Given the current proliferation of automated business tools, selecting the right ones to help with ISO management can be daunting. To navigate the maze of options, The Green Sheet interviewed merchant acquirers, industry consultants and system developers who have expertise on how to streamline business processes in an increasingly complex world. We also spoke with experts in training and ISO finance because without a well-prepared sales force and adequate resources for growth, no ISO can truly thrive.
Many ISOs have in-house training programs; others do not. Fortunately, a number of training tools are available to ISOs and merchant level salespeople (MLSs). Payment professionals who attend the regional acquirer conferences are familiar with Mark Dunn's Field Guide Seminars, which cover both basic and advanced topics of vital interest to ISOs and MLSs. Dunn believes that with standardized training, ISOs have a much stronger position with sponsor banks and regulatory agencies, since such programs foster consistency across the board.
As President of Field Guide Enterprises LLC, Dunn spent more than two years building content for his standardized, self-directed online training program for new sales agents. It takes 12 to 15 hours to complete 10 lessons that cover everything from bankcard 101 and the major industry players, to transaction types and pricing models. A study guide to accompany the online course is in the works.
Marc Beauchamp, author of How to Survive and Thrive in the Merchant Services Industry and creator of the Bankcard Boot Camp on-site program, recently took his entire training program online. While Beauchamp still offers sales consulting, he noted that his tiered, online Bankcard Tool Box contains everything an ISO needs, with 18 downloadable training videos and ancillary materials, as well as tools, tips, scripts and strategies to help grow a sales office.
"Most of my customers are small ISOs," Beauchamp said. "They don't have the time to be in the classroom one or two days a week. They're running their business." In addition to teaching MLSs the finer points of prospecting, how to communicate with merchants and how to close deals, he covers bundled products, marketing and goal-setting techniques. He also conducts monthly webinars on current industry trends and topics and provides third-party product reviews.
Bill Pirtle, President of C3ET Inc. and publisher of Credit Card Processing for Sales Agents, is a long-time creator of tailored learning solutions. He recently launched a new website, www.c3et.net, to advance training initiatives devised for the payments industry. "We now offer a textbook, study guide and advanced business training taught by top producers," Pirtle noted.
Dale Laszig, C3ET Senior Vice President, Sales and Training, added, "C3ET's vision is to be a true consortia and interactive environment for agents, ISOs and learning professionals. We collaborate with a number of professional training organizations, including Field Guide Enterprises, Bankcard Boot Camp, and IMPAX Corp., to offer best-in-class learning solutions."
Most payment professionals are familiar with cash advance, and many offer it to merchants as a value-added service. Lesser known, however, is that several companies specialize in ISO funding. These businesses, which are more familiar with the workings of the industry than banks and other traditional lenders, include Calpian Inc., Super G Funding LLC, ResidualLending.com and Velocity Funding.
Calpian recently expanded funding to its U.S. credit card residuals business with an infusion of $5 billion from Granite Hill Capital Ventures LLC. "Granite Hill sees our U.S. credit card residual business as a terrific cash flow generator with solid returns," stated Calpian Chief Executive Officer Harold Montgomery.
And Super G Funding offers flexible terms. "We now have short term ISO loans available," said Darrin Ginsberg, CEO of Super G, which means ISOs can negotiate terms ranging from 3 to 36 months, depending on the need.
Professionals interviewed regarding automated business tools agreed that most mainstream solutions, unless integrated with industry-specific software, fail to address core functions crucial to the multilayered payments industry.
Business Growth Strategist Karin Bellantoni, of Blueprint Sales Management Science, said organizations run the risk of expecting higher level capabilities than systems can deliver, pointing to SalesForce.com Inc.'s customer relationship management (CRM) sales automation system as an example.
"They hit the marketplace and branded something that is CRM as a sales tool, and it's not," Bellantoni said. "CRM is a marketing tool. How do we look at the transactions and the touch points with our customers and design strategies that help us bring the clients back time and again to up-sell, cross-sell and reach them? That's what a CRM tool is designed to do. It's not for a field sales force."
To bridge the gap, she recommends sales resource management tools that feed directly into a CRM system and measure sales pipeline activity. With this type of integration, ISOs can establish key performance indicators to measure conversion rates for each type of sales activity, such as number of calls per deal closed, and apply that data to guide sales performance both individually and as an organization.
Jeff Fortney, Vice President of ISO Channel Management at Clearent LLC, agreed that while CRM is a tool everyone wants, few systems have been designed with the payments industry in mind. He recommends working with reputable processors that offer a secure platform for drilling into sales data, an essential component in making informed business decisions.
Several enterprising companies have risen to the challenge by developing both cloud-based and on-premise business automation solutions that are advanced enough to meet the rigorous demands of the industry.
The Formula system, a cloud-based enterprise system, noted it has boarded more than 45,000 merchants and enabled thousands of employee and ISO users with its software technologies, tools and strategies. In May 2013, The Formula became commercially available to the acquiring community.
David and Michael McMackin, The Formula's founders, are seasoned payment professionals who no longer compete with peers in the acquiring space. They developed The Formula to be a fully integrated, end-to-end enterprise management and sales engine platform.
It consists of interoperable modules to manage the daily business functions of operations, management, client services, financials, analytics, recruitment, training, sales and sales pipeline, marketing, accounting, and human resources.
"It's not just an operational piece," said David McMackin, CEO at The Formula. "It's a revenue generation software ecosystem as well. It's the complete lifecycle of the merchant tied into the personnel in all the different departments that make up that back office, tied into all the salespeople that need that information."
He added that the modules can be integrated with existing legacy systems and will support both direct and indirect business models, making it a flexible option for organizations with field sales or in-house personnel. It also features a studio-quality, virtual training tool equipped for tracking student progress, as well as agent testing and certification.
Another on-demand system with preconfigured modules for merchant acquirers is the P2 CRM platform from POS Portal Inc., a company that operates POS deployment facilities in California and Kentucky. Winner of several payments industry awards for technology innovation, P2 was built on Force.com, the web application platform of SalesForce.com.
P2 offers users a single interface for managing all client activity, including lead tracking, application processing, boarding and post-boarding services, equipment deployment, risk monitoring, transaction data storage, and portfolio analytics. It features separate sales agent, referral partner and merchant portals. The P2's residual payouts engine can also manage residuals from multiple sources and apply them to individual agents, downlines and partners.
In January 2013, POS Portal introduced another portal, the P2 App Portal, which is designed to help ISOs leverage their platforms to integrate additional business application tools. "That's where we structure our relationships with industry partners like ControlScan and ACH Direct and build functionality on top of the platform that allows people to do PCI compliance or ACH billing," said Josh Johnstone, Marketing Manager for POS Portal.
Many ISOs and MLSs work with multiple processors, so offering a processor-agnostic system has advantages. "The fact that they can centralize all of their merchant data and then use that to populate different applications is hugely beneficial," Johnstone said, adding that online signature capabilities, apps for smartphone and tablet devices, and the ability to track leads from point of origination are additional benefits.
"Knowing where leads come from, knowing the status of those leads as they go through the sales process, even to granular steps, in terms of 'this particular deal is in this stage of the underwriting process,' I can see if I'm getting backed up," he noted. "I can see which sales guys are productive, which lead sources are productive, and really look at it to get a deep understanding of my business that typically hasn't been available with data coming in through different systems."
Software development experts Rajil Vohra and Sandeep Menon also perceived the value of processor-agnostic systems when they co-founded Artefacts, an on-demand and on-premise software solutions provider for the payments industry.
"We have clients all the way from acquirers and processors to ISOs and MLSs," said Menon, Executive Partner at Artefacts. "We actually provide business tools for everybody in the acquiring chain. We can give them a consolidated view of all of the processors and banks and sub-ISOs under them and bring everything into one portal."
In July 2012, Artefacts introduced an agent CRM and ISO residual management system that tracks leads, processes applications, aggregates residual file data from multiple processors and automatically calculates residual income for all parties involved. In January 2013, the company launched its own modular-based suite called Artefacts Merchant Acquiring Systems (AMAS).
Within the AMAS suite, the Agent+ module is the CRM and ISO residual management system; the Ops+, Apps+ and Board+ modules manage merchant application, underwriting and boarding processes; the POS+ module employs EZPOS Builder to create terminal profiles and file builds; and ARMS.Lite and ARMS+ modules monitor risk for small and large enterprises, respectively.
For larger offices, Artefacts' enterprise model provides back-end tools that interact with mainframe systems to deliver data that can be shared with ISOs. Another option is the hub-and-spoke model. "The hub can be the processor or the larger ISO, and the spokes can be the small, individual ISOs, where they can actually have it completely autonomous of their data," Menon said. "If you don't want the super ISO to see much of your data, they don't have to see it."
Another notable processor-agnostic provider is Sage North America. "Though all three of our ERP [enterprise resource planning] solutions would work, Sage 100 ERP is the best of the three for small to midsize ISO/MLS businesses," said Melody Chalaban, Senior Public Relations Manager for Sage.
With 13 modules to choose from, the Sage 100 ERP's sales management, human resources and payroll management, CRM, checks and forms, business intelligence and reporting, and accounting and finance modules are most applicable to payments. An online version is suitable for ISOs with a workforce spread across multiple locations, Chalaban noted.
While the processor-agnostic systems offer powerful tools for managing data, ISOs still must grapple with the fact that some companies deliver raw data better than others. "I know one company that gets their raw data in a CD format," Fortney said. "You upload it and then someone has to do queries in all the categories and the calculations to create the reporting."
Any form of reporting is only as good as the data received. Unfortunately, with many of the legacy systems in place today, that data is often restricted. "That's why when we designed our system, we designed a residual reporting module before we even booked our first merchant, and it became part of our overall management tool," Fortney said. "It was designed to allow them to proof the numbers."
Kevin Smith, President and CEO of Secure Bancard LLC cited another problem with legacy systems: many have not been updated to truncate information. For security purposes, that often leads to a reduction in the amount of information being disseminated to ISOs.
"I think that is one of the biggest issues surrounding our business today," Smith said. "How do you provide that information so the ISO knows what's occurring with his merchants, but he's not receiving information that could be compromised, exposing merchants via an intercepted email chain or something along those lines?"
According to Smith, Secure Bancard truncates the information it transmits to ISOs, protecting all personally identifiable information, and this has allowed the company to share more information with its ISO partners. He feels processors and ISOs should have a clear understanding of how the data will be protected before entering any type of partner agreement.
To address the multiple challenges today's ISOs and MLSs face, Anovia Payments LLC opened its doors on July 17, 2013. "We recognized that, frankly, with so much of the change that has occurred in the marketplace in reference to the new entrants, new technology and regulations from a PCI and 1099 standpoint, where all of those different evolutions have taken us, it really has put a lot of pressure on partners," said Kevin Jones, President and CEO of Anovia.
To alleviate this, Anovia enlisted developers to create a tool to accommodate all products, merchants and partners. Through a virtual office, referral partners can access boarding and residuals reporting tools, as well as other business development tools to maintain merchant portfolio profitability, retention and maintenance, among other functions.
"We have built a team that is very strategically dialed in to professional associations, VARs [value-added resellers], financial institutions and other business services companies that refer opportunities," Jones said. "I believe, rightly or wrongly, that more ISOs and agents will find themselves wanting to have one partner." He also believes partners who can simplify the sales and operational processes will attract more ISOs in the future. Do you agree?
Notice to readers: These are archived articles. Contact names or information may be out of date. We regret any inconvenience.Prev Next