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A Thing

Finding New Revenue Streams in Your Current Merchant Base

By Nancy Drexler and Sam Neuman

As technology evolves the process of processing changes. The industry has moved from using manual imprinters to wireless POS terminals; it is also developing new methods of accepting payment every day.

This presents a challenge for you as a merchant level salesperson; it means that you must constantly stay on top of new developments to remain competitive. However, many feet on the street don't see a silver lining in this: New technology also means new opportunities to resell, up-sell and profit from your current merchant base.

Merchants, as a rule, tend to resist change. The only change the average merchant is willing to embrace is the opportunity to switch processors to receive a better rate. When it comes to making substantive changes to the way they do business (read: spending money), most merchants will instinctively resist any expense that does not directly fill an existing need.

Your job is to create that need. Make merchants see how much profit they will gain by spending a little bit of money on something new.

Cynergy Data is handling the rollout of MasterCard International's PayPass, a new contactless payment method, in the New York City metropolitan area. Use the following three-step process, which Cynergy is using for the PayPass launch, to market new technologies to existing merchants. You will generate major profits.

Step 1: Determine the Consumer Need
The greatest product in the world will lose money for you and your merchants if consumers don't use it. The most successful new technologies and payment methods are the ones that directly respond to consumer needs.

PayPass is a direct response to common customer concerns about transaction wait times. For merchants in the MasterCard Quick Payment Service (QPS) category, including fast food restaurants, movie theaters, parking garages, drug stores, convenience stores and service stations, consumers don't have to wait to sign a receipt for transactions less than a minimum amount (usually $25). They simply tap their cards and are on their way with fast food, movie tickets or pharmaceuticals in hand.

In addition, PayPass responds to customers' concerns about cardholder security, a hot topic never more present in consumers' minds than now, in the wake of the CardSystems Solutions Inc. data compromise.

For the duration of a transaction, the PayPass card never leaves a customer's hand. There's no need to worry about an unscrupulous salesperson stealing a card or copying down the account number. For those of us who can be somewhat absent-minded, there's no risk of leaving the card on the counter as we hurry away with our purchases.

For this project, Cynergy has received an incredible marketing boost in the form of a pre-created consumer base. MasterCard formed agreements with issuing banks that will offer more than 1 million cardholders PayPass-equipped cards in either traditional card or convenient key-tag form.

Consumers excited about the convenience and speed of PayPass will flood the market. They will look for businesses where they can use their new payment method, and they will become loyal to merchants who offer PayPass.

Step 2: Create the Merchant Need
If you do your job well, you have an active, satisfied merchant base. Selling payment processing is a challenge in itself, but it is even more difficult to sell merchants new equipment that they don't need, or more accurately, equipment that they don't know they need.

In the PayPass example, the merchant need is clear and easy to convey: A million consumers will soon be eager to pay for transactions with their new MasterCard PayPass cards. Merchants who sign up to accept PayPass will tap into an existing market need, accept more payments and keep their customers loyal.

These are only a few of the benefits for merchants who accept PayPass. QPS merchants are familiar with long transaction lines and waiting for customers to dig through their pockets for appropriate cash and change.

When the day is done, they're used to reconciling cash drawers and finding them under or over by double-digit amounts.

PayPass allows QPS merchants to truly provide quick service to their customers, and at the end of the day, fewer cash transactions mean less risk of employee error or theft.

For a few large merchant groups, including video stores, book stores, music stores, newsstands, supermarkets and dry cleaners, MasterCard will allow qualification for the QPS processing category if merchants agree to install PayPass. Sell these merchant types a new method of payment acceptance and make them true quick-service providers at the same time.

Step 3: Know the Product
Face a fact: You can't sell what you don't understand. While there's no need to master every nuance and complexity of interchange, there's no excuse for not knowing enough about the process of processing to explain it to a merchant in a few minutes.

The same rule applies when selling equipment and technology. You don't need to explain how to build a terminal from scratch. However, you do need to clearly and concisely explain the unique benefits of the product you're selling.

Start by requesting a sample of the product and spend some time learning how to use it. Then, assess what features and benefits the product provides that are unavailable in competing technologies.

For example, the MasterCard PayPass system uses an embedded computer chip and hidden antenna to allow a customer to simply tap his card against a PayPass reader and process payment.

In some cases, you can add the PayPass technology to a common terminal model, incorporating a new product into a processing system with which you and merchants are already comfortable.

Remember that all the bells and whistles in the world are useless if you're not selling a system that merchants will understand and, more importantly, customers will use.

The first time you sell a merchant something he or she doesn't need is also the last time you will sell that merchant anything.

For MasterCard PayPass, the consumer market is there, and the merchant benefits are there. The equipment is easy to understand and even easier to use.

By offering this system to merchants, you will differentiate yourself from the competition by becoming known as an agent on the cutting edge of industry developments. You'll build merchants' businesses while building your own.

Nancy Drexler is the Marketing Director and Sam Neuman is the Communications Specialist of Cynergy Data, a merchant acquirer that distinguishes itself by relying on creativity and technology to maximize service. Cynergy offers its ISOs: VIMAS, a cutting edge back-office management software; Vimas Tracking, a ticketing system that makes responses to customers fast, accurate and efficient; Brand Central Station, a Web site of free marketing tools; plus state-of-the-art training, products, services and value-added programs, all designed to take its ISO partners from where they are to where they want to be. For more information on Cynergy e-mail Nancy Drexler at .

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