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Co v er St o r y
CoverStory

A couple of years later I moved over to VeriFone, where I buy outright or become a minority partner, and was open
remained for seven years. Merchant services has always to a myriad of opportunities.
been a pretty price competitive field. In the last few years,
though, it seems that many merchants are looking for One of my banker friends suggested, “Have you thought
functionality and integration first, then price for services. about the credit card processing industry?” My answer,
For new people in payment processing today, I would rec- “What does that even mean?” After months of research,
ommend they get training, more training and even more I started my first ISO and I have loved the business ever
and still better training. Get a mentor, network at the re- since.
gional acquiring association shows, keep reading The
Green Sheet. Move out of your silo and see the wider world What interested me in our industry? I had never heard of
of payments. Opportunities are everywhere; keep striving residual income, but now I love it nearly as much as I love
to qualify for the next opportunity. my wife and children. I have become so enamored with
the concept of residual income that I even wrote a course
2. I have seen these developments change the payments and book about it called The Power of Residual Income – You
industry: seamless, secure ecommerce processing; pay- Can Bank on It.” As I have educated our sales team, if you
ments gateways that route payments to almost any pro- want to give yourself a bonus, just close another merchant
cessor; APIs that link payments to existing enterprise soft- account.
ware; omnichannel payments; and the advent of e-wallets
and participation of Apple and Google. When I entered the industry, many of my business men-
tors and advisors said to me, “The industry is overcrowd-
All of these have made it easier to get payments processed. ed, commoditized and to look for a different industry.”
As a result, payment processing itself has become very How wrong were they? Upon reflection, and as I think
commoditized. I recommend to all of my clients that they about my future in the industry, I do believe three over-
develop their own integrated payment solutions, ecom- riding themes now exist for people considering entering
merce and POS. Technology solutions need to be end-to- our industry: 1. Bundling services and creating a program
end and proprietary. Without your own technology, you versus selling a rate; 2. The integration of technology and
are not differentiating your portfolio, and the value of payment processing embedded into SaaS-based systems;
your portfolio will diminish. and 3. Niche marketing to own and conquer a specific in-
dustry vertical.
3. For years now, merchants have lobbied Congress and
regulators that core payment processing in the USA is too As we develop a merchant base, whether it’s 100 or thou-
expensive. At the same time entrepreneurs have attempted sands of merchants employing your systems, there are, of
to disrupt the payments industry. Not many of the disrup- course, other products and services to offer your valued
tors have significantly cut the cost of core payments pro- customer base to derive incremental recurring revenue.
cessing. Aside from the Durbin Amendment, there have
not been major shifts in credit or debit processing costs. Although our industry has become more competitive,
That may be changing now, as there is increased interest more technological and commoditized with rates still
in trying to remake the cost of processing. being an important facet of the sale, one business adage
remains—the relationship with your customer. I have in-
4. Take the long view. Be transparent and treat people the stilled into our team that a business person would rather
way you want to be treated. Get a coach and a mentor. De- buy a “good” service from a “great” salesperson.
velop a plan for a 30-year career. No one succeeds alone.
Have confidence in yourself and in your team. You are Be a great resource for your merchant, stay in touch and
better than you think you are. And you can be even better provide value. With this attitude, your rates and whether
tomorrow than you are today. or not you are a few basis points higher than a potential
competitor, should not be the driving factor to lose a mer-
Jeff Shavitz chant.
ToolBox Payment LLC
Having worked with many PE and venture firms through-
1. through 4. Time Flies. I joined the payments industry out my career, the payments industry is and will continue to
nearly 30 years ago and until today, I candidly didn’t real- be a hot industry for many years to come. Many driving fac-
ize that The Green Sheet was 40 years old—congrats on the tors, including recurring revenue and constant and growing
publication and being a sounding board and resource for EBITDA, have attracted Wall Street to our industry. I may
our industry. Job well done.
write a future article for The Green Sheet on this topic.
As a former investment banker working for Lehman In conclusion, I want to thank The Green Sheet for includ-
Brothers in the late 1980s, I had rejected business school, ing me on the Advisory Board for 25 years; plus I enjoyed
decided I didn’t love corporate America and wanted to be- authoring Street Smarts a few years back. I continue to
come an entrepreneur. I spoke to many business brokers, read all the issues and learn from your writers and all the
researched companies in a plethora of industries to either
contributors. Congrats again on 40 years!
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