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Table of Contents

Lead Story

A sense of community

News

Industry Update

SCA proposes alternative to end-to-end encryption

FIS acquisition of Metavante approved

Swiping at interchange reform

Will Google grab NAA micropayment business?

ETA poised for congressional return

Features

The importance of recession marketing

ISOMetrics:
The promise of community banks

Selling Prepaid

Prepaid in brief

Blessings of SaaS for campus card programs

A new drive for prepaid

Prepaid payroll helps Wal-Mart go green

Views

Summer musings on interchange

Patti Murphy
The Takoma Group

How to win a major bid

Ross Federgreen
CSRSI, The Payment Advisors

Education

Street SmartsSM:
Every little bit helps

Jon Perry and Vanessa Lang
888QuikRate.com

Telephone etiquette

Vicki M. Daughdrill
Small Business Resources LLC

ERR, a merchant retention tool

Bob Schoenbauer
Capitol Payment Systems Inc.

Need cash for your business?

Mark Dunn
Field Guide Enterprises LLC

POS forecast: Increasingly cloudy

Dale S. Laszig
DSL Direct LLC

Company Profile

UP Solution Inc.

New Products

POS payment and acceptance in a phone

ZeniusMobilePay and ZeniusMobilePOS
Zenius Solutions Inc.

Multipurpose bar codes

CodeZ QR
Computer Output Print & Internet

Inspiration

Just ask

Departments

Forum

Resource Guide

Datebook

Skyscraper Ad

The Green Sheet Online Edition

September 28, 2009  •  Issue 09:09:02

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Street SmartsSM

Every little bit helps

By Jon Perry and Vanessa Lang

In the summer of 2005, the company we worked for officially went bankrupt. And this was the second time a chief executive officer caused the demise of a company where Jon was employed. Knowing it was time to take control of our lives, we decided to start a business that generated residual income.

First, we researched insurance. Then we began to investigate the bankcard industry, and the rest is history. (We recounted this journey in "Who are you?" our inaugural article for Street Smarts, The Green Sheet, April 13, 2009, issue 09:04:01.)

Like many people entering the bankcard industry, we relied heavily on our ISO to provide the services we offered to our clients. Thank goodness for events like the Western States Acquirers Association's annual meeting; it opened our eyes to other sources of residual income.

Over time, these income streams became substantial. These included gift card, check service, leasing, gateways, equipment and supplies, as well as some less common sources of residual income.

Ultimately, bankcard processing residuals are our bread and butter. Everything we do reverts to adding more processing volume to our portfolio. The additional sources of residual income increase profitability per merchant account and increase retention. Every little bit really helps.

The opportunities for the feet on the street are numerous. However, it is easy for one-man shops to add so many value-added services to the mix that they become overwhelmed and end up with multiple vendors and very few sales. A good rule of thumb is to start slowly.

The building blocks

Of foremost importance is securing a positive bankcard relationship. Your ISO should not only offer the ability for you to piggyback on its preferred vendors, but also allow you to use alternative providers. Then you can begin to add the remaining essentials.

Leasing is a tougher sale today than previously, but it can substantially add income to new merchant level salespeople (MLSs) while they build their residuals.

Gift card and check services are two other essentials. Standardize your pricing for these based on the Schedule A in your contract, and create a process for selling, implementing and servicing clients who select these services. This makes the trifecta of services all industry professionals offer.

We also encourage bankcard professionals to source gateway and equipment providers. Gateway accounts, or online processing services, comprise an area within which you can gain significant residual income.

For a couple of years, we sent our gateway accounts to be set up by our ISO. This was a missed opportunity to build our own source of revenue while gaining powerful control and insight into our merchant processing.

We cannot stress enough that you should source and secure your own relationship with a compliant, cost-effective and technically savvy gateway company. We have utilized eProcessing Network LLC for years and have been exceptionally pleased with the relationship and service.

Equipment issues

Equipment providers are not really a source of residual income. We mention them because they are a source of valuable information, quick delivery and a direct way to handle issues (repairs, refurbished equipment, warranties and so forth).

Having a dedicated account manager for your equipment needs helps in creating a lean environment where you can purchase equipment only when needed, therefore reducing inventory, and ensuring that you don't end up with 500 noncompliant terminals. (Oh, and they will sell you that one random cable you needed yesterday.)

Many times sales professionals buy equipment from their ISOs, which download the terminals and send them directly to merchants. This is an extremely useful tool, although we have never utilized this service for two major reasons: loss of control at the point of install and loss of revenue.

A successful install can result in a client for life. A bad install or lack of hands-on training can shorten the life span of your merchant account. When an MLS is on site and trained properly, asking for referrals and dropping by satisfied clients' neighboring businesses results in more accounts.

Also, we are never shy about charging for our time and effort. Managing your equipment process allows you to charge a setup fee.

Lastly, this experience is valuable in helping you understand how a terminal or software program operates. Being able to quickly troubleshoot when a customer calls adds tremendous value to you as the bankcard professional.

The service difference

By now having, at a minimum, the above processes in place, you can call yourself a full-service merchant service provider. So what? We ask businesses every day, What makes you different from the rest? It is not being a one-stop shop for electronic payment processing; we all strive to do this.

In truth, when merchants are presented with two offers containing virtually the same product or service, they will buy from the person they feel they can learn from. And although we don't buy into the notion of the bankcard business being a commodity, that characterization is not far off. The goal is to avoid selling on price or trying to match low-ball quotes that merchants typically don't understand fully. So challenge yourself to truly listen to what else your clients are asking for. Our clients asked for help with Web design and hosting.

We already had the skill sets on site, so that was easy for us to provide. But it would not have been hard to develop a relationship with a company that focused on Web site development.

Our customers asked if we could help increase their visibility; we implemented our Social Media Bootcamp, which teaches business owners and marketing professionals how to leverage social media.

Our clients asked how we could reduce their costs; we implemented POS systems (sure we knew they were asking for lower rates). All of these value-added services have one goal: to capture and retain bankcard processing volume.

To qualify for our Web site development program, an individual must have an active merchant account on file. Also, attendees to our Social Media Bootcamp see "Merchant Services" about 20 times during the seminar (they also have a front-row view of our online customer testimonials).

Jon is our technology guru; Vanessa is the same for process improvement - what is your skill set? How can you take your intellectual property and turn it into money? On GS Online's MLS Forum, ccguy stated, "Get creative, sell ACH, sell software, sell gift cards, but sell something along with the processing." We couldn't have said it any better.

Jon Perry and Vanessa Lang are the owners of 888QuikRate.com, an ISO based in Ft. Worth, Texas, that was named Small Business of the Year by the local newspaper, The Star Telegram. For more information, tweet them at http://twitter.com/dfwcard, comment on their blog at http://merchantservices.cc or visit their profile at http://linkedin.com/in/jonperry or http://linkedin.com/in/vanessalang. Alternatively, you can contact Jon and Vanessa by phone at 817-857-3557 or by e-mail at jon.perry@888quikrate.com or vanessa.lang@888quikrate.com.

Notice to readers: These are archived articles. Contact names or information may be out of date. We regret any inconvenience.

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