About a year and a half ago, Merchant Data Systems Inc. started a college internship program in an attempt to attract younger workers to the firm.

So far so good.

“It’s just been wonderful,” says Drew J. Freeman, president of the Miami Beach, Fla.-based ISO. The interns, who work in the marketing department, are exposed to myriad aspects of the payments business so they can learn and perhaps become employed full time at the company after they graduate. “It’s the best way to find out what their talents are and where they want to go,” Freeman says.

Mindful that the industry needs a steady influx of youthful beginners, Merchant Data Systems and other ISOs are taking steps to make it happen. They are also attempting to compete with widely known, technologically savvy companies like Square, Google and PayPal, which are actively recruiting young blood.

“I think our industry is at a crossroads. If ISOs aren’t reinventing themselves now, they are not going to succeed,” says Ryan O'Connor, director of product innovation at Vantiv, a processor in Louisville, Ky.

To reinvent themselves successfully, ISOs have to be willing, like their competitors are, to think outside the box—and the industry—to attract young talent. They need to offer internships, develop a greater presence on college campuses, use online recruiting tools and consider changing the commission-only compensation model for new sales agents.

In many ways, hiring young workers today is easier than it used to be. There’s no shortage of young workers looking for jobs, and the younger generation has a greater-than-ever-before familiarity with the payments industry thanks in part to companies like Google, as well as the proliferation of news about the credit card industry. The payments industry will likely become even more attractive to young blood as mobile payments gain more traction.

The industry is “not as behind the curtain as it used to be,” says Mary Winingham, a senior consultant at Omaha, Neb.-based Planet Group Inc.

Yet many ISOs have been slow to pursue the young market. They’re not recruiting on college campuses for the most part. Many also don’t offer training programs geared to newbies or compensation plans that appeal to young workers.

“As a whole, we’re a bunch of older dinosaurs” because of the way we’re used to doing business, says Steve Eazell, vice president of sales and marketing at Secure Payment Systems, a processor in San Diego. “If you continue to embrace the same old-same old, eventually it’s going to kill you.”

One way progressive ISOs are trying to attract younger talent is through the “cool factor.” They are taking a page from Silicon Valley’s book and attempting to offer more open, interactive and creative work spaces, as opposed to a stuffy office environment. They are also offering remote work environments and non-traditional hours. Free food, entertainment and fun team-building exercises are also often included in the mix.

“If you want to attract younger talent and you’ve got a bank environment working nine-to-five hours, good luck,” says Vantiv’s O’Connor.

Having a young CEO (38-year-old Henry Helgeson) and a strong internal referral program help when it comes to hiring younger works, says Jenn Reichenbacher, director of communications at Boston-based Merchant Warehouse. “Internal referrals comprise more than 50% of our hiring and this drives the younger group as well,” she says.

Merchant Warehouse also offers several perks to attract the younger crowd. For example, the dress code is business casual Monday through Thursday, while Fridays are casual. There’s a game room equipped with foosball, air hockey, Wii and more. The company also sponsors monthly events such as a trip to Six Flags, a charity poker tournament and a Halloween contest. Merchant Warehouse also provides workers with free coffee and popcorn.

For many ISOs, hiring young people also means going to where the young people are. Once a month, for example, Freeman of Merchant Data Systems attends an informal networking event at the University of Miami where he talks about payments with numerous students and introduces them to the industry. He gets resumes on occasion and while they aren’t always a good fit, it is an opportunity to get in front of potential employees.

First American Payment Systems, an ISO in Fort Worth, Texas, has also been working to attract younger talent. A few nearby universities offer entrepreneurial concentrations, so the firm has contacted professors in those disciplines to see if they have students who might fit First American’s needs. “A lot of these professors are really open to it,” says Jason Putnam, vice president of sales of the strategic partner channel.

It’s still a new program, but Putnam hopes it will take off. “It looks like it will do pretty well,” he says.

However, not every endeavor succeeds. To recruit young talent successfully, ISOs have to be willing to take some punches and keep rolling.

Last year, for example, Freeman of Merchant Data Systems exhibited at a job fair at the University of Miami. He was hoping to find entrepreneurial students who wanted to become sales agents for the company. The pitch was: “Why be an employee when you can own your own business?”

The ISO got a few recruits from this on-campus effort, but they didn’t work out long-term. Still, Freeman hasn’t given up hope and plans to try again. “You have to keep trying, keep educating, keep getting out there,” he says.

Next time, though, he says he will be sure to offer potential recruits a financial buffer so they wouldn’t have to rely on commissions in the beginning.

Changing the pay landscape is another way ISOs are trying to attract young sales talent. Mike Fox, vice president of sales at Group ISO Merchant Services in Newport Beach, Calif., helped start the company’s internal sales force about seven years ago. It’s more expensive to run than the firm’s commission-only sales force because of the cost of training and paying W-2 employees a salary, commissions and bonus. But it brings in new blood, which is one of the ISO’s goals. The average age for this group is 24, compared with low-to-40s for the company’s external agents, Fox says.

Another ISO, Applied Merchant Group LLC in Apex, N.C., has also begun offering young sales agents a cushion while they learn the basics. About a year ago the ISO started offering new salespeople a three-month draw, in addition to regular commissions.

By this time next year, the ISO hopes to have hired 25 new recruits through this program. It’s more costly to pay recruits a draw, but Jerrell Olive, the firm’s president, says doing so has become a business necessity.

“This industry has changed, and you’re going to have to make some investments if you’re going to survive,” he says.

It’s not all about hiring the youngest and brightest. “You still have to find the right balance,

O’Connor says. “The older generation tends to be more focused on the customer relationship -- the old -school mentality of the customer is always right. They have a much more personalized relationship with the customer. I think you have to have a healthy balance.”

You also have to be able to retain the talent.

“If you don’t make it worth their while, they are going to go look for other things out there that are sexier,” says Eazell of Secure Payment Systems. “Square is sexy. Google is sexy. PayPal has a lot of tools in its tool belt.”

Many ISOs shy away from new blood because they feel they are too small to provide adequate training to inexperienced salespeople. Indeed, many ISOs view adding a training program as an extra they can’t afford or don’t want to devote resources to. It doesn’t have to be complicated, though, according to J.T. Driscoll, president of IMPACT Recruiting Group, who leads the firm’s payments recruiting practice.

With a 20-person sales organization, you’re not hiring hundreds of reps; you might be looking to hire four or five. It might make sense to hire one less and use the money toward a senior trainer who can bring young, inexperienced sales reps up to speed, Driscoll says.

Another idea is to automate the salespeople’s jobs to make their lives easier and alleviate some of the need for training. Provide them leads, for example, and they won’t have to spend as much time prospecting. Also, junior salespeople aren’t going to have the background to know whether their ISO can compete with a merchant’s current ISO. But if your ISO has one person at headquarters supporting the sales force, then you can hire the more junior salesperson and still make it work, Driscoll says.

ISOs also can hire industry veterans and pay them a bonus for training young recruits, he says.

Jeremy Wing, the thirty-eight-year-old co-founder and president of Payscape Advisors, an ISO in Atlanta, doesn’t believe ISOs should shy aware from young hires simply because they don’t have a strong training program. Wing believes the most important factor in successful hiring is not familiarity with the payments industry—it’s hiring someone with knack for sales. “We can’t take someone who’s not a salesperson and make him a salesperson,” he says.

For example, one new hire landed a meeting with a 25-location retailer just a week after completing his initial training. Payscape sent along a more experienced manager with him to the meeting to help move the deal along. “This kid doesn’t really, truly at the end of the day know the first thing about Interchange. But he will. It’s baptism by fire,” Wing says.

Other industry executives believe a strong sales sense isn’t the only requirement. Olive of Applied Merchant Group also wants his agents to have a business background so they understand how to help merchants’ grow. It’s not all about lowering rates for the merchants; it’s about developing a long-term, service-based relationship, he says.

Besides providing in-house training, ISOs should also encourage their young workers to participate in networking groups.

One example is The Women’s Network in Electronic Transactions (W.net), which provide a forum to inspire and empower women in the electronic transactions industry through networking, mentoring and advocacy for women in the industry.

“Our goal at the Women’s Network in Electronic Transactions is to educate women in the payments industry on how to be effective leaders and make their mark on the industry,” said Linda Rossetti, president of Bluestone Payment LLC, an ISO in Peachtree City, Ga., who sits on the networking group’s board.

Acquiring industry executives said they don’t see a need for an academic discipline centered on acquiring. The do believe, however, that coursework related to payments and sales in general might help. They generally support advanced learning initiatives by universities and the industry.

If college-age students are learning about the payments industry through smartphones or hearing about it in classes or seeing it from recruiters, it generates excitement, says John Barrett, senior vice president of First Data Independent Sales in Simi Valley, Calif. Once you have exposure to the market you are more likely to consider opportunities in it, he adds.

Barrett also the Electronic Transactions Association’s Certified Payments Professional credential raises the industry’s educational standards and helps weed out substandard salespeople. “I think it is something that the industry should not only implement, but expand,” he says.

The association administered the first exams for the credential in November 2011 and May of this year, with 343 candidates earning the credential. The trade group is offering the exam again in November.

To take the exam, candidates must have one year of industry-related experience and a high school diploma, associate’s degree or bachelor’s degree. Without those academic credentials, they must have three years of industry-related work experience to take the test.

“It’s increasing the reputation and integrity and credibility of the industry,” Rori Ferensic, the association’s director of education and professional development, says of the credential.


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