ISOs have a short window to save their relevance
ISOs and sales agents are undergoing more pressure than ever.
In many cases, payments are now seamlessly integrated into business tools that merchants are already using to run their business, which can limit potential interactions with ISO representatives or agents. In addition, the industry is consolidating and forming bigger players that also have value for the merchant. How’s it possible to stay relevant in the ISO and agent world with added pressures like these?
There’s never been a more crucial time than now to highlight the value of the ISO and agent. It's time to take a deeper look at the new landscape and re-evaluate your business strategy.
While taking a hard look at business goals, there are three crucial areas all payment professionals will want to cover. Many will want to take a deep dive into their current partner relationships. Some will consider buying or developing software. Others may explore the possibility of becoming a payment facilitator. These options can be a game changer for the right company.
A perfect starting point is your partners. Which ones are adding value to your organization? Which of those aren’t giving you the tools to successfully close a sale?
If you decide your goal is to continue to be a marketing and sales organization, then finding and assessing partners is a crucial step. Whether you are evaluating an existing partner or searching for a new partner, the key is to find someone who wants to be invested in your business and that the two of you have a mutual understanding of each other.
Most important, don’t forget to trust your gut. You know your business best, and if something doesn’t feel right, maybe it isn’t.
Assessing your business to see if you can buy or sell software is not an area to take lightly. This takes a lot of capital and planning. Your business also should be in a position to invest properly in the product skill sets that are necessary.
Begin by researching and reviewing those software players in your key verticals. Once you have a list of the big players, assess their business and strategize if you will approach them as an investor or a close partner. There’s a lot of acquisitions going on right now combining sales and software to compete more effectively. Software vendors need people that can sell and if you’re able to offer what they need, you’ll have their attention. Be flexible and open to finding out how both sides can make the most out of the deal.
If you determine you can buy or develop software, then take a hard look at your strengths as a business and make sure it lines up with needs of your merchants in the future. There’s time to readjust now, if needed. Going this route allows you to service your merchants’ payment needs more completely, so it will be more difficult to get displaced.
What happens if you go through your vetting process and find it’s going to be too large of an investment or you don’t have the proper people in place to be able to do it well? Switch gears and explore partnering closely with your software vendor.
The topic of payment facilitation continues to be a hot one to those savvy about payments. Some processors today have programs that allow partners to sidestep legacy systems and compliance requirements dictated by banking relationships.
Sure, there is heavy attraction to unlocking new business models and offering instant onboarding, all of which can help enable your growth. That said, it's important to realize the risk, operational complexity and resources required to take this leap.
For any growing ISO, the best thing is to understand that becoming a payment facilitator is a target to hit as your business scales. To fully grasp this reality, do the research. Does your current partner offer a payment facilitator program? How does it stack up to the other programs out there?
As the industry evolves and as your business strategy evolves, you may find that becoming a payment facilitator is an option and you'll want to be ready to move, quickly.
The value in being an ISO and sales agent has always and will always come down to suiting the evolving needs of the merchant. In addition to the important face-to-face interaction, merchants depend on you to decode what’s happening in their industry better than they can do themselves. In the vast ocean of processing, businesses are attracted to those who are best equipped to resolve their issues more quickly. Plus, the benefit of that personalized approach will always be a constant. Those that can supplement that with a tech-centric perspective will reap the benefits.
Things move so incredibly fast and it can be hard to find time to take another look at your business strategy, especially when certain tactics have worked well for many years. It can be easy to fall back on what worked in the past. However, now is the time at the very least to re-evaluate your strategy. As consumers begin to adopt payment technology that hasn’t existed in the past, some areas of your business may stay consistent, but other areas may need to change for the better.
It’s an exciting time for the industry that may not only pay off for your business, but perhaps elevate it to areas that open new doors. The sky is truly the limit and it’s going to be a worthwhile ride if you’re up for the challenge.