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Street Smarts:
Check, Please!

By Ed Freedman

We're already a couple of months into the New Year, and no one has broken any New Year's resolutions-or have you? Don't worry. I won't let you down. I'll help you keep at least one of them: remember the one where you resolved to become an expert in a new product offering?

My next series of columns will focus on ensuring that you, the professional merchant level salesperson (MLS), successfully learns to sell at least one new solution to add value to your existing credit/debit processing service offering. I won't introduce different products and services. Instead, I will teach you how to sell them.

The first value-added product I will focus on is check conversion (with or without guarantee). This product enables merchants to accept and process checks in a way that is similar to how they accept and process credit cards-by handing the check back to the customer.

Check conversion eliminates paper checks by converting them into an electronic funds transfer (EFT) and then processing the transaction through the automated clearing house (ACH). Merchants' accounts are funded within 48 hours and remain funded (even if the check is returned NSF), when check guarantee is part of the service.

Returned check fees are reduced, as is the need to make daily deposits to the bank. Merchants with multiple locations can consolidate funds and combat counterfeit checks with the use of their non-MICR ink detecting check readers. This all translates into merchants feeling more secure about accepting checks for payment and increasing their sales. Recently, I had the opportunity to interview two leaders in the check services space, Global Payments Check Services and Global eTelecom, Inc. I asked the companies the following questions:

  • MLSs need to have an edge when presenting new products to both prospects and existing merchant clients. What products would you recommend MLSs include in their packages?
  • What sets your products apart from others?
  • What are the major selling points of your products?
  • How would you recommend MLSs present your products?
  • How do MLSs benefit by selling your products?
Global Payments Check Services recommends that MLSs always mention opportunities to increase efficiencies at the point of sale by using a check conversion product-such as Global Payments' solution. This will facilitate merchants' settlement, improve cash flow and reduce their current bank charges, either for deposits or returns.

Global Payments said there are many ways to differentiate its offering from other solutions:

  • No secondary ID needs to be entered onto the terminal (ease of use)
  • A 45-day submission for returns on merchants using the paper deposit program
  • A 48-hour or less funding for conversion merchants and a 7-day reimbursement for those merchants who use the paper deposit program, with no additional fees
  • Guarantee program does not use turndowns at the POS to manage risk and or profitability of the merchant's account
  • A one-day variance between check date and authorization date, and they provide the merchant, free of charge, with a record of the checks authorized as a standard with their monthly billing
The company cites product reliability and ease of use as the major selling points for its check service products.

Global Payments recommends that when MLSs talk about check conversion, they present it as they would present credit cards. The process for accepting checks and merchants being funded is as simple as accepting credit card transactions. And when talking about its standard guarantee product, easy integration with current equipment should be the focus.

According to Global Payments, there are numerous benefits for MLSs when incorporating their check products:

  • The ability to secure a merchant with a one-stop shop for payment options
  • An on-going residual stream created by the accounts they bring on the books
  • Equipment sales, upgrading the merchant to new equipment for the conversion accounts
  • A company that has been in the check guarantee industry for over three decades supports Global Payments' products. MLSs will work with a designated support person, providing one-on-one training and assistance with the sales process
Global eTelecom said that MLSs should promote a "total payments solution" package to their merchants, the most popular being gift and loyalty, EBT and check. The company recommends MLSs think outside the box in regard to what other services merchants need or currently use. Check programs have evolved beyond the old-fashioned paper guarantee offering. There's electronic check conversion with a guarantee option, RCK (representing NSF paper checks electronically), recurring ACH debit and ARC (electronic conversion for mailed-in checks).

Global eTelecom cites the following differentiators and advantages for using its guarantee product:

  • No check imager required, a less expensive check reader is acceptable
  • A much higher percentage of consumer checks are approved at the point of sale
  • Merchants won't be charged a discount percentage on checks declined at the point of sale
  • Free online reporting for merchants
  • Its program is protected by the ECC patents, thus ensuring uninterrupted service for merchants
  • Most comprehensive terminal/reader compatibility in the industry (VeriFone, Hypercom, Nurit, Talento, RDM, MagTek, Ingenico) Global eTelecom said it created its product "to be sellable for the MLS." The company's executive management staff is comprised of experienced professionals who have specifically designed all functions of Global eTelecom to be ISO friendly. Its internal departments-customer service, tech support, finance, sales, collections and R&D-all are focused on serving the ISO/MLS, especially since it is the company's only sales channel.
Global eTelecom recommends the concept of "you can now accept and process checks similar to a credit card transaction" as the best way to sell its primary product of check conversion with guarantee. It even offers examples of questions that will interest a merchant in the product:
  • Do you take checks the old way or the new way?
  • Wouldn't it be nice if you could lower your bank fees and eliminate your trip to the bank for deposits?
  • Have you seen the program that enables you to accept and process checks with the same security as a credit card-all for a lower cost?
  • Did you know you can now accept checks and get paid electronically without worrying about bad checks?

According to Global eTelecom, the number one benefit to MLSs selling their product is...money:

  • Check conversion requires a check reader, which creates an additional equipment sale
  • Its products create an additional residual income stream for monthly fees and processing fees
  • The company believes that merchants who have multiple services with one agent will be more reluctant to switch bankcard services, thus increasing merchant retention and keeping residual payouts going longer
  • Agents will lead with Global eTelecom's check product to get their foot in the door and follow up with the bankcard sale
  • Global eTelecom's suite of products empowers MLSs to target certain niche markets that may not have been accessible with a simple bankcard offering
After speaking with these two companies, I turned to MLSs for their views on check services. Last month, I posted the following on The Green Sheet's MLS Forum:

"What benefits do you get from offering these check services such as check conversion/check guarantee? Do you offer them for financial gains or to improve customer satisfaction and retention? If you don't sell check services, why don't you? Is it from lack of knowledge or lack of interest?"

Here are some excerpts of some of the responses I received:

"If it is just conversion/guarantee you are asking about, we have found the following to be true for us: Not all businesses need it. I always say 'In the proper environment.' If you get educated in this service, you can do quite well. If you simply throw it in, you'll lose your merchants' respect, and then all of their processing that you provide them.

"Great item, in the proper environment! I did not mention the additional equipment, as it is not an issue when placed properly. Imaging is now the right equipment for this. And when it starts franking, it'll be even better!" -Q

"I think I make more money per customer on check as compared to bank card. And I think my merchants will stay with me longer if I have more services on the machine. I prefer MagTek readers with Talento or Nurit Terminal. I have had more service calls out of ten imagers than with 200+ terminals, so I am done with imagers. It seems like a lot of merchants quit using this service after a month or two.

"Although I lead with check guarantee and fully explain it to each merchant, only about 10% take it and a lot of them drop it. When talking about Check, you may want to mention Recovery. It is an important product too." - bancardrep1

You need to recognize that it's becoming more and more difficult to start a conversation with a merchant just about credit card processing services, discount rates and fees...let alone new value-added products. This is particularly true if you're talking to a merchant that currently accepts credit cards.

Every MLS gets opportunities to reprogram existing, processing merchants. You must maintain reasonable margins so you don't rely on price alone. To do so, you'll have to offer something new and beneficial to the merchant. I cannot think of anything more beneficial than a good check guarantee and conversion program for both your new and current accounts.

Begin by introducing the product, but emphasize benefits such as ease of use, increases in cash flow, reduction of bank charges, decrease in counterfeit checks, funding within 48 hours, online reporting, etc. SELL the benefits!

I also think that having more than one thing to sell shows a merchant just how professional you are. They'll see you as a consultant rather than just a salesperson. You need to offer and present more than one solution to meet their needs including credit card processing, credit with check guarantee, check reader (no imager), credit guarantee and conversion (with imager) and wireless credit card processing.

Something else to remember: the great thing about selling check services is that it's not very complicated for anyone already comfortable selling credit card services. Check-related products are sold with the same types of rates and fees: discount rates, per item fees, statement and service fees, monthly minimums, etc.

From the comments on the MLS Forum, a couple of things concerned me-for instance, the complaint about check imagers breaking. My advice: Sell something with a proven track record. At Total Merchant Services, we offer a $499 package deal with the Talento T1 and RDM 6004i check reader (imager). It's working very well for our sales partners, and we've had no problems with the equipment.

Another area of concern for me is when merchants discontinue check services after a few months. To avoid this, you must present the product properly and emphasize the benefits from the beginning. Some salespeople just add check services into the mix without going into detail about the benefits. If your merchants do not fully understand and appreciate the value of check services and how they will benefit, they will not continue to use it. I especially like the questions Global eTelecom suggests you pose to the merchant to encourage a dialog about check services. USE them!

Once you've closed the deal, make sure your merchants get fully trained, either by you or your check services provider. The key to making sure your merchant continues to use the service is you doing your job. That's what we call good follow-through!

Finally, and most importantly, when selecting a service provider, choose a company with a proven track record using your ISO/MSP provider, or at least, your front-end processing network (e.g. Global East, Global Central, VisaNet, Paymentech, First Data).

You need to make sure you know when and how to load the check part of the download separately. Even better, do what we decided to do-partner with a provider that offers one download program that's pre-loaded to work for all the services you're providing: credit, debit and check. With one download program that is set up for credit/debit and check conversion with guarantee, there's less chance of making an error.

I would like to thank both Global Payments Check Services and Global eTelecom, Inc. for their invaluable contributions to this article. My next column will focus on gift and loyalty programs. Look for my upcoming post on the MLS Forum. As always, I'd love to hear from you. Please send your comments to streetsmarts@totalmerchantservices.com .

"Whenever you are asked if you can do a job, tell 'em, 'Certainly I can!' Then get busy and find out how to do it."

-Theodore Roosevelt

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 the website at 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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