New software helps salespeople negotiate merchant services contracts and could slow the “race to the bottom” in pricing, says the vendor, San Bruno, Calif.-based Nomis Payments.
“We’re applying sophisticated analytics and simplifying it for the front lines,” says Steve Bradford, Nomis president.
As salespeople make concessions, Nomis Discretion Manager displays the consequences on a an electronic tablet or laptop while the negotiation unfolds, Bradford, says.
That way, sales agents can sign up merchants at the highest possible rates, thus increasing profits and building a better merchant portfolio, he maintains.
The software presents some screens intended just for the sales agent and some to share with the client, Bradford says, noting that ISOs decide at the outset how to use the screens.
The product also provides a “proposed set of terms” for the negotiation, based on the merchant’s type of business, the history of the business, geography and other factors, Bradford says.
Extreme competition among ISOs and the resulting downward pressure on pricing makes the timing right for the product, he contends.
“One of the biggest challenges in acquiring and processing is this race to the bottom that’s been happening,” Bradford says. “ISOs are motivated by volume, and they’re positioning with lowest price to get merchants to switch processors.”
The largest acquirer in Europe, UK-based WorldPay, is already using Discretion Manager, and several U.S. super ISOs are in discussions with Nomis, he says.
So far, Nomis is offering consulting services and customized versions of the product to large players, but it intends to introduce an “off-the-shelf” version for smaller ISOs in September.
The top 10% of sales agents may not need Discretion Manger, Bradford says, but they tool should greatly benefit the other 80%, particularly the 20% just getting started.
This summer, Nomis plans to test a retention tool that uses much of the same technology as Discretion Manager and also enables salespeople to show how their offers compare with industry benchmarks and how competitors may not base their offers on facts. That product could become available in the fall.
“If someone has come in with a low deal, this gives sales agents the tools to articulate that what [the competitor] is offering isn’t really true,” he says.
However, having the right prices at the beginning is itself a retention tool because it eases the burden or renegotiating, Bradford says.
Nomis, launched in 2004, has specialized in pricing and profit management for financial institutions, Bradford says. The company helped banks obtain portfolio objectives, which could include driving businesses, increasing profits or both, he notes.
When the company sought new ways to use the technology underlying that business, they saw the need for automated pricing in the acquiring business.