In today's complex payments world, where simple terminals and competitive pricing are no longer enough to attract, let alone retain merchant accounts, industry leaders have emphasized the need for merchant level salespeople (MLSs), ISOs and other payment professionals to transform into consultants who not only provide ever more powerful POS systems, but also offer a host of integrated business services tailored to help individual merchants achieve their goals. A tall order.
With this in mind, we asked members of The Green Sheet Advisory Board to share their thoughts on the following:
Following is a portion of their responses; the remainder will be published in a subsequent issue of The Green Sheet. Thank you to the industry leaders who carved out time in their demanding schedules to share their insights here.
The first point to note is the change in the sales process and culture surrounding the sale. Ten years ago, the ISO sold or leased terminals, sold the lease paper and generally never saw the merchant again. The ISO was usually a W-2 employee or 1099 independent contractor for the processor or acquiring bank. The sales process was driven by the salesperson's tonality, emotion and certainty around the phrase, "I can get you a better rate than you are paying now." ISOs who had those three things nailed down got the sale, because they were better at closing than the other ISOs.
Today, the top acquirers are also the top six or seven card issuing banks, and the salesperson is more likely to be a bank employee. Yes, these banks have sales quotas, but they also have a huge base of small business customers who are banking with them, and when you have the loan, you have the entire business relationship.
Because these are the largest banks in the country, they will typically have best of breed products as well, and are now working with fintechs to enhance their product range and mix in areas like insurtech, for example. Maintaining the customer relationship is paramount for the bank.
Today the emphasis has switched from terminals to point of sale systems that integrate to an accounting package or an ERP solution. There is a lot of talk about working with ISVs, and even today, only half of the ISVs have an embedded payment processing solution, so there is still a lot of opportunity there.
Merchants are more likely to trust their bank than a third party whom they have no relationship with. But sometimes the bank will not have a solution specifically tailored for that merchant vertical, such as integration to payroll, time and attendance; scheduling; job timekeeping; memberships; subscriptions; analytics; and remote location management. One of the latest trends is for the acquirer to offer a small business loan to the merchant and make it easy to apply for it, which is typically a very arduous process for the SMB now.
The salesperson also needs to offer some assistance and explanation around EMV and PCI and security compliance. One example of how not to do this is the poorly handled EMV rollout. The card brands mandated that this had to be done by October 2015. Here we are over two years later and probably half of the merchants have complied, and an entire industry, petroleum, has had their date moved to October 2020. Talk about a credibility gap. Who will believe the next pronouncement from the card brands now?
As far as tools of the trade, this will vary by merchant SIC code. Some merchants will focus on in-store, and others will focus on online, mobile and phone orders. Some merchants will have massive issues with chargebacks, returns and friendly fraud. Some will be focused on an omnichannel solution that will encompass rewards and loyalty. Some will want a payment portal for their B2B customers to get them to pay from their bank account and not with an interchange based product. The salesperson has to understand each merchant vertical to really provide a tailored solution.
As far as the top three qualities, the main quality is to be a good salesperson. This means listening to the customer and thinking like the customer, and understanding the vertical. Most salespeople just want to talk, talk, talk, but the good ones want to listen, listen, listen.
1. As the industry continues to evolve, it is more important than ever that MLSs become true business consultants for their merchants. The top three tools of the trade that are most critical to succeed in payments all reinforce that role:
2. The same tools that have become critical for MLSs are also essential for ISOs. ISOs and MLSs should both be offering these solutions and looking for providers who offer the support necessary for maintaining these technologies, but they have to go beyond just treating integrated payment technology as "another product." To embrace this evolution of our industry it requires a complete overhaul of how ISOs and MLSs approach the market in every respect. 3. The most important goal for any equipment, software, or systems provider is aligning the success of their business with the success of their customer. This can be accomplished by listening to the needs of the market and delivering solutions that address these needs. This goal should be universal among all providers, regardless of the size of the organization or whether it is a start-up or established player in the industry. 4. Understanding the needs of their customer and providing the necessary tools to address these needs in a simple and effective way; offering a complete solution that reduces expenses, improves efficiency, and increases profits for business owners; and possessing knowledge and the ability to educate business owners on cybersecurity and the technology available to help protect their data.
1. The MLS today is far different than yesterday, to say the least. The top three critical tools MLSs must possess to be successful in the marketplace today are as follows:
2. ISOs need to provide their MLSs differentiators to help them win business aside from just pricing. ISOs should be constantly looking to stay ahead of the curve with new offerings that can arm their MLSs with tools and resources to increase merchant acquisition. Ideally, the ISO would have offerings that are proprietary or exclusive to them that are highly beneficial to businesses.
There is nothing like having a product or service a merchant wants, or better yet needs, and the MLS can explain the processing must go through them to utilize this particular product or service. In addition, ISOs must be able to board and service the accounts MLSs bring in without hiccups, which can easily cause hard-earned deals to go south quickly.
ISOs need to have an open-door policy, from upper management on down, for the MLS to reach to voice any issues or concerns. I am a big fan of holding conference calls and roundtable discussions with our MLSs to get their feedback and ideas, which have been invaluable over the years. MLSs are the ones in the trenches so to speak, so it is vital to get their feedback.
3. Hardware and software vendors can no longer afford to be one dimensional and survive in the payment space. They must produce systems that offer a wide variety of functionality that merchants require in the marketplace today. There is no difference, in my opinion, whether you have been around for decades or whether you are a startup. There are many well-funded startups that are changing the payments space as we know it, and the long-term players need to constantly be evolving as well, or they will lose the market share they once had.
4. The three qualities all players in the payments value chain must have are as follows:
1. What top three tools of the trade are most critical for MLSs to succeed in payments today?
2. Do ISOs need the same tools as MLSs, or are other types of aids more essential to them?
Yes, we do. We believe that the same three apply to the ISO-MLS relationships.
3. What are the most critical needs for equipment, software and systems providers? Are these different for long-time payment players than for startup payfacs and ISVs breaking into payments?
Integration is the key. In the endless sea of different types of equipment and multiple system providers, seamless integration, perhaps at no cost to the end user, will set you apart and provide merchants and/or agents with more options and flexibility.
We think that it's critical for a startup company to make a splash quickly. The larger, long-term players can afford missteps here and there as their reputation precedes them and grants some degree of forgiveness. If a startup vendor comes out of the gate with a software or piece of equipment that isn't competitive, relevant and memorable, they may not have a second chance.
4. What top three qualities must all of these essential players on the payments value chain bring to the table to foster success for themselves, their partners and merchants?
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