By Jeff Fortney
Clearent LLC
There are hundreds of light bulb jokes, all based on the theme of how many people it takes to change a light bulb. Most such jokes are crafted to lightly poke fun at a certain group of people. Here's one you may have heard before:
How many computer programmers does it take to change a light bulb? None; it's a hardware problem.
Since I am Lutheran, my personal favorite is one that I find pertinent to our industry:
How many Lutherans does it take to change a light bulb? What? Change?!?
Change is constant in the payments world. Contrary to an often repeated axiom, the more things change in our industry, the more they continue to change. They never stay the same.
As we approach the fourth quarter of 2013, it's evident that disruption has been an ongoing topic of discussion throughout the year. Ranging from Europay/MasterCard/Visa and mobile wallets to lawsuits and the Durbin Amendment, these topics have created consternation in our industry. There's no doubt about it: transformation is coming.
Now before you panic, let me add a caveat. Our industry is constantly evolving. There hasn't been a year in the business in which nothing has, at the very least, been refined or tweaked. Also, keep in mind that reorganization is not a bad thing, nor does it always impact everyone. In some cases, evolution presents opportunities.
That being said, I believe it's important to address the myths of change. These are sayings and suggestions on how to handle change that can – and will – impact your sales success.
In today's "always on" society, anything that could possibly involve the payments industry is often perceived as a factor that could redefine how we do business. In many cases, the potential disruptor is not fully understood, which feeds peoples' fears.
However, before you worry about an issue that may or may not alter the payments industry, make sure the potential change is relevant to you. For example, should you concern yourself with the effects the Durbin Amendment will have on ATMs if you don't sell or place ATMs?
Even if the issue seems relevant, revamping aspects of the payments industry usually takes months or years. Yes, you should research any new development and determine its likely impact to your business, your merchants and your sales practices. But remember, in these instances, time is your ally because simply put, change takes time.
In the world of technology, the term for those who are always first in line for the newest gadget, smartphone or computer is "early adopters." They want the newest products and are willing to work through any small kinks that may need to be updated later on. They're proud to own the latest and greatest gadget, and they don't see necessary updates as a nuisance.
Certain merchant level salespeople (MLSs) are like these early adopters. They want to be the first to market a product, solution or innovation that can be leveraged to help them sell.
It is often said that anything that can be leveraged to increase sales is a good thing. However, if the new product, service or procedure needs to be tweaked, updated or has not been fully vetted, your income could be adversely affected by glitches that arise – so could your reputation with merchants.
Remember, although historically pioneers were regarded with great respect, the majority of them died before reaching their destinations. Generally speaking, it's safer to be the second person to tread down a given route. The same normally holds true in the payments world.
This is a common misconception because many new developments appear to have an equal impact on all players in the industry. A prime example is the Fixed Acquirer Network Fee (FANF) imposed in 2012 by Visa Inc.
The fee calculation was complex, but it was the same for all processors. Yet some processors had to back-bill due to system restrictions. Others didn't have any challenges and were able to implement the fee without any issues. The impact of FANF implementation on MLSs and their merchants varied as a result.
The key is to understand new initiatives and their direct effects on you or your merchants. When advised of a change, ask if it's specific to your partner or is universal to the industry. Finally, ask what effort you are required to put forth to roll out the program to your merchants.
As soon as they see a reference to an upcoming industry modification, many MLSs immediately want to know all the gory details and the timing. They want to understand everything that will or could possibly be affected – either directly or indirectly. Some MLSs solicit opinions from others about the potential impact of the change, even though it may not yet be clearly defined.
These agents strive to be their merchants' trusted advisors, which is why they want all of the details. However, few people, if any, know everything about the payments industry, and this is to be expected. When a major change is coming down the pike, having a high-level understanding of the situation is often sufficient.
Remember, fear is the most common initial reaction when change looms in the payments sphere. This is because transformation can and does impact business revenues and prospects. So, be careful. Fear can be crippling and have an immediate impact on your sales efforts. If you understand the myths and manage your fear, you can continue to grow your business when the industry is in flux.
This is not to say that you don't need to evolve with the industry. It just means you don't need to panic and make rash decisions before the dust settles. Step back and make sure you have a general understanding of what's ahead, and don't forget to turn to your processing partner when you need more information.
Jeff Fortney is Vice President, ISO Channel Management with Clearent LLC. He has more than 17 years' experience in the payments industry. Contact him at jeff@clearent.com or 972-618-7340. To learn about how Clearent can help you grow faster and go further, visit www.clearent.com.
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