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Partnerships for Success - Part I
By Ed Freedman

How many times have you lost a customer or a good reference or even a referral source as a result of a problem caused by a third-party vendor you selected? In this first of a two-part series, we'll look at vendor selection, including equipment providers, leasing companies, check conversion and guarantee providers, and gift card and loyalty programs. The second installment of "Partnerships for Success" will cover ISO partner selection.

Neither you as a Merchant Level Salesperson nor your merchant bankcard program provider can do everything on your own. We all rely on vendor partners. Because of this, effective vendor partner selection never has been more important.

I speak from my own personal experience. I've been through a minefield of really bad vendors. As a result, I've learned several important lessons while weeding out the good from the bad. It did not matter how good a job my company was doing.

If we had a vendor who was not performing, our sales would be affected immediately. On the other hand, when our vendors performed really well, our sales increased dramatically.

What's the most effective way to select the best-quality vendor partners to ensure your success? The following three words should be at the forefront of your mind during your discussions and selection: compatibility, service and price.

You first need to find out what type of compatibility and experience a vendor has with your credit card processing company. My first question to any vendor is, "Do you work with Global Payments? What other Global Payments ISOs are you working with right now?"

Next, move onto service, support, pricing and the terms of the agreement. After I conclude my initial discussion with the potential vendor, I phone other businesses that are using their product or service.

When I talk with these people, I try to find out how long they've been using this company and the particulars of their deal. I ask, "Does it work? How do you rate their customer support? Are you happy with the pricing?" Only after I find out all of this information would I be ready to get back to that vendor partner to start the negotiation.

Another great suggestion is to utilize the MLS Forum and post an applause meter for the vendor you're interested in signing up with. I see many of you are already doing this, and the MLS Forum reflects just how strategic the selection process is. Here's what agents are saying about picking the right vendor partner. For easy reference, I've listed them in categories. At the end of the article, I'll give you my opinion on the best way to make a smart selection.

Equipment Providers

  • "Anytime someone moves a piece of paper or does something for you, it costs money. You need to weigh the pros and cons of doing it for yourself vs. someone else doing it for you. Time also costs money. Some people like to use the phrase 'Save Time' whereas I use the phrase 'Buy Time.' Time costs money! Confederate General Nathan Bedford Forrest, when asked about his victories in the war of the 'Yankee Aggression,' replied, 'The key to victory is to be the firstest with the mostest,' and that, my friend, is as true today as it was back then. Nothing infuriates a merchant more than having to wait on equipment. So, whatever it takes to cut the time involved to get equipment installed is the way I would go with the decision. Bottom line: It's your decision."

  • "Doing everything yourself is the best thing. We do it all ourselves. You make a lot more money that way. The work is not that much, and the money will justify the extra work."

  • "The experience of downloading, installing and handling the training yourself is invaluable when it comes to being an asset to current and potential merchant accounts. It's much easier to troubleshoot problems when you've 'gotten your hands dirty' with the equipment."

Leasing Companies

  • "My suggestion would be to go through your ISO because they generally have the best leasing programs. It's difficult for an individual rep to get the same deal as a large ISO that sends in large volume. If your ISO can't offer you a lease program you're happy with, then maybe you should find another ISO. Be careful in that - as with other areas in this business, it's easy to be taken for a ride. They may have the best rate on an 'A' deal you've ever seen, but the way they score the lease no one will ever get scored with an 'A.' "

  • "The difference in scoring may not truly be the lease company. You may have more than one account with the leasing company through different ISOs. Each ISO may have completely different contracts with the lease company. One ISO may have to send in original apps and another may accept faxed apps only. One may require first-and-last payment where another does not. You may have to do a verbal confirmation of the lease through one ISO but not the other. Most important is the difference in the way the lease is scored! You may have the same merchant receive different lease scores because of the way the ISO has set it up with the lease company."

Check Conversion/Guarantee Providers

  • "We offer a 1.18% plus $.18 for check conversion with guarantee. This comes with free online reporting as well."

  • "We offer a 1.12% plus $.16 for check conversion with guarantee. We also have 24/7 free online reporting."

Gift Card and Loyalty Programs

  • "Sell gift card programs because the other guy does and you need to compete, not because you'll retire on the residual income it generates."

  • "A gift card sale is an educational sale that typically takes one to two hours to complete. I can't justify this time expenditure for so little income. Something is wrong here! What's all the hype about this product?"

  • "Gift cards can be a very important income stream to merchants and ISOs. Like everything else in value-added products, it takes proper training of the ISO, good sales material and proper presentation to the merchant. Adding gift cards definitely helps in merchant retention if it is clearly explained from the beginning."

  • "Gift card programs are only economical in a small percentage of my portfolio. I will not push any value-added service unless it will truly benefit the merchant (this includes check guarantee and PIN-based debit). Too many times in this industry a rep will try to sell a merchant everything under the sun just to add to his/her residual stream. I have encountered reps soliciting my merchants claiming how a debit PIN pad will save them hundreds of dollars each month. The irony is the merchants were 100% mail order!"
Ed's Rating

As you can see from these posts on the MLS Forum, everyone has their own opinion, and those opinions are very different on the same topic. It's clear to me that what is right for one person is not right for another. As such, you need to do what's right for you.

I believe the most valuable thing you have, as a Merchant Level Salesperson, is your time. If you're a good salesperson, then you are managing your time effectively. To do so, you need to make sure you're spending as much time as possible selling. I've seen great salespeople spend 50% of their time on non-sales-oriented tasks, including fixing problems at merchant locations, doing administrative tasks like downloading programs onto terminals to save $10 a terminal, taking customer-support phone calls, teaching merchants how to use the services you're providing, negotiating separate contracts with every possible type of vendor, etc. In my opinion, that is a mistake.

I think it's also a mistake to try to put your own program together when you get your program or check services provider on your own. You're better off choosing a bankcard program provider and utilizing their chosen vendor-partners. In this way, you're not taking a chance about compatibility. You know it will work.

I've spoken with many Merchant Level Salespeople who have shared horror stories about how they spent their whole day at a merchant location dealing with the aftermath of a download program that got blown out because of a check services program placed on the terminal.

I've also seen these "blown out" terminal programs cause nightmare problems with merchants getting their money. Compatibility is key. You need to know that it's going to work. You need to know that many other sales reps have already tried using this terminal or check service provider on this program and have had no problems.

I also believe these large bankcard programs have a better ability to negotiate better pricing. They can get you more favorable factor rates with leasing companies. They can get you better equipment and software prices. They can get you better buy rates with check conversion and guarantee companies as well as gift and loyalty providers. Why? It's really simple. They can go to an equipment manufacturer and buy 1,000 or even 5,000 terminals at one time. They do a special deal and offload them within 90 days.

The best part of going this route is that many companies are not looking to make money on these services. They are not padding the lease factor rates or adding $25-50 to the cost of each terminal. Instead, they are just looking for their share of the net profit from the merchant bankcard processing service fees.

As such, take advantage of these programs. Everything is already negotiated for you. You'll make more money and, more important, you'll spend more of your time doing what you need to be doing - SELLING!

Remember, the key to vendor selection is compatibility, service and price. Repeat after me: compatibility, service and price ... compatibility, service and price ...

As always, I'd love to hear from you. Please send feedback on this topic (and any others) to My next column will discuss the importance of ISO partner selection. Obviously, this is a very hot topic, and I'd like to include your opinions in that discussion.

"Great things are not done by impulse, but by a series of small things brought together."

- Vincent Van Gogh

I'll see you next time where the rubber meets the road.

Ed Freedman is founder and President/CEO of Total Merchant Services, one of the fastest-growing credit card merchant account acquirers in the nation. Ed is the driving force behind all business development activity as well as the execution of Total Merchant Services' marketing plan, including recruiting and training independent sales offices and establishing strategic alliance partnerships with leading vendors, so that Total Merchant Services can provide its customers with the highest quality and most reliable services available.

To learn more about Total Merchant Services, visit To learn more about partnering with Total Merchant Services, visit or contact Ed directly at

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