What about so-called objective statement analysis?
One of my merchants was approached by a rep for an outfit that claims it doesn't offer card processing but can negotiate with the merchant's current processor to lower rates. I found out about this because I called the merchant to check in the same afternoon he got the call. I wonder if companies like this are legit, or if they've just found a different angle to use in getting merchants to sign on the dotted line.
Barton Molinelli
Merchant Level Salesperson
Barton,
Companies exist that claim to be objective third parties aiming to save merchants money on processing costs. Some do an analysis with an eye for improving efficiencies on the merchant's end. For example, sometimes transactions are downgraded unnecessarily, and by flagging those transactions and adjusting the merchant's system to properly categorize them, the merchant can save money using the current processor.
Some third-party companies reportedly partner with ISOs to offer this service, which, to our knowledge, doesn't typically involve negotiating with the merchant's processor but could necessitate communicating with the processor about system and platform parameters.
However, some reps that describe their services in a similar way are actually just merchant level salespeople (MLSs) trying to win new business. Now, there is nothing wrong with asking to examine a merchant's statement so you can come up with a competitive bid (although many in the business feel this price-based approach is outmoded and should be replaced by focusing on tailored services that will enhance a merchant's business in some way).
But MLSs masquerading as independent analysts are being dishonest when they claim their sole objective is to save merchants money.
We've heard of merchants who have fallen for this type of pitch and become locked into long-term contracts that cost them significantly more than their prior processors did. Sometimes the source of the dishonesty is the MLS, sometimes the ISO and MLS are co-conspirators in the scheme, and sometimes the ISO is shady and the MLS is too new to the business to realize it.
Fortunately many ISOs and MLSs are in the business for the long haul, have scruples and follow best practices in all their dealings. And some companies that claim to be independent third parties actually are. The challenge is to distinguish between the good and the bad, and the only way to do that is by conducting due diligence.
Ultimately, the best way to keep merchants in your portfolio is to keep in touch, as you are doing, stay abreast of the latest developments in the industry, choose your partners wisely and provide the best service you can.
Editor
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