ISO with a higher calling

Metro Merchant Services founder and President Mark Landis received his first merchant level salesperson (MLS) training in a motel room. Trainees crammed into the tiny room reserved by an ISO.

They were given a pitch book and trained on selling a Hypercom Corp. card reader; the instruction basically explained how to tell merchants the reader was the smart-card-ready terminal of the future. Residuals were not even mentioned. Still, Landis was hooked on the payments industry and educated himself by reading The Green Sheet.

Landis signed on with a different ISO three months later and learned about residuals. It bothered him when a sales manager told him not to take calls from merchants or to tell them to call the help desk. He understood the ISO's rationale: his job was to sell. But he never liked that policy.

"You don't ignore your customer," Landis said. "I was the guy that sold them the product or the service and I thought I had a responsibility to make sure their needs were met." Landis' mantra was "service customers well."

Landis excelled with that ISO and grew even more excited about the industry. But he still thought there must be a better way. He had always known he would one day be working for himself.

Having it his way

In 1998, Landis formed Delaware Merchant Services (the legal name of Metro Merchant Services) to do business based on his own value system. He opened up shop on his kitchen table. He remained a one-man band for many years before he added his first MLSs. He knew from experience what not to tell his reps.

As the company grew, so did its customer service needs. In 2001, Landis' wife Karen came on board to answer calls so he could stay in the field without neglecting customer support. Now, Metro serves more than 3,000 merchants.

After seeing many merchants seek assistance from help desks and be burdened with long hold times and inexperienced customer care representatives, Landis decided his customers would have a very different experience. "I would often know as soon as they called what was wrong," he said. "Or I would three-way them with the help desk because I can speak the language better than my merchants could. I really filled in that service gap."

Metro has also been successful with association marketing. It is endorsed by Maryland Motor Truck Association, Power Heavy Duty Truck Association, and the Billiards Congress of America Association, among others. "Several of our agents are in referral groups like BNI [Business Network International]," he said.

In addition, Metro seeks referral partnerships with software companies, accountants and many other segments that have influence over groups of potential clients.

The ISO challenge

Going that next step and becoming an ISO brought further challenges. "A lot of agents think that they can just sign up to be an ISO, and it's business as usual like when they were an agent," Landis said. "But what they're seeing is the tip of the iceberg."

Joan Winnington, Operations Manager for Metro, said she and Landis encountered several new ISOs at a recent conference who were "good street salespeople, and they were just completely blindsided by what it took to become an effective ISO."

For Landis, the benefits of becoming an ISO included having greater control over the service he could provide. "It was always frustrating to me as an agent that I could only do so much to help my customer," he said. "There was so much that was out of my control.

Well, we're not fully in control being an ISO, but we have a lot more control. We have access to more of the reports and data and interchange ... so that has been a big thing."

He said that, as an MLS, he would never receive enough information to know what the ISO's costs really were, based on the actual revenue generated from accounts. Consequently, he never knew if the ISO was paying him correctly.

"We have pulled back the curtain of mystery of residual reporting with agents and ISO partners," Landis said. "We give them direct access to their portfolio of merchants via Business Sense, a portfolio management tool created by Chase Paymentech."

Quality time

In addition, Metro has developed new marketing programs designed to attract new customers in today's strangled economy.

Once acquired, few merchants leave Metro, Landis said. During a recent review of the company's portfolio, the Chase Paymentech Solutions LLC analyst told Landis that Metro had the lowest attrition rate he'd seen in his five years with Chase. "I think that has a lot to do with getting our customers' problems resolved," Landis said.

But rather than resting on its good record, Metro is ramping up its direct merchant contact in 2009. "We're definitely going to be communicating with them more, maybe a couple of calls a year," Landis added.

In the past, Landis dealt with customer service departments that claimed to have fixed problems when in fact they hadn't. He vowed to protect his customers from such difficulties. He said every merchant who calls with a problem will have it resolved, "100 percent guaranteed."

Landis believes Metro's small workforce allows the team to work closely together to resolve merchants' problems quickly and completely.

"If [a merchant] calls up about one issue, we'll do a review of their account, and many times we're able to help them reduce their processing costs just by making them aware of mistakes that they're making at the point of sale," Winnington said.

Landis also expressed pride in his Christian values and said everyone at Metro lives by the same code. "We treat our merchants with respect, and we have good values and good integrity," he said. "And that's something that starts with the President on down, and something that won't be compromised."

Reaping rewards

Landis noted that Metro has grown 1,000 percent in the last four years. "It's kind of neat to see me go from literally a one man, off-the-kitchen-table-type business to 10 employees," he said. "We probably have about 60 or 70 referral partners or agents."

He also enjoys the high-quality lifestyle Metro's success affords him. "It's great to also work with quality people in my organization, and it's nice to work with our agents out there," he added. "It's rewarding to help others succeed." He also expressed delight in the opportunities to meet people, travel and attend regional organizations.

It's a time of transition at Metro, as the company goes from being a Chase Paymentech ISO to a First Data Corp. one - which Landis said will eventually increase the company's list of product offerings. He expects to offer dynamic currency conversion, a POS system, an all-in-one check service and a host of other First Data offerings, including its Money Network Solutions for the underbanked and unbanked.

Losing the lingo

Explaining interchange to merchants isn't easy, Landis said. Payments industry jargon might help industry professionals, but it can just make things more confusing for merchants; they don't need to learn another language; they just need to know what their transactions are costing them, he noted. The folks at Metro start by losing the lingo.

"We just did a seminar not long ago for a group of accountants," Landis said. "We started talking some of that bankcard speak, and so I started converting some of the words.

Metro also devotes time to merchant education. "We'll literally go through their accounts and look at their interchange qualification, explain to them, 'here's why this happened,' for real, not just some canned answer. ... We take extra effort to do that."

Half the battle

Many of Metro's clients are level 4 - defined by the card brands as merchants who process fewer than 1 million transactions per year. The Payment Card Industry Data Security Standard puts level 4 merchants under greater pressure to control fraud risk.

"Fraud has been a much bigger issue," Winnington said. "So we're working really hard with our merchants to educate them because some of them have gotten hit with some chargebacks; they had to hold the liability because they didn't do their due diligence at the point of sale.

So our job right now is really educating them on making sure that they have all the tools they need at the point of sale."

Winnington gave as an example one client with 15 locations. "They didn't have knucklebusters or manual imprinters," she said. "And I talked to their lead guy and said, 'Can we call every location and see if they have them?' And sure enough, nine out of the 15 didn't."

After making certain that all locations had imprinters, Metro educated all the staffers on their proper use, "because that's where they get nailed," Winnington said. "If they do a key entry and they don't take a manual imprint, and there's a chargeback, they're going to lose. So we go to the nth degree to prevent it from happening again."

Winnington said she drove an hour and a half to see one merchant who got nailed with fraud. She found the company had not followed proper procedures.

So she trained the entire staff on what they had done wrong and what they needed to do to protect the business from fraud in the future.

Crunch time

The credit crunch hasn't left anyone untouched. "I'd have to be a liar to say we didn't take any hits there," Landis said. "I mean it's simple. People are laid off. People aren't getting their clothes dry cleaned or buying certain goods and services, so portfolios are taking a hit."

But Landis said the company's overall portfolio volume is going through cycles now, whereas before it was steadily increasing. He attributes some of that to seasonal fluctuations and believes Metro's business model and practices puts the company on solid ground.

"In this day and age of greed, mistrust, bank failures, stock market declines, personal and business bankruptcy filings, I believe that ISO partners and merchants want to do business with someone that they can trust and that Metro is that safe harbor," Landis said.

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