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are able to price smaller merchants with greater margins. Here is what is not going to happen in
Mark Abbey, Managing Partner at First Annapolis ISO-land in 2017: all the hoopla touted in
Consulting, suggested the smallest merchants pay an the trade press in 2016. Fintechs won't be a
average of 30 times more to acquirers than the largest threat to the feet on the street ISO. Artificial
merchants pay. intelligence, machine learning and voice
interactivity won't threaten ISO/merchant
Calling on the treasurer of a Fortune 500 corporation is relationships. Merchants won't move their
quite different than calling on a Main Street merchant.
Typically, the bank providing the credit line for a large businesses to the cloud.
enterprise will ask for the merchant card account as part
of the credit line accommodation. While this is called in 2017. It will become more difficult for smaller players
"tying" and is an illegal business practice, it is a reality. The to compete. In addition, as more merchants sell more
margin for a very large retailer might be 10 basis points products over the Internet, they will find payment portals
or even fewer. The "salesperson" will be a well-dressed, that are specialized to their business needs.
buttoned-down banker-MBA from the bank's treasury
management department. The year ahead
In contrast, about 20 percent of small merchants change Here is what is not going to happen in ISO-land in 2017:
their acquirers every year. Increasingly, they expect all the hoopla touted in the trade press in 2016. Fintechs
the vendor of their cash register system or accounting won't be a threat to the feet on the street ISO. Artificial
software or business management software to include card intelligence, machine learning and voice interactivity
processing in their suite. They are looking for solutions won't threaten ISO/merchant relationships. Merchants
from value-added resellers or independent software won't move their businesses to the cloud. Consumers will
vendors. adopt mobile payments, but adoption will be miniscule.
Mobile wallets won't achieve much traction, until a more
ISOs under pressure universal wallet is introduced. Apple Pay will not achieve
widespread success because so few consumers have the
Traditional ISOs often get shut out of this conversation, right device to use it. Big data, data analytics, blockchain,
although they shouldn't be. Thus, it is more challenging for virtual assistants and the IoT will be irrelevant to the small
ISOs to sign new accounts and stay in business. ISOs and to midsize enterprise.
processors are having difficulty finding MLSs who know
how to sell and know the complexities of the product. Here ISOs and MLSs will be successful to the extent they learn
is part of a solicitation I received recently from a processor what the merchant's needs and pain points truly are and
looking for agents: offer solutions. This will take a few calls, as well as the
ability to cut through jargon and explain PCI and EMV in
• Earn 12x bonuses up to $5000 per merchant Re- clear, understandable language.
siduals up to an 85% split
Merchants know their customers don't care about what
• $300 paid on approval they are paying for interchange; they care about the
quality and service they receive. The same is true when it
• No upfront costs to partners comes to being an acquirer. Most MLSs will make one or
two calls on a merchant and never return. The successful
• No setup fees for most merchants salesperson keeps calling and looking for ways to add
value to a long-term relationship for 2017 and beyond.
• Higher-risk merchants approved
Brandes Elitch, Director of Partner Acquisition for CrossCheck Inc., has
• Unique BINs and ICAs that allow "seamless porta- been a cash management practitioner for several Fortune 500 com-
bility" of merchants panies, sold cash management services for major banks and served
as a consultant to bankcard acquirers. A Certified Cash Manager
• An agent bank program that enables you to mar- and Accredited ACH Professional, Brandes has a Master's in Business
ket merchant services under your own name Administration from New York University and a Juris Doctor from Santa
Clara University. He can be reached at brandese@cross-check.com.
• A sub-ISO status for agents that don't want to as-
sume full liability
• High-volume solutions: load balancing gateways
and multiple MIDs
• Other revenue streams available!
This demonstrates how competitive the acquiring industry
is and how urgent it is for processors to sign new accounts.
Meanwhile, another trend in evidence is consolidation
(for example, Global acquiring Heartland). Larger players
were on an acquisition path in 2016, and this will continue
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