Quick Tip #4: Don't Miss Payment Processing Revenue Opportunities
Written by: Mike MonocelloThere has never been a better time to get into the payment processing business. Many card processing companies are shifting from a traditional ISO/agent business model to a POS VAR model, giving you more card processing choices. The reason for the shift is simple. As a POS VAR, you have what many ISOs and agents struggle to have - a close relationship with merchants and an inherent tie-in to the POS hardware and software being used. Today, POS VARs selling payment processing is a natural fit. In fact, it's such a good fit that there also is a trend of ISOs and agents becoming POS VARs to make landing card processing deals easier.
A couple years ago, I spoke with Michael Milligan, owner of Salinas Cash Register (SCR) about how he uses payment processing to not only help customers, but increase his bottom line. Milligan told me that he includes a Mercury Payment Systems payment processing quote as an option for every POS (point of sale) proposal he creates. Why? First, Milligan believes he has a duty to educate his customers. “A lot of customers presume their current VAR/ISO/agent is treating them fairly and looking out for their best interests,” explained Milligan. “Almost always, this isn’t the case, and they are paying way too much for their card processing.” By showing them what payment processing alternatives are available and teaching them how the industry works, Milligan further entrenches SCR as a trusted advisor. Secondly, the recurring revenue SCR earns as a result of switching its clients to Mercury is what Milligan refers to as ‘mailbox money.’ That is, once a client is switched over, SCR receives a monthly residual check from Mercury based on the card processing activity of the customer. All Milligan has to do is walk to the mailbox.
The residual income we receive every month from payment processing is enough to pay the salary of one of my employees.
If you’re wondering how much work is involved, you may be surprised. SCR works with the customer to collect the customer’s card processing history and some basic contact information and sends the information to Mercury. Mercury turns back a bid to the VAR in about 24 hours. According to Milligan, Mercury is willing to negotiate different terms of the contracts on a per customer basis, allowing SCR to create a truly unique proposal. In fact, Mercury guarantees it can match or beat any competitor’s rates. Once a bid is accepted, Mercury supplies customer codes, which are entered into the client’s POS software. These codes activate a link between the customer and Mercury. Once entered, the switch to Mercury is complete. “There have been instances in the past where we’ve spent days trying to integrate some other payment processor,” said Milligan.
In one instance, SCR met with a potential client about its POS system. Milligan looked at the customer’s processing fees and knew he could do better. “This customer was paying $1,832 a month for its payment processing,” said Milligan. “Mercury did some calculating and created a bid that would save the customer $375 a month.” Meanwhile, SCR gets more mailbox money. How much? SCR currently has 58 clients using Mercury Payment Systems. “The residual income we receive every month from payment processing is enough to pay the salary of one of my employees.”