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Education

The profit rules – Part 3 But you don't know what merchants are and are not
opposed to paying. Include every fee you would normally
charge on the application. Let the merchant push back.
Then, if a service incurs no expense for you, or if you have
offset loss of the associated fee elsewhere, you can choose
to waive it. But let them know the concession is painful, or
every fee will come into question.
Profit rule 8

If collecting a fee is challenging, make the payment
process easy, or convey that waiving it is a true
concession.

People will pay for items if we make it easy for them to do
so. Previously, for example, if merchants needed equipment
By Jeff Fortney you'd sell it to them, and they'd write a check. But what if
they lack capital? Instead of giving them the equipment,
Signature Payments suggest they pay with a credit card. We are in the credit
card business, aren't we?
arts 1 and 2 of this series on do's and don'ts for
your bottom line were published in The Green Other one-time fees could be paid in similar fashion. Just
Sheet on March 8 and April 12, respectively. be sure to research available options and be clear when you
P This article concludes the series. disclose what they are. Another example is purchasing a
Profit rule 6 POS system, which can cost from $1,200 to $5,000. Many
merchants lease equipment when the purchase price is
Assess fees for actions taken beyond normal processing high. Leasing (when done correctly and ethically) has a
steps. place and can provide tax benefits to some merchants.

What are the normal processing steps? Insert the card and Profit rule 9
run a transaction. You may consider batching a normal A merchant account must provide minimum value. Do
processing step, too. AVS, a step that gives merchants a not work for free; be prepared to walk away.
lower interchange rate and some risk protection, is not.
There is no reason not to charge for AVS. This seemingly obvious rule is often misunderstood.
To clarify, ask yourself what "value" means in payment
Online reporting isn't a normal processing step either. processing. If you did not answer "an acceptable monetary
It's helpful if a merchant uses online reporting, but most return," you are wrong.
rarely look at it and (even worse) look for their answers
there. Charge for it. Consider merchants who say they'll refer you to a lot of
people if you lower your price. It appears the merchant will
Many ISOs have told me that to get an account they give you a list of prospects, call them and encourage them
included something for free, yet a review of their pricing to sign with you. However, the value in this is evident only
showed they didn't offset the lost revenue. In effect, they after the prospect signs with you. If you give the merchant
were paying the merchant to process with them. Do not a benefit for actions in advance, there is no incentive for
give anything for free unless it's offset with higher rates them to follow through. Instead, advise merchants you'll
elsewhere. gladly reward them for all referrals that sign with you.

Profit rule 7 Only provide a reward when income lost is offset by new
revenues.
Never assume the market won't bear a fee. Wait for the
merchant to push back before waiving a fee. Remember, there are benefits in walking away. Selling
payment processing costs you time and effort. If a
"Assume" means to suppose something to be the case— merchant account won't generate the minimum you need
with no proof. The key is proof. Making assumptions in to justify your investment, why sign them? It's better to
payment processing can be costly. Too often I've heard part as friends. Never work for free.
someone say a merchant won't accept a batch fee or other
fee. When asked why, they respond that they just assume Jeff Fortney is vice president ISO relations for Signature Payments. A
it.
long-time payments industry executive and mentor, Jeff is focused on
When making that assumption you're really saying you strengthening and developing partnerships and evaluating new busi-
wouldn't want that fee charged if you were the customer. ness opportunities. He can be reached at 214-458-1379
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