ISOs Attract and Retain Clients with Bundled Payment Services

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Acquirers say they're signing up new merchants and retaining established customers with the help of software that bundles payment services.

One such product — called linked2pay and offered by Oxnard, Calif.-based transmodus — combines mobile payments, online payment forms, email billing and virtual terminals, the vendor says.

All of those services come into play when salespeople from Clearent, a St. Louis-based transaction processor and independent sales organization, approach clients and potential clients, according to Bob Pigozzi, a Clearent district manager.

"We're using the entire bundle," Pigozzi says. "It gives us solutions in one package when talking to merchants."

Having a single vendor for multiple services keeps everything simple for ISOs and merchants, transmodus maintains.

And offering them to merchants can start a conversation that results in a sale, Pigozzi says.

The services "help us get in the door" when one or more of the offerings fit the needs of an otherwise sales-resistant prospect, he notes.

Because of that power to charm prospective clients, he finds the product beneficial even though his company receives no fees or residuals for promoting it.

"Our revenue is derived from the merchant account" that Clearent acquires with the aid of linked2pay, Pigozzi says.

He finds the services fit well with business-to-business clients, law offices, medical services providers, property management companies, auto repair shops and even garage door repair companies.

Once a merchant signs up, he or she registers on the linked2pay site, he says.

Initiating services like the ones transmodus offers typically requires an IT department, but anyone can perform the cut-and-paste startup, according to Pigozzi.

"They can set up in minutes," he says. "It's amazing."

Clearent is maintaining the relationship with transmodus without a formal contract, but another acquirer prefers to define the interaction in writing.

For TSYS Merchant Solutions, the processor's acquiring arm, having a contract can yield a more predictable sales model, says Christopher McNulty, group executive, sales, business development and client relations.

With a formal relationship, TMS can calculate average revenue, track the number of leads generated and determine the close ratio, McNulty says.

"You get a full profile of these partnerships and that helps us to understand where to spend partnership dollars and marketing dollars to grow, because obviously some relationships are more fruitful than others," McNulty notes.

Linked2pay has been certified on the TSYS MultiPASS gateway for about a year, and in recent months, some of the 125 TMS salespeople have been pitching the linked2pay bundled services to merchants. Transmodus also passes along some of its leads for merchant services to TMS.

"They refer us, and we refer them," McNulty says of the partnership.

The services help advance the TMS goal of offering merchants more than just transaction services, he says.

"It takes merchant services from that basic commodity of just doing processing for someone to now partnering with them and providing a more robust software solution," McNulty notes. "It's a little stickier than just basic processing with no value-add."

Linked2pay brings opportunities to work with business-to-business clients that TMS otherwise may not have landed, he maintains.

Unlike so much other software that works only for one industry — such as restaurants or medical offices — linked2pay fits a number of businesses, usually with only slight modifications, McNulty says.

Besides the TSYS certification, the software is certified by most major transaction processors, including Vantiv and First Data, says Richard McShirley, the transmodus chief marketing officer.

Some ISOs charge merchants the $29.95 monthly fee that transmodus collects, and other ISOs choose to absorb the fee and offer the services free of charge, McShirley says. Transmodus deducts nothing from ISOs' card revenue, he says.

The company charges no cancellation fee in the first 30 days, he says. After that, stopping the services requires a $65 fee, less than the $350 to $400 the industry typically collects, according to McShirley.

Although the services work for card and automated clearinghouse transactions, he emphasizes that transmodus is not trying to undermine cards in favor of less expensive ACH.

The company introduced the email billing portion of the package two years ago and gradually added the other services, he notes.

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