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Street SmartsSM
Partnerships for Success - Part II
By Ed Freedman

In my previous column, we discussed the importance of effective vendor partner selection. Paramount to smart partnership is compatibility, service and price. When it comes to choosing the right ISO partner or merchant account provider, additional factors come into play.

Since the most important vendor is your ISO partner or merchant account provider, it's imperative that all issues are examined. In keeping with my commitment to make this column interactive and ensure that your voice - the voice of the Merchant Level Salesperson - is heard, I placed the following post on The Green Sheet MLS Forum for feedback on merchant account program selection:

"In an effort to educate the Merchant Level Salesperson about the important issues when considering a merchant bankcard program and, in an effort to educate the bankcard companies you're working with as to what's really important to you, I'm dedicating my next column to the hot topic of merchant account program selection.

"As such, I'd like feedback from you, the hard-working MLS. Which of the following are the most important considerations in deciding which merchant account program to represent ... and why?

  • Residual compensation program
  • Sales representative agreement (terms and conditions)
  • Reputation/experience in the industry
  • Front-end processing platforms
  • Vendor relationships
  • Partner support
  • Customer support
  • Risk management and loss prevention
  • Accurate and timely reporting of commissions

"Please let me know what you think. Your voice needs to be heard. Also indicate whether you'd like your name and company noted in the article." The response to my query was overwhelming. Agents across the country weighed in on picking the right ISO partner. Here are just a few of their comments. As always, at the end of the article, I'll give you my opinion.

MLS Forum Posts

"Well, they are all obviously very important, but if I had to pick one, just one overall, then in my humble opinion I would have to go with door number 2: 'Reputation/experience in the industry.'

"I believe this to be the key most important item listed because, to me, everything else is crap if they do not stand by their word and their agreements. Usually, the ISO's exposed in the open with nothing to hide, the ones who have a [good] reputation, are the ones you can count on. Not everyone will be happy with them, but in the overall scheme of things they usually will come out on top. In my limited time doing bankcard, I can easily think of five off the top of my head whose reputation/experience has made me decide they are definitely great to work with.

"As far as the other items listed, they are all important, too, and if each of those categories is running smoothly then that's what I consider BONUSES to an honest, ethical ISO that has a great reputation in the industry with good knowledge and experience at the helm."

- Mike Robinson

"The question you ask has a simple answer, from my skeptical point of view. I've become skeptical after learning the hard way - by discovering the same lessons so many of us have had to learn in this business. Reputation of the company is by far the most important thing I'm going to consider. It doesn't make any difference what the company claims as far as how good their service [is], the contract, the residuals or anything else, for that matter.

"What other reps in this business have to say about the company is what matters. If they have a good reputation, then it's most likely they have decent customer service, fair contracts and pay residuals. What we need most is a better way of communicating with each other so we might learn more of how a company performs according to the people who count most - the street-level reps writing the business.

"All companies may claim great customer service, lowest rates, good contracts, etc. but I'm not going to trust an advertisement or what's in the contract. The contract is no better than their reputation for doing what's right rather than looking for a way to legally screw the customers or the reps writing the deal. Reputation is key, and everything else will fall into place."

- Neil Mink

"Which of the following is most important when you get in your car and want to drive to work?

  1. Gas in the tank?
  2. An engine that will run?
  3. Tires on the axles?
  4. Brakes that will work?

"Would you expect an automobile to be in good working order if any of the above were missing? Probably not. So why not expect the same in this MLS industry. All the named factors must be present for me to want to work diligently for the time I spend. They are all equally important and all equally expected."

- "Melzer" (MLS Forum User Name) "I think that the single MOST important factor is having a contract that protects and ensures a continual residual income stream to the agent - especially in light of all of the acquisitions going on in the industry lately. After all, the best pricing and service in the world won't matter if the acquirer gets bought and the residuals go along with it.

"That being said - the car analogy is right on track. However, I think that the EXACT mix will vary according to the type of portfolio being built. For instance, if a company has a strong focus on MO/TO and Internet deals, then they will be more interested in liberal underwriting and strength on the e-commerce/risk-management side."

- Chris West

"Additional perspective on your post might go this way: You list nine strong reasons on what you believe are attributes that are necessary to make a successful business operate. And I agree with you so totally (no pun intended) I challenge you to pick just one of those nine categories and ignore it so completely that it gets a grade of "F" and then give me your opinion on whether TMS would still be a leader in this POS industry.

"My point? Like the car analogy, the thing simply cannot operate without all the significant parts in place operating perfectly. And if you do not provide the absolute complete parts offering, then you will finish far from the front of the pack. I think you and Matt must know that because the attention to the details are obvious!"

- Melzer

Ed's Rating

First, I would like to thank all of the Merchant Level Salespeople who sent such intelligent and articulate responses to my post. I hope you recognize that your voice has been heard. Surely, the companies that are actively seeking your business will respond accordingly.

Personally, it was very heartening to see that the #1 issue was "Reputation/experience in the industry." I am in total agreement with this. After all, a contract is only as good as the people who stand behind it. I think that many merchant account providers have an image in their minds that the Merchant Level Salesperson is out there screaming "SHOW ME THE MONEY" when in reality you're saying very politely, "Please treat me and my customers fairly."

As always, I'd love to hear from you. Please send feedback on this topic (and any others) to streetsmarts@totalmerchantservices.com. My next column will discuss the latest trends in effective lead generation. Please watch for my Green Sheet MLS Forum post on this timely topic. Obviously, this is a hot one, and I'd really like to include your opinions in that discussion.

"You can't build a reputation on what you are going to do."

- Henry Ford

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 www.totalmerchantservices.com. To learn more about partnering with Total Merchant Services, visit www.upfrontandresiduals.com or contact Ed directly at ed@totalmerchantservices.com

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