Page 33 - GS180901
P. 33
CoverStory
"It all comes down to people truly points on these accounts, and so the profits are huge for the ISO and rep after
understanding the concept," Nern covering the interchange costs and schedule A costs," Shepherd said.
said.
Nern claimed earnings can be as much as three times the residuals from a
Here's how the process works. A traditional card processing account. He said that in virtually all cases SignaPay
merchant negotiates a per-item rate has seen monthly card volumes for merchants that are consistent or up month
with the ISO or MLS. The going rate over month once on PayLo POS. Merchants can change their minds and switch
for most small merchants hovers to traditional processing, he noted.
around 3.99 percent; larger merchants
often can negotiate rates as low as Shepherd predicted a groundswell of merchants offering cash discounts as
3.29 percent, Shepherd said. more ISOs and MLSs catch on to the revenue opportunities. "I wouldn't be
surprised if 25 percent of all new physical location retail merchant account
It is not uncommon for ISOs and sales made in 2019 were cash discounting," he said. What's keeping that from
MLSs to offer a flat per-transaction happening today? "Reps don't know how to sell it," Shepherd said, adding,
fee to businesses with small-dollar "ISOs don't seem to understand that there is no downside for them."
sales (like coffee shops) that want
to offer cash discounts, several Targan didn't point to any downside, but she said ISOs and processors need to
experts noted. Merchants also pay be sure they are indemnified and held harmless for litigation that might arise
monthly fees, usually between $39 from a client's cash discount program. "We recommend that they enter into
and $69. Once merchants sign up agreements with merchants" detailing the purpose of the program and their
for cash discounting, they acquire responsibilities for complying with applicable laws and regulations, she said.
the necessary signage, adjust prices "It can be as simple as a one-page agreement."
to reflect the card processing rate
markup, and train employees on how Patti Murphy is senior editor at The Green Sheet and president of ProScribes Inc. Follow her on
to explain to customers that a discount Twitter @GS_PayMaven.
is available for cash payments.
On the back end, processors deduct
the negotiated fee from each ticket
and deposit the remaining proceeds
from the sale into merchants'
accounts. Typically, the fees are held
in escrow until the end of the month,
whereupon the processors pay all HAS YOUR PROCESSOR • Custom Bonus Structures
accumulated interchange and related FORGOTTEN YOU’RE A & Comp Plans Tailored to
fees, and splits what's left with the Your Goals
ISOs. CUSTOMER TOO?
Not everyone comfortable • Free Equipment Options
selling cash discounts Sundance Payment Solutions’™
non-exclusive partnerships were
Nern said about 60 percent of monthly created with you in mind. We don’t • Generous Residuals
new merchant deals SignaPay signs make you jump through hoops to
are for its cash discount program. succeed. Your job is simple while the • Accessible Decision
Shepherd said he's heard similar support you need is accessible. Makers That Care
reports from ISOs and MLSs that
understand the business case and are We also know exibility is important. • Franchise Opportunities
gung-ho on selling cash discounting. That’s why our partnerships can be
But many ISOs and MLSs aren't yet tailored to t your needs, strengths and
keen on cash discounting. "The issue goals. Because it’s your career, and at • Large Account Bonuses
is that it's a completely different pitch Sundance, you can build it your way. Up to $10,000
than standard processing, so reps are
either selling cash discounting or not BOOST YOUR INCOME Earn an extra $2,500
selling it," Shepherd said.
IMMEDIATELY for your rst 5 deals!
Both Nern and Shepherd have found
that the draw for ISOs and MLSs that JOIN OUR TEAM: 866.826.7578
understand cash discounting is better
residual streams. "I would estimate www.sundancepayment.com/apply
the average markup is 150 to 200 basis
31
