Letters to the Editor
Dear Mr. Green:
First of all, thank you for your informative newsletter. I have been trying to do research on the credit card business, specifically ISOs, for some time now but finding very little information. I found your site by accident. Yet it leads me to a great source of relevant articles and information.
I'm new to the industry and interested in exploring new career opportunities in the field. I have experience in finance, sales and marketing. At this time, I wonder if you could direct to some source where I can find out more about whether to start a new ISO company or become an agent of one. Your recommendation is highly regarded.
To be more specific with my question: How do I start an ISO?
K.Y.
Dear K.Y.
I assume that you mean that you would like to know how to register with Visa and MasterCard to be a BSP (Bankcard Services Provider) or MSP (Member Service Provider). To do this you can contact VISA or MasterCard, or the bank you contract to represent can also help you. You should remember, however, that you can be an IS0 for terminals, Check Guarantee, Verification, Debit, American Express, Discover and many other such financial services programs, without registration.
I hope the following will help you find the information you want on the industry, as well as organizations to work with for financial services. You should be aware that these organizations have specialties which differentiate them from one another, and you may need to do some searching for the organization that best fits your needs. Also, be sure to check out AmericanNational Bank (ANB) in Chicago (847-823-5100). ANB is one of only four banks we have listed in the Resource Guide looking for ISOs. While the list in issue 97:01:01 will save you start-up money (i.e., registration), the ANB program can also do this, and they have some of the highest commission payments in the industry. Finally, you really should have a Check Guarantee program as well; we recommend CrossCheck Inc., who are specialists in ISO support (800-654-2365). We hope this information will help you with your search, and please let us know how it goes, in particular anything you find interesting about the folks you contact. Please tell all organizations, you were referred by The Green Sheet!
Good Selling!SM
Paul H. Green
Editor
How much longer can all this go on? Is the pie really that big for the long term for guys like me? What impact does upgraded technology have on solitary guys like me (Cash register POS, etc.)? Where would you suggest someone like me look to continue to earn a living for the next few years or even long term. What should I read (in addition toThe Green Sheet, of course), etc.? How are you at prognosticating?
My sense is that as the pie shrinks over the next couple of years, there's going to be a fairly large percentage of guys who can't make a go of it due to saturation of the market, too few sales, or profit margins being too thin, who will end up selling shoes or whatever, thus thinning out the ranks and decreasing the competition. Am I spinnin' in the wind to hope that will happen and leave a few big players and their independent contractors (like me) at the table (eating the pie [sic] apologies for mixed metaphors)?
I really don't want to presume upon your patience or expertise. Frankly, however, I don't know who else to ask... thanks for your help.
Odysseus...
Dear Odysseus:
You certainly have some interesting and in-depth questions. Let's start with the overall question of turnover. In the Financial Services Industry, many product or service sales are a one-time event and have little, if any, relationship management element. Therefore, turnover is high. This is more a function of the sales professional than of the industry or type of sale. The truth of the matter is that no one wants to do endless cold calling. Every salesperson, if they are honest, wants the sale to come to them, and benefit from repeat business and reorders. After all, anything else is hard work. With this in mind, we must expect that the burn out rates for sales professionals is high, and that the very best people, and some of the less capable as well, will try and multiply their talents by hiring downstream people to help them.
In the world of Visa and MasterCard today, this means that this individual should be registered, have their own bankcard relationship, and have paid the registration fees to both Visa and MasterCard. One of the interesting questions in the industry is, "How many organizations actually register, and how many are functioning outside the required system?" Now don't forget, the individual, or for this discussion ISO, can setup shop to sell point-of-sale terminals, Check Guarantee, Verification, American Express, Discover, Debit, Echecks, and many more items which fit well into the sales bag, and do not have a cost which must be paid to the service or product provider. In many cases this means an individual can start up a new ISO organization with little money, and begin employing others.
Now this leads to the next element of your question, is the Financial Services market drying up? It is very true that there has been a consolidation in the industry, and much of the cream bankcard business and opportunities are NOT what they once were.
Saying this yet another way, a decade after the bankcard ISO boom, it is more difficult for many "bankcard only" ISOs to make the same living from rebates as they once did. But, let's be honest. Even at the peak of the opportunity, much of the income for the individual salesperson came from application fees, programming fees, and equipment. Today, equipment sales continue, as merchants need to replace, expand, and upgrade their equipment, and new opportunities are taking the place of some that are shrinking.
American Express, Debit, EBT, Verification, Check Guarantee , Web and many other opportunities are growing. For example, less than 10% of the check market has been penetrated in the case of Guarantee, and many new check opportunities are becoming available. So, I would say the market is healthy and continues to be a place for sales professionals to make a good living. Don't look to be selling shoes real soon. I believe there is a great deal of opportunity for ISOs in today's marketplace.
Good Selling!SM
Paul H. Green
Editor
Send Letters to the Editor to The Green Sheet, PO Box 6008, Petaluma, CA 94955-6008 or greensheet@greensheet.com.
