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Table of Contents

Lead Story

2015 in review

Patti Murphy

News

Industry Update

Target to pay $39 million to MasterCard issuers

FTC kills telemarketers' remotely created payments

Mobile tech drives global holiday spend

Black Friday lives on amid expanding alternatives

Features

Redesigning financial services for Millennials: A conversation with Max Levchin, co-founder and CEO of Affirm

U.S. EMV - outside looking in

China on mobile fast track

Views

Tools of the tradeoff

Dale S. Laszig
DSL Direct LLC

Will new payment schemes bump card brands aside?

Ken Musante
Eureka Payments LLC

Education

Street SmartsSM:
What does the crystal ball say for 2016? - Part 1

Jeffrey I. Shavitz
TrafficJamming LLC

EMV liability shift: Who's liable for what - and when?

Allen Friedman
Ingenico Group

Now more than ever, managing e-commerce risk matters

Kirsty Tull
BillPro

Company Profile

Benseron Information Technologies Inc.

New Products

All-in-one Android POS for small business

Sircle POS
Sircle POS

Versatile mPOS solution for all

Infinea
Infinite Peripherals Inc.

Inspiration

Realize your potential

Departments

Readers Speak

Letter from the editors

Resource Guide

Datebook

Skyscraper Ad

The Green Sheet Online Edition

December 28, 2015  •  Issue 15:12:02

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Street SmartsSM

What does the crystal ball say for 2016? - Part 1

By Jeffrey I. Shavitz

2016 is rapidly approaching – where did the year go? If you held a crystal ball in your hands, what do you think it would reveal for payments in 2016? Curious about what GS Online's MLS Forum members expect the future holds for our sphere, I asked them the following questions:
  1. Do you still believe we are a great industry for you to continue to make a good and growing compensation?
  2. Would you promote a person graduating college to enter our space?
  3. Can you share (without divulging any company secrets) if you plan to market you and your company differently in 2016 than the past few years?
  4. Any other comments (general or specific) would be appreciated about the future of our business.

In this first article in a two-part series, I'll share a portion of the responses I received to these questions. In the second article, I'll share further answers to the questions above, as well as thoughts members shared in response to additional questions I posed in the MLS Forum about their business plans for the coming year.

Industry outlook

Forum member Clearent started the discussion with the following comments: 1. Do you still believe we are a great industry for you to continue to make a good and growing compensation?

"Having been in the industry a long time, and lived through many evolutions, there has remained one constant: the ability to make and maintain a healthy income return for a person's efforts. The key is to adapt with the changes," he wrote.

2. Would you promote a person graduating college to enter our space?

"This is an interesting question, as I don't think the payment industry is for everyone," Clearent stated. "I know many college graduates who have failed, and nongraduates who have had great success. I would encourage anyone who has an outgoing personality, a thick skin, and a desire to work hard and see results for your labor."

3. Can you share (without divulging any company secrets) if you plan to market you and your company differently in 2016 than the past few years?

"2016 is a watershed year," Clearent said. "With no EMV to sell (on which many hung their hats) or any other supposed deadline imposed, many are going to have to adapt their approach. I would hope that the primary approach doesn't default back on 'save you money.'"

4. Any other comments (general or specific) would be appreciated about the future of our business.

"I see more and more agents starting to recognize when fees have been padded, as I know merchants are also recognizing it," Clearent said. "It's time to evolve your approach, to recognize the new paradigm – merchants who have lost respect for the industry, but need us for their success. Let's earn that respect back."

Evolving demands

In response to the first set of questions, jotucker1983 offered the following thoughts:

1. Do you still believe we are a great industry for you to continue to make a good and growing compensation?

"For the experienced person, yes; for the rookie/green person just starting out, I'm not sure," he posted. "I believe the industry has and will continue to shift to more complex solutions that address more complex problems, so we are talking about new retail technology integrations, advanced security, fraud and risk management, among others. These solutions and the processes that accompany them aren't as 'simple' as the traditional process of obtaining last month's statement, coming up with some 'savings,' then recommending which free terminal the merchant should select based on their needs.

"That process was a much simpler one, but now that merchants are pretty much okay in that area, the MLS/agent going forward is going to have to morph into more of an IT consultant/expert as well as a risk management expert, within the complex solutions that he will be providing. This is great for people with experience, horrible for those looking to start out because the learning curve is deeper."

2. Would you promote a person graduating college to enter our space?

"Yes, but that's the thing: I think our industry honestly does way too much recruiting that just creates an overcrowding of people on the telephone with merchants pushing free terminals or rate savings," jotucker1983 stated. "I think the industry needs to shift to focusing on complex problems with complex solutions, thus not recruiting just 'anybody' with a pulse anymore, but recruiting specialized sales professionals instead, no matter if they have a college degree or not.

3. Can you share (without divulging any company secrets) if you plan to market you and your company differently in 2016 than the past few years?

"Yes, I've been just a one-man show since January 2007, and I'm currently going through restructuring to expand my reach, influence and market sector targets," jotucker1983 wrote.

4. Any other comments (general or specific) would be appreciated about the future of our business.

To this question, he posted, "My opinion is that it's not going to be like it used to be. Companies used to hire 500 random people, throw them a couple free terminal brochures and some conversion bonus tiers, then randomly send them out to call people out of the Yellow Pages or park their car down the street and randomly walk into someone's business. That strategy is dead.

"The reason it worked was because before the free terminal craze, a lot of merchants still didn't either accept payments or didn't understand pricing enough to where you could provide real education on payments and pricing (value).

"Then once merchants, for the most part, became aware of payments and the pricing, the free terminal craze was next, which was to 'reveal' to merchants the next secret in that their terminal wasn't really worth the $2,000 they were paying to lease it. But both of those strategies are now dead.

"I believe the future of 'payments' won't even be 'payments' anymore; the future is going to be advanced technology solutions that address our ever changing 21st century business marketplace. 'Payments' will more than likely integrate into such solutions, but the integration will include a vast array of other services from financing, to payroll, to marketing, to inventory, to HR, to accounting, to legal, to research, to fraud management, to insurance, to risk management, etc.

"More complex problems and complex solutions … are going to require more professional salespeople, not the guy that's been 'typically' recruited into our industry from the Burger King drive-thru based solely on the fact that he has a pulse."

Increased diversification

Forum member maketelinc joined the discussion, stating, "The advantage of this industry is, if you plant a tree, you reap the fruit. However, if you don't prune, water, mulch, and sometimes spray and net your tree, there may eventually be little to no fruit to reap. You may be able to come back and restart all over, but you will miss out on some years.

"In a way this industry is similar, but it seems as if there are new varieties of beetle every year, so you really have to research and find the new pesticide which works, and sometimes you just don't get it in time.

"That said, this business is tough in another way: there is no vacation; you must be available all the time. If your merchants call you, you'd better be there, lest someone else beat you to their place. Being so, it is hard to add new products and skills, unless you are prepared to experiment at the merchant's expense."

Thus, maketelinc would relish the opportunity to take a sabbatical. "The question is, if you hired a manager for a year, what would be left on your return?" he wrote. "You would be fresh and able to adapt to new stuff, but you may not have too much left. Even if you employ people, you still need a hands-on approach and to be there for your merchants.

"I think by now most of us (at least the older ones) have diversified: one guy here had a pizza store, another a cigar bar, others real estate. I must admit I, too, have land with quarries and different types of stone, which I will sell to any of you by the truckload only. (I decided not to service the retail market for now).

"With Internet and mobile phones, you could still manage most of your business from your hotel room. With the new Pax you could even have a machine shipped and program it from your computer, add TeamViewer, and you could literally operate on your office computer from anywhere in the world. Nevertheless, you get no break, you get no real relaxation, and if you do, it may mean your business isn't doing well.

"I must admit that I did spend a lot of my time on my new venture as opposed to getting new accounts, but come winter my new business hibernates. I will get back to new accounts again, and the new business makes new connections in new geographical areas, a potential for new merchants too.

"I guess another important thing here is to be connected, available and trusted. I may add it may pay to diversify, too."

After reading the questions and answers, forum member G. Cancryn was inspired to say, "Treat people fairly. Make the extra effort. It's a job, you have to go to work every day and not be distracted. Realize that good relationships and good fortune and good luck play a big part. It's your life; don't make money the only priority. Work hard. Don't count your money; count your successes. I vow to work harder and smarter in 2016."

Further input welcome

I hope you found these perspectives to be helpful to you as you articulate your strategic vision for 2016. Some of the additional questions MLS Forum members will address in the next article are:

  1. What is your plan for 2016?
  2. What will you do in 2016 that you didn't do in 2015?
  3. Did you feel you accomplished your professional goals in 2015? (Personal goals are also very important so don't forget to include them in your planning.)
  4. Do you plan on prospecting to a unique industry type in 2016?

I'd love to include your perspectives in future articles, as well, dear readers. You can respond to questions in the MLS Forum or email me at jeff@trafficjamming.com.

Happy Holidays!

Jeffrey I. Shavitz is Chief Executive Officer of TrafficJamming LLC, which is a virtual business group for entrepreneurs and small business owners to help grow a company's sales (traffic = customers in his language). His experience in payments includes co-founding Charge Card Systems Inc., which was sold to Card Connect in 2012; Alternative Merchant Processing, dedicated to high-risk merchant processing; and Charge Card Funding, involved in the cash advance space. Jeff has published four books: Size Doesn't Matter — Why Small Business is Big Business, which became an Amazon No. 1 top release in both the business and entrepreneur categories; Small Business Aha Messages; The Power of Residual Income – You Can Bank on It!, and Networking – Get Connected. He can be contacted at 800-878-4100 or jeff@trafficjamming.com; his websites are www.jeffshavitz.com and www.trafficjamming.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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