Merchant Acquiring

Partnerships Could Aid ISO Sales Efforts

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For nearly every sales force in nearly every industry, selling based on price can be a losing game; someone is always willing to sell for less.

The payments industry is no different.

As such, independent sales organizations and sales agents often find themselves faced with the age-old sales dilemma: compete on price in a commoditized world, or find some edge to help pull them away from the pack, be it specific product offerings, higher-quality service or some new trick that everyone else will clamor to copy.

With the market saturated with agents willing to drive prices lower, finding a way to stand out from the crowd is crucial.

“A key differentiation is the ‘Holy Grail,’ something every ISO struggles to find and then not share with others that might then attempt to replicate,” says David Leppek president of TrxServices LLC, which does business as Transaction Services, a Newark, Del.-based ISO. “The real challenge is that once you’ve determined your unique distinction to then target the customers that would consider it valuable.”

One promised differentiation many sales pitches include is to deliver the “best customer service.” But as merchants hear that promise from a parade of overworked and underesourced ISOs, satisfaction guarantees begin to ring hollow.

A Hard Sell Ahead

So with the new year, the challenge many sales agents now face is to find the ideas to separate them from the crowd. 

For some, the winning idea is technology, specifically partnering with larger merchant-services providers to deliver increasingly sophisticated point-of-sale systems and electronic cash registers as part of their standard sales pitches to develop more long-term “sticky” relationships with high-volume merchants.

“The shift into new value-added services has focused on innovations in technology and ways that technology can be adapted and modified to integrate more deeply into the merchants’ processes,” says David Fish, senior analyst for Maynard, Mass.-based Mercator Advisory Group Inc.

Without those partnerships, many ISOs face a hard sell ahead of them because many other smaller operations have similar product offerings and cost structures.

Many ISOs see the value of high-tech, value-added deals, but not every sales team has access to such a sophisticated array of offerings.

That is where partnerships become an advantage.

Many small ISOs say they see a rich future in teaming with larger operations that can provide a level of sophistication and product offerings that they could not develop on their own.

Unfortunately, the reality of a competitive sales environment means that providing even the most sophisticated device does not guarantee a long-term relationship, thanks to the nature of universal standards. For systems to work on many platforms, they must comply with standards set by national and international agencies, and that means the data and the systems can be moved to other providers whose systems are built around the same standards.

But technology is far from the only route a sales force can take to profitability. Depending on many different factors, some of the established methods and techniques are still returning fine dividends for skilled sales forces.

The trick seems to be identifying each sales team’s specific opportunities. In many cases, a successful product or service can be subjective, depending on individual circumstances and business relationships.

“Something I might see as a huge revenue opportunity, someone else with a poor vendor deal might consider worthless,” Transaction Services’ Leppek says. “A majority of the ISOs selling today have figured out ways to leverage their strategic relationships to focus on the product they can deliver at an acceptable margin.”

At the same time, others might try to compete or feel obligated to keep up, even though they have not cultivated the same business relationships or volume deals, he says.


Look for an expanded version of this article in the January/February issue of ISO&Agent magazine arriving shortly.

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