Trends to Note In a Time of Rapid Change

It's hard to remember that back when electronic ticket capture came along, some of the largest banks exited the acquiring business to concentrate on the issuing side. The banks that remained demonstrated that bankers do not know how to sell and cannot be taught how to sell either. This gave impetus to the community of bankcard salespeople variously called independent sales offices (ISOs), merchant service providers, merchant level salespeople (MLSs), agents, and more.

These people were independent, changing sponsoring banks and processors with regularity, but times have changed. The sales process, technology and accompanying certifications and increasingly demanding requirements from the card brands have made for a complicated sale today, which is why you see salespeople working with independent software vendors and value-added resellers that provide business management software applications.

As a result, more and more salespeople are employees, as opposed to 1099 contractors or resellers. While the “good old days” were about focusing on selling or leasing equipment at high margins, packing the rate and dealing with high merchant attrition (for example, 20 percent), sales have become more technical today and generally call for more specialized, highly trained MLSs. This is a good thing for merchants.

Clamoring to get in

The number of companies that want to be part of the payments business today is impressive. But only a handful of processors dominate the industry. A recent study by The Strawhecker Group found that the 10 biggest acquirers processed four-fifths of all bankcard volume in 2016. Chase processed $1 trillion in payments. Of the 10 largest, six are banks or bank spin-offs, three are pure play processors, and one does back-end processing for five of the largest banks…

Read Full Article