The Green Sheet Online Edition
March 26, 2018 • Issue 18:03:02
Merger mania, oh how it can hurt
After reading through recent postings on GS Online's MLS Forum, I saw there are real concerns regarding all the large processor mergers that have been taking place. The concept of bigger is better has once again been in the forefront of our industry. I agree that merchant level salespeople (MLSs), also known as independent sales agents (ISAs), should be concerned on many levels.
In following just one story, the Vantiv/Worldpay merger, I was able to pick up concerns that we all face when our processing entity is purchased or ends up purchasing another company. My own processor was recently purchased by a larger entity called Paysafe. Though the intentions of a purchase or merger are generally good, there is always some fallout in managing the integration of the companies, and dealing with differences in company cultures. Fortunately, in the case of MCPS Corporate becoming a part of Paysafe, the MCPS entity remained pretty much intact, and the combined companies initially seem to be working very well together.
Tough questions arise
But what happens when the cultures clash or the sponsoring banks change? What happens to a sales office's customer service and technical support? Obviously, public companies look to save on the bottom line, so whose customer service department gets the axe? And whose call center is terminated? How many tech support people and client service reps lose their positions? Maybe the new, combined headquarters move to the acquirer's current location, and the location of the acquired entity closes down. How does a company that relies on a salaried sales organization, deal with MLSs? Salaried employees and independent contractors certainly are different ‒ and have unique needs.
I have also heard the following questions also being asked:
- Will my sales office Schedule A be amended?
- Who will now be handling risk?
- My current company is great with risk, and they handle merchants in a professional manner, but what about the new company?
- Will risk tighten up, or will certain verticals fall out of favor?
- How will the boarding process change?
- Currently we have an online tool for boarding merchants, but will we have to be trained on a new system?
- If we have to use a new system, what will happen to all the old data?
- Our current sponsoring bank actually funds on Saturday, will the new sponsoring bank be able to do the same?M
And what happens to the salaried sales folks if the new company works more with an ISO model? We became ISAs because we wanted to control as much of our own destiny as possible. As such, we work when we want to work. We price merchants the way we choose to price them. We call on the merchant verticals we choose to call on. We can work with multiple programs and have access to many processors, or ISOs. As a salaried salesperson, your choices are much more limited, and you have much stricter rules to abide by. The question is what is the preference of the acquiring company? Not all companies prefer the ISO/MLS business model.
During the last few weeks, there have been many comments on the subject of the Vantiv/Worldpay merger, and many of the questions I just listed came up. I also pulled ideas from several members of the MLS Forum, including Nerd Crow, dub16, clearent, CardPlayer (identified by their forum handles) and others, and I want to thank them for the intelligent discussions taking place. To participate in these and other discussions of interest to ISOs and MLSs, go to the Forums tab at The Green Sheet's home page, www.greensheet.com, and follow the instructions to join the MLS Forum.
I witnessed a horrific takeover back in the early 2000s when Bank of America took over National Processing Co. In the course of a very short period, Bank of America eliminated most of NPC's customer service department. Hold times went from a few minutes to 1 hour or more. Tech support fell apart. My understanding here is that the combined entity of Vantiv and Worldpay, also will look to the bottom line for savings, and I hope for the sanity of their sales organizations, cuts are thoughtfully planned out.
Yes, during times of mergers, ISO, MLSs and merchants typically suffer from the disruption caused by two organizations when different business structures, practices and cultures combine. It takes much time and energy to combine cultures, call centers and tech support personnel. The representatives one has relied on to solve daily issues may be gone or reassigned. Even actions taken with the best intentions on the part of the merging entities may still have harsh fallout.
I welcome comments from anyone reading this article. Please send comments to either my email given in the bio below, or address them on the MLS Forum. The moniker I use there is Talk to Steve.
Steven Feldshuh, President of Merchants' Choice Payment Solutions East, has 18 years' experience in sales and ISO development. Directly prior to joining MCPSE in 2012, he was President of Payment Partners. In his current position, Steven devotes the bulk of his time to assisting agents in building their portfolios. Contact him by email at email@example.com or by phone at 212-392-9202.
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