothing is worse than trying to make big changes during Black Friday weekend.

Allen Kopelman, Nationwide Payments Systems Inc.

1. I think the payfac model is going to grow, and it is going to grow over the next few years. If Congress takes action against interchange, it is going to cause companies to do a major overhaul. Software companies more and more are making deals with ISOs, banks, etc., to offer payment processing directly, and that is going to continue.



2. Right now, merchants are trying to hang on and survive under tough conditions in the economy. We also have a Congress that does not understand how business works, and the rules and taxes they are imposing are making it more difficult to do business. I think that many businesses are leaning towards surcharge, dual pricing and cash discount models for pricing. Also, many merchants are looking for ways to use technology to help with labor problems. I expect that in the next year many businesses will want to put in kiosks to offer self-service in one form or another. The fast-food industry has changed to kiosks, ordering through an app, curbside pick-up and more.



3. ISOs, agents, etc., might want to start contacting your local person in the House of Representatives and in the Senate to stop some of these bills that are floating around. One is trying to add a 3.8 percent tax to small business owners. Another is Durbin 2.0. These are both dangerous bills to the people in this business and to our customers.
   
   Another thing that is going on is the rise of alternative payments besides credit cards being used at many businesses. This trend is going to continue and get bigger and more popular, and if Durbin 2.0 passes, those companies are going to swoop in and take more and more market share away from merchant services.

Dustin Magaziner, PayBright

1. PayBright is always looking for new partners, as the company is built on great partnerships with agents. We are a relationship business. We help our sales partners build their relationships, which will flow to PayBright: their success is our main focus.



2. One simple answer: gift cards. Gift cards dominate. There are several types, including physical gift cards, e-gift cards and online gift cards. If you're a business owner and not offering gift cards, it's costing you money. Gift cards deliver a spike in sales, with a dramatic rise between November and December. Customers also tend to spend more when they are given gift cards as gifts. 



3. Think ahead, plan ahead. It's important for businesses to plan for the holidays earlier than they think necessary so as to avoid surprises. For one thing, if an ISO offers gift cards, make sure that they explain to their merchant customers that they need to be designed and shipped weeks before Black Friday.
   
   Also, merchants need to plan for any staffing issues way ahead of time. Some staffing issues might be unavoidable, but in order to have a strong selling season, contingency staff must be recruited and trained sooner rather than later.

Justin Milmeister, CPP, Elite Merchant Solutions

1. Starting from day one of being in business, Elite Merchant Solutions has always looked for new strategic partnerships, and that has not stopped over two decades later. Our staff is constantly attending tradeshows and combing through trade publications to find new partnerships that will keep us on the cutting edge of technology and provide our customers with unique products and services.
   
   We are always looking for partnerships that have better functionality than what we offer today for our core products. Additionally, our company seeks partnerships that offer unique capabilities that will benefit our sales force, which in turn will benefit our mutual clients. Partnerships we have recently added give merchants bundled services that are designed to increase their sales through marketing, competition analysis and branding, to name a few.



2. The best solutions we have found over the many years in business certainly would not be considered anything cutting edge; however, it has worked like a charm in preparation for the holiday season. We sort our client list with several factors to determine the most impacted merchants during the holiday season; then we assign a number from 1 to 5 to each merchant, with 5 being highly impacted during the holiday season.
   
   Our staff communicates with all merchants with a 3, 4 or 5 assigned to them and offers various assistance in preparation for their busy season. The most utilized offer we provide is extra point of sale terminals or wireless devices to allow these busy merchants to get customers checked out as quickly as possible, thus increasing sales and decreasing frustrated customers.



3. Preparation and anticipation are the key to running a successful business no matter what type of business you run. The payment processing space obviously plays a vital role in holiday season shopping.
   
   The last thing busy merchants want to do is be on the phone with their processor because of equipment malfunctions, funds being diverted and long hold times for anything. At the very least ISOs should maintain some excess inventory so they can immediately rectify any equipment malfunctions or supply shortages, and get them to the merchant as quickly as possible.
   
   Sales reps that are new to the industry should be alerted and prepared to be on call during the holiday season after hours because stress is high, and when things go wrong merchants want and need answers quickly without having to dial up a 24-hour helpdesk. Merchants should have their sales rep's contact information and feel comfortable to call them, so they can rectify and expedite any situation that may arise during the busy holiday season.
   
   Merchants—especially newer ones that have never experienced a holiday season, especially post COVID—need to really anticipate heavy crowds and have the staff and inventory to fulfill the orders and make the customer experience a positive one. The holiday season can represent a very high percentage of annual sales for some merchants, so this opportunity needs to be seized.

Everyone knows there are supply shortages, so this needs to be anticipated when at all possible, so you don't miss out on sales due to lack of inventory. I recommend ordering more than you normally would and farther in advance, so you are ready to cash in during the holiday season.

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