rnie Crews of the ISO MLS Direct Network of Southern California has only worked in the payment processing industry for three years; however, he understands its intricacies like a seasoned bankcard professional. In only a short amount of time, Crews became a managing partner with his ISO and built a network of sales agents around the country. In this interview with The Green Sheet, he discusses the importance of receiving proper training and using connections from past business experiences.

The Green Sheet: What brought you into this business?

Ernie Crews: It's kind of interesting how I got started. My wife one day brought me home a business opportunity. It was with a company called National Bank Drafting Services. I inquired about their business ... and I invested $25,000 to do bank drafting. About a year later the company sold.

I discovered during that time frame electronic payments. That kind of led me to researching a little bit about the credit card industry, and along the way through search engines, I found The Green Sheet ... lo and behold, there were a lot of people that were looking for folks to go out and sell credit card services.

I interviewed at least a dozen, maybe more, potential companies to become aligned with. I didn't know anything about this industry and so that probably eliminated some [of the companies] because [they] were looking for seasoned agents or reps.

GS: What is your background?

EC: I've always been kind of an entrepreneur, you might say. I used to own a couple of Dairy Queens and another little regional franchise, then I sold them. ... If you think about it, most of what we do, whether it's retail or just here interacting with folks in church or wherever, we're all in sales. This was kind of a natural thing for me.

GS: How did you become familiar with the industry?

EC: Of all [the companies] that I interviewed, I selected United Bank Card with Jared Isaacman. Jared was willing ... to spend time with me to teach me the basics of the industry ... he's taught me a lot along the way.

I [also] read every sales book I can, I listen to sales tapes, go to every one of the events. Having a retail background, I realized the value of being part of the associations that represented us.

GS: How important are industry events to you?

EC: Discussing the industry regularly with Jared was great; he helped me develop the foundation, and he encouraged me to attend my first event, which was actually in Chicago at the Midwest [Acquirers' Association].

I saw the industry bigger, it wasn't just my little narrow perspective and my association with one processor ... Then at the [Electronic Transactions Association] in Las Vegas, that was an even bigger picture.

GS: Describe a learning experience.

EC: I remember the first presentation that I made. It was [to] an independent auto rental place. I didn't get the deal, fortunately, because later I discovered that I misrepresented our product tremendously, but I didn't know it at the time. I think that's why when I go to a merchant today, and they tell me some horror stories, it's not because the sales agent intentionally lied to them, they just weren't informed correctly.

So I discovered early on ... that it was important to learn as much as I could about our industry.

GS: Do ISOs provide enough training?

EC: Based on discussions I've had with my peers, most of them get their training from the school of hard knocks. I'm not saying that [training is] not available; some people just don't avail themselves [to] what's available.

I know that ... some of the bigger ISOs try to make training available. For instance, UBC has some ongoing training with folks, but I wonder ... how many people participate? If you only have 10% of the people participating, then that's not very good either.

GS: What is the biggest change in the industry since you started?

EC: That the banks are getting back into the business. The banks are merging and small ISOs are selling their portfolios. That would be it, the consolidation of ISO organizations, consolidating with banks, etc.

GS: What criteria do you use to choose an ISO?

EC: I would have to go back to where I started. It was all about me interviewing the ISO to find out what fit with me. It had a lot to do with personality and trust. I didn't know anything about this industry ... The most important thing at the time for me was trust.

I just assumed that everybody would give expert customer service to the merchant ... Number one on my list now is how do they provide customer service to my merchant? If something goes awry, [merchants] don't call the ISO, they call me. They call the person that they developed the relationship with.

GS: How is your business set up?

EC: MLS Direct Network is a co-op, a partner-owned company. It allows offices like mine to be part of an ISO.

Through the co-op we have more buying power, more clout when it comes to negotiating. MLS Direct Network is a corporation owned by its partners of which I am one.

All of the partners have offices, and each office brings with it however many agents they want to develop underneath them. Now we can go to the [vendors] and get better pricing.

GS: What types of merchants do you prefer to work with?

EC: I got started in this business in just plain old retail brick and mortar, and that's still what I do. I'm not comfortable with high-risk merchants only because I am not familiar with them.

One of my first [merchant] accounts was a fast food business because I was a "DQ" guy. I have many DQ stores. I have many [Burger King] stores. That is an industry that I am familiar with. Along the way, if you have influence in the community, in the business environment, then use that influence. Use that relationship.

GS: How do you approach new clients with whom you don't necessarily have influence?

EC: I have a "route" ... Every day I go out and work in an area where I have merchant accounts. Then the next day there is a different route.

One day I'll go down to discount liquor where I already have an account. I'll ask them for referrals in the area. Then I will cold call somebody in the neighborhood. I'll go next door or down the street and walk in and introduce myself.

I was in [the retail] business for many years, and one of the things that bothered me the most, would be for somebody to come in on my busy day and want to chitchat about the weather for five minutes before they told me what they were [here for].

Probably 90% of what we should do is listen. Salespeople have a tendency to talk people into [something] and talk them out of it. We talk them into it, then get nervous and keep on talking rather than shutting up and listening.

I use that relationship that I've already developed in a neighborhood, with whoever it might be.

I'm willing to be very competitive, but I won't get down and dirty. I will not get involved in a bidding or rate war. I have established rates, and I will not go below them. I have to preserve my attitude. If I leave feeling beat up, then how is my attitude going to be with the next merchant I call on?

GS: How do you explain interchange to merchants?

EC: It's a complicated subject, especially today with rewards cards, and most merchants today have been notified of that so they know. I've developed a flier that coincides with my pricing, and I explain if I'm selling a mid-qualified or non-qualified plan for example, then under each category it explains [the interchange rates for each].

GS: What do you think about regulation in the industry?

EC: I think that basically we're doing a good job of regulating ourselves. Anytime the government gets involved in something, it becomes overregulated. I understand when [the industry] started to evolve back in the late 1980s, there was a lot of corruption in the industry. But I don't think that corruption is here today. I think the ISOs know that if they aren't abiding by good common sense laws, then they will be regulated. I think we're evolving and the industry is doing a good job of regulation.

GS: Where do you see the industry in the future?

EC: Someone said to me, this industry ... since the day of its inception until today, from an equipment perspective, [hasn't] grown that far. We're still out here with Trans330s. I see technology finally catching up with our industry. We're probably on the verge of some of the most exciting times ... The next five years [will] be more beneficial than the last five years, simply because of the technological changes that are occurring.

GS: Describe a typical day in your life.

EC: I am an early riser. I get up about 6:00 a.m. and have my office at home. I try to plan the night before, that way I don't have to worry about what I'm going to do today. I review my schedule for the day. I check [and send] e-mails. I may adjust my schedule based on what I receive. I do business with folks on the East Coast and [in] Texas, so that starts early.

I'll read some trade magazines and other materials and try to get out of the office by 10:00 a.m. and start calling on customers. The traffic ends up dictating where I go in a day, but normally I end up staying locally. I think that I could spend the rest of my life here [in Southern California] and never saturate the market.

GS: Do you have any advice for newcomers?

EC: They would be better off being an agent for a small office in the beginning. Find a small office that has the time and a good training program. I think the vast majority of people getting started in this industry probably quit before they develop enough understanding of merchant accounts where they can see value and potential. Get involved with a company that has the time and resources for training and motivation.

GS: How has The Green Sheet helped you?

EC: I didn't know about it three years ago, and I think that The Green Sheet has given me a lot of good information. Because of the folks that participate in [GS Online's MLS Forum], I glean a lot of information from there.

GS: Any final comments?

EC: I am so excited about this industry and so fortunate to be a part of it, that I want to thank everybody who has spent the time helping me to understand it.