Nine years ago, David Brewer, President of CSA Business Solutions in Acworth, Ga., was a finance manager for an automobile dealership when a friend from Atlanta - realizing Brewer's job left him no time off for holidays or family - offered him a sales position in the payments industry. Brewer knew nothing of the business, but residual income and flexible scheduling appealed to him, so he accepted the job.
In 2002, Brewer started Credit Services of America Inc., doing business as CSA Business Solutions. He had a full staff and leased a suitable building, but overhead and payroll expenses decimated his profits.
Late one night in 2005, Brewer had an epiphany. He let his entire staff go, refurbished his basement into a home office and became the company's sole employee. He has since expanded CSA's footprint nationally through virtual sales avenues.
CSA is a registered ISO with Best Payment Solutions Inc., a division of National Processing Co. The business is also an agent of United Bank Card Inc.
The Green Sheet: What has been the most challenging aspect of the payments industry for you?
David Brewer: I would say changes in buying habits. When I first started, you could make a living just off terminal leases. Jared [Isaacman] at United Bank Card rocked that world when he started giving terminals to merchants.
I resisted the new trend at first, but decided to give it a shot. So I signed on with UBC and have been giving terminals to merchants for about two-and-a-half years.
GS: What unique aspects of your sales approach have helped you evolve and continue to increase revenue streams?
DB: I just listen to people, and I think that's the key to my success. I've noticed that a lot of people, in any kind of sales job, spend more time selling than they do listening to what their merchant is telling them. I believe if agents listened more, they would find a greater return on their time.
Also, customers are getting much smarter. With everything available on the Internet, they are becoming educated in the various aspects of merchant processing, and I use that to my benefit.
GS: Do you have solid methods for generating leads?
DB: When I started, all of my leads came from business license lists and some cold calling, but that's a tough way to do business. I've found great success on the Internet, and our own Web site has been very good to us. We also invest significantly in qualified leads.
GS: Have you realized additional benefits since you registered as an ISO?
DB: The biggest advantage I have seen is that I get to market under CSA Business Solutions. I like having my name out there because we have developed a really good history with our client base, so when people go on the Internet and do searches for us they see we have a very high rating. That's what I take pride in, and it puts me above my competition before I've even talked to my merchants.
GS: How do you get these ratings, and in what ways do they help garner new accounts?
DB: The Internet source we buy our leads from sends out a customer feedback questionnaire after a merchant has been a customer of ours for several months, and these ratings are then provided to potential customers.
Actually, a lot of my competition is my best asset because they tell potentially new clients so much stuff that is just absolutely not true.
Well, these customers are better informed than they're given credit for. They know a lot of what they're hearing is not true, and so when I come in there, I just have to be nice, tell them the truth. They see the ratings, and I get the deal.
GS: In what ways is an ISO's portfolio different from that of a merchant level salesperson (MLS), and how does being an ISO help you increase merchant retention?
DB: ISOs have more control and more flexibility on rates and fees with merchants. When I talk to a merchant I am representing my business. If they ever need anything, they know I will be the one to help them. A feet on the street may be an independent contractor, but still works underneath another ISO's structure. Someone who is not registered doesn't have the full authority to get the same results as quickly.
GS: How has your relationship with UBC helped you professionally?
DB: Forever in this business we made most, if not all, of our money from leasing terminals. The thought of giving away free terminals was revolutionary to me, and I didn't want to mess with that for a long time.
Well, after I'd lost a few merchants [to others offering free terminal placement] I said, you know what? Maybe I need to try this thing out. So I got in touch with UBC and signed up with them.
And the way their program is set up, I haven't lost any income from participating in the free equipment program, so it's worked out really well. I've been on the advisory board for UBC the past two years, and that's really helped me out because you get to have input with what's going on, new trends, new technology, new value adds, things like that.
GS: How has this changed the way you do business?
DB: My life is so much better. I don't have people calling and complaining about the lease costs and lease chargebacks anymore.
GS: Have you been able to recoup lost terminal-lease income with additional return on investment?
DB: Exactly. You're not doing these 30-, 40-, 50-dollar-a-month leases; you're not selling equipment with huge markups anymore. So you don't have angry merchants, and you're able to sell more accounts.
And in the long run, that's where it's at. I mean, would you rather make $1,000 a pop on a lease, or would you rather make $40 or $50 a month for the next 10 years?
Business has changed, and this has far exceeded any of the lease plans I ever had - plus the fact that I personally feel like I'm doing the right thing now with my merchants.
GS: What kind of value added services do you offer, and which of these creates the best revenue streams?
DB: My portfolio has a good mix of gift and loyalty cards, check conversion. And now we are getting into providing comprehensive POS systems for not much more than we used to lease terminals for. I will say that we usually make a great deal more money with check guarantee. Everyone says that checks are diminishing, but my customers don't show it. For me, check services alone pays my mortgage.
GS: How has the industry changed since you started?
DB: In addition to customer buying habits, I would say the biggest change is the way business is conducted today. Technology has had a tremendous impact on the nature of our business. When I first started, I was driving 1,000 miles a week, meeting customers face to face, taking pictures of businesses, installing terminals - all those were physical meetings that had to take place.
GS: Do you see street sales remaining a viable part of this industry?
DB: I think there will always be people going door-to- door and doing rate comparisons because people like that eye-to-eye contact, being reached out to.
Nowadays pretty much 95 percent of my business is over the phone and online, but I know I lose some business because I'm not in their store, shaking their hand. So there will always be that element as a necessary tool in this industry.
GS: What advice would you give MLSs who are thinking of becoming ISOs?
DB: It depends on what you're looking for. A lot of people see my lifestyle, and they see the way that I work, and they say, 'Oh, I want to do that' but then find out there's more work and responsibility involved than they thought. I think an agent needs to get some experience under their belt and know for certain that this business is right for them before they make an investment in registering a business.
I think that selling is a gift, just like being an athlete or a singer. With that said, I think being registered is great for those who decide that the battles are worth it and want to make it a life career.
GS: Talk about one thing an agent should never do.
DB: I'm still surprised, when I talk to merchants, how much they still don't feel heard. Most merchants are contacted by several service providers, but the providers just immediately start talking about rates and costs. Merchants need to feel that their agent is customizing a plan just for them. I tell them I want to be a partner with them, and that works well for me. They seem to like that phrase "partnering up."
GS: Do you have a way of explaining interchange to merchants that makes it easier for them to digest?
DB: Interchange can be anything of hundreds of different types, so I use the analogy that you've got a fruit stand, and you're selling all your apples for $5 a basket. But you buy your apples from half a dozen different vendors and they charge anywhere from $2.50 to $4.50 a basket. That's why you have to sell all your baskets for $5 because you've got to cover the cost of the most expensive basket.
But customers at that fruit stand would benefit more if you sold all your apples for cost plus 15 cents, and that's what interchange does. You've got cards coming in at different rates, but you're never able to see them if you're on a flat rate program, whereas with interchange, when a particular rate comes through, you pay that rate plus a small percentage above that.
GS: Do you use certain methods to ensure account retention?
DB: I try not to overprice my accounts. And I do all I can to listen to a potential customer and provide the best solution for their needs.
One of the cool things about being an ISO is that I sell the product, and the processors provide the service. I am very fortunate to have the best service team in the industry covering my back.
I always tell a merchant that I want to be their partner for the next 20 years. In order for that to happen, three things must come into play. I have to make a profit, and the merchant has to receive good value and great service. If all those things happen, then we'll be together a long time.
GS: Has The Green Sheet helped you build your company?
DB: The Green Sheet is a great tool for an ISO, especially for people new to the business. It keeps you up-to-date with the new trends and tools. Additionally, reading what works for other ISOs can maybe turn a light on for someone.
GS: Why does this career work for you?
DB: You know, I'm a simple guy, and I try to talk to people like I'm just sitting in their living room. I can just be myself. The best part for me is the flexible schedule and, of course, the residual income.
I can take the afternoon or the week off, yet it won't directly affect my bottom line. My quality of life has improved 150 percent.
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