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The Green Sheet Online Edition

September 11, 2023 • Issue 23:09:01


Payments, a retrospective
Racing to the top

Remember when you had to sell merchant level salespeople (MLSs) on the concept of consultative sales? A decade ago, many excellent reps did this type of selling as a matter of course, but countless MLSs entered the field with one goal in mind: selling on price. They'd ask for a merchant's statement, compare pricing and offer what appeared to be a better deal than the merchant's current processing agreement.

"What ISOs can learn from consultants in today's complex payments arena," published in The Green Sheet on Nov. 12, 2012, explored this topic in depth, stating, "As payment technology matures, retailers are searching for acquirers who can provide them knowledgeable advice in areas as diverse as POS equipment requirements, payment software options, new payment channels, mobile solutions, marketing, security, liability and business strategies. ISOs are responding to this demand by adopting consultative sales models that build merchant relationships and capture payment transactions by providing data-centric business strategies, solutions and services."

At the time, fears of disintermediation were rampant due to the rise of disruptors dazzling the market with offers of so-called free, easy-to-use POS systems or no interchange fees. Mustafa Shehabi, co-founder of PayCube Inc., told us at the time that ISOs were indeed concerned their services and offerings would be ignored. The consultative sales model, he noted, offers ISOs the best opportunity to compete in "the new payments environment" because it allows ISOs to partner with merchants as they integrate new payment channels into their POS offerings. This new and sticky ISO-merchant relationship, he added, makes sales organizations less likely to fall victim to disintermediation. Still, many sales reps resisted change. They used the same strategies and tactics that had brought them success in the past. We continued to publish articles extolling the value of consultative sales.

Then, partly due to rapid advancements in technology that made it much easier to offer merchants tailored, full-featured turnkey systems that handled far more than payments, and partly due to widespread realization that consultative relationships were typically sticker relationships for a host of reasons, a mindset shift occurred. The need to promote consultative sales was no longer pressing. For many ISOs, consultative sales became the norm. New agents entered the field prepared to listen, learn and provide easy-to-use integrated solutions that made many aspects of doing business easier for merchants and others who accepted payments.

I expect some in the industry are still looking for a quick buck and selling on price. Allen Kopelman even posited in "How low can merchant services go?" published June 24, 2023, that there is a new race to the bottom: "It was bad enough to see desperate agents driving down processing pricing, but now it looks like the race to zero doesn't stop at zero," he wrote. "These desperados have gone from giving merchants a deal of a lifetime to paying them to take these deals off their hands." Not exactly a sustainable business model. I like to think plenty of us are striving to race to the top, sharing our know-how and wisdom along the way. Do you agree? end of article

The Green Sheet Inc. is now a proud affiliate of Bankcard Life, a premier community that provides industry-leading training and resources for payment professionals. Click here for more information.

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