From the March 2010 issue of ISO&Agent.

Many agents were reluctant to spend time and funds to receive additional industry training when the economy was healthy, yet more agents are seeking education during the recession to improve their abilities to better compete for scarce business during more difficult financial times, observers note.

Typically, agents want to be selling services to clients instead of spending time in a classroom or online learning about the industry. However, education is important for agents that want to improve, says Jason Zhang, director of sales at United Payment Services Inc., a Westlake Village, Calif.-based merchant-service provider. "You have motivated people in the field, but if they don't know what they are talking about, they are talking themselves out of the conversation," says Zhang.

The industry evolved without a focus on education, and sales agents are not required to have a minimum amount of training before they begin selling to merchants, he notes.

Industry culture, however, may be changing. Interest in education is on the rise as more agents want to increase their competitive edge and the industry contemplates a possible registration for agents that potentially could include an agent's training or knowledge level as a factor.

Information and courses are available to agents, but not all processors and ISOs do a good job of offering training to them, notes Zhang. Many ISOs will hire an agent, provide a quick tutorial and "close the books," he says. "That is setting up the reps that have the potential to do well in the industry" for failure because they are not trained well.

Training is "really worthwhile" because the agent can improve skills and can interact with merchants more effectively, agrees Adil Moussa, an analyst with Boston-based consulting firm Aite Group LLC. This can lead to an increased number of sales and more revenue for the agent.

While many agents receive product training, relatively few receive training regarding how the industry works overall, Moussa says. Subsequently, many agents are missing vital knowledge they could use to entice merchants to sign up for services, he says.

Without training, "it's very hard to know how to approach merchants. Most of the agents approach merchants the wrong way," Moussa says.

Despite the up-front time and costs associated with training, agents with additional education have a greater potential to sign more accounts and to earn additional revenue in the long run, note observers.


Economy Boosts Education

The economy during the past two years has made merchants less profitable, which has reduced revenue for ISOs and agents, notes Paul Hunter, president and CEO of Sterling Payment Technologies, a Tampa, Fla.-based merchant-service provider.

For agents to reach the same sales results they achieved three years ago, before the recession, they have to have an edge over the competition, and a better knowledge of the market can help provide that. "Only education can help a sales person fully understand" products and how they may benefit merchants, and it will help to gain that advantage, Hunter says.

Indeed, "competition drives a lot of what we do," says Marc Beauchamp, CEO of Performance Training Systems, a Houston-based provider of educational tools and consulting. "When the economy turns down and things get competitive, you naturally have a shakeout in business."

ISO interest in training has increased "more and more" during the past one to two years, says Beauchamp.

The Electronic Transactions Association also is beginning to see an increase in online training course attendance, says Rori Ferensic, director of education and professional development at the Washington, D.C.-based trade association representing the acquiring industry. "We definitely are seeing an increase," says Ferensic.

To help its agents better compete, Sterling Payment is spending twice as much on training than the company did two years ago, says Hunter. "If you are going to be successful in this kind of environment, a salesperson must become expert with differentiating technology and be better at targeting merchants that will benefit from that technology," he says.


Education Beneficial To Agents

Agents that avoid industry training typically say they do not want to spend the time and funds to bolster their education, note observers. Many of those agents believe they can improve their revenue by working harder with their existing skill sets.

However, ISOs and agents that participate in ongoing training quarterly or monthly yield better results than do those that train once a year or less, notes Beauchamp.

"Reoccurring, ongoing training seems to yield the best" return on investment, he says. "It's an outstanding return on investment."

Agents for Sterling Payments tend to sign larger, more- profitable merchants after sales training, says Hunter.

Merchant-service providers also benefit when their agents receive additional education, note observers.

ISOs that provide ongoing training for agents can reduce the number of support calls from merchants and increase sales because the reps are better equipped to answer merchant questions and sign accounts, Beauchamp says.

And customer-service staff field fewer calls when agents are well trained, says Zhang. "If they can tackle soft issues where the merchant doesn't need to call us, ... then we don't have to service as many customer-service calls," he says, noting less-educated agents tend to forward more merchant calls to the customer-service department.

Merchants want to work with knowledgeable agents, notes Zhang. A merchant "will switch [providers] because they like you and trust you," he says. A merchant is less likely to switch providers over a cost savings of $20 a month in fees.

Education bolsters agent confidence, notes Beauchamp. "By giving them training, you get into the psychological component of helping to build their confidence," he says.

Agents become fearful without a solid base of industry knowledge and are less confident during sales pitches to merchants. This makes them less successful overall, Beauchamp adds.

Many times agents fall back on price discussions with merchants because they lack the confidence to sell based on other products or services, agrees Hunter. Additional education throughout the industry may help alleviate the tendency for agents to focus on price with merchants, he says.

Despite the potential benefits ISOs and agents may receive from training, some hesitate to spend the time and funds necessary to receive training for fear agents will quit or move to a competing company, says Mark Dunn, founder of Field Guide Enterprises LLC, a Hartland, Wis.-based consulting firm. The failure rate among new sales agents also is very high, he says.

Sterling Payment agents that choose not to participate in training "generally just say that their income is down, and they will continue to do the same thing they have been doing and are going to do more of it," says Hunter.


Types Of Training

The typical training method for many ISOs involves giving new hires a short overview of products before sending them to meet with potential clients, says Dunn. With "classical" training, "you meet your rep in a coffee shop somewhere, and they hand you a binder" of sales information, he says. "They say read it, and that's it."

Effective sales training, however, should include education about the industry and a review of basic selling skills, he says.

In-person and online classes are the two main methods of education, says Ferensic. Live classes provide networking opportunities and instructor interaction, while Web-based classes typically are more convenient for many agents because they do not require travel, and the agents often can complete them at times that best fit their schedules, she says.

A range of training topics also exists, including general sales, product and industry-specific training, notes Beauchamp. "Those are all valuable because [agents] need to know what they are talking about," he says.

The increase in interest the ETA has experienced for online training is positive because the ISO industry overall moves more slowly in terms of online education, Ferensic notes.

However, some ISOs see the value of ongoing training and want "to invest in improving themselves and their agents" to remain successful during the recession, says Beauchamp.


No Standard Education System

The industry has evolved without a focus on education, says Zhang. Other professionals, such as certified public accountants or stockbrokers, typically must acquire certification before they are licensed to work in their industries, he notes.

"The funny thing about the merchant-services industry is we don't have a standardized system for our agents," says Zhang. "It's just a shock with an industry of our size and our responsibility to move money that we don't have a standard education program to teach the basics and test" agents, he says.

A majority of industry insiders who participated in a recent survey, 68%, favored creating different levels of registration based on such factors as training and knowledge level or one's status as an independent contractor or on a payroll, according to the ISO Coalition, a payments industry group on, a social-networking Web site run by LinkedIn Corp. The group last spring surveyed members about the concept of a registration program for merchant-level salespeople. The survey did not categorize respondents by profession, whether ISO, merchant acquirer or processor.

The survey also found that 68% of the 126 respondents agreed that registration would help the industry regulate itself. The remainder, 32%, said such a scheme would not help.

A sales-agent registry would enable a merchant to verify certain aspects of the sales agent, though details of what would be included in such a listing have yet to be determined, says Anna Solomon, a leader of the ISO Coalition group on

A fundamental element of the registration should be a criminal background check, according to 88% of the survey respondents. And, because multiple responses were accepted, 74% wanted an industry-knowledge test.

Many respondents favor establishing a new organization to maintain the registry. Thirty-nine percent preferred a new organization, and 29% selected card brands Visa Inc. and MasterCard Worldwide as overseers. Some respondents, 18%, selected the ETA, and 14% selected "other."

Visa and MasterCard already separately maintain registered ISO lists, but they do not extend to the ISO sales-agent level.

The economy has created difficulties for many ISOs, which have lost business and revenue because of drops in consumer spending. Education could counter the subsequent slide in merchant business by helping ISOs improve their sales pitch to secure more deals.

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