By Allen Kopelman
Nationwide Payment Systems Inc.
Credit card terminals were a novelty in 2001 when my partner Dave and I established our ISO business. Most merchants, when asked who processed their payments, would say, "My bank." This inspired us to name our first website "npsbank.com." We partnered with Imperial Bank of California, later acquired by Comerica, in a great relationship that lasted for many years. Fast forward to 2024 and fintechs are the talk of the town, dominating discussions at the Southeast Acquirers Association conference, which Dave and I have faithfully attended since its first show in 2001.
Last year and this year, I stood up at breakout sessions and said our primary competition is not in this room or down the hall but on the internet. Fintechs rule our industry, I said, and attract younger business owners and others who have been burned by unscrupulous merchant level salespeople (MLSs).
The evolving marketplace inspired Dave and me to put the key word "payments" in our new domain name, "nationwidepaymentsystems.com." Payments is more of a buzzword these days than merchant services or even credit card processing. Today, it's just payments and fintech, which stands for financial technology.
You may ask how MLSs can adapt to this new market and compete against the internet. Not everyone has been willing to refresh old business models and be part of the new digital world. MLSs who are up to the challenge can begin by thinking about why merchants are attracted to big, impersonal technology platforms. Precisely what does big tech have to offer?
Big tech doesn't have salespeople, which for many merchants is a welcome relief. Pricing, rather than being a song and dance, is clearly posted on a website, without drama and with full transparency.
Most business owners are not that savvy and don't take the time to read terms and conditions or fee schedules, which can be a problem. Merchants who don't understand a processor's rules can be shut down or placed on the MATCH list. Who do you think they blame when that happens? MLSs, of course.
Big tech appeals to younger people who prefer text and email to phones. Youngsters love the instant approvals that big tech offers as a Merchant of Record that assumes risk. They don't realize that things can change in a hurry when their merchants begin to process $250,000 a month or more. Big tech will ask a merchant to approve changes to terms of service or provide more information to risk and underwriting departments. Ignoring these requests or failing to provide additional information can lead to logistical delays, frozen funds and closed accounts.
Our tagline, "payments powered by people" reflects our belief that humans are more valuable than AIs, algorithms and big tech. When merchants say they don't care about having a toll free hotline, take it with a grain of salt. Believe me, when something breaks, they will want humans answering their calls.
How well do you know your competition? You need fundamental knowledge of technology to go head to head against big, impersonal platforms. What can you offer that would stop a merchant from saying no and filling out a tech provider's no-brainer online application? You don't have to be an engineer or software developer, just someone who knows the basics, such as the difference between an API and a fully embedded application.
Beware of processor-agnostic solutions that are agnostic today and a competitor tomorrow. These companies are getting acquired at breakneck speed and guess what? All bets are off when ISOs, processors and investors buy these companies and begin to go after your hard-won merchant accounts.
After losing millions in processing to companies that forced our customers to switch to their processing or have their equipment rendered useless, we only work with POS companies that own their technology.
My advice for competing with big tech is simple: don't bring analog tools to a digital game. Read trade publications like The Green Sheet, attend shows and spend 30 to 60 minutes a day on social media. Have an internet presence, at minimum, with an attractive website. Update your LinkedIn and Instagram profiles, and post several times a week. Your blog and social media posts will help establish your thought leadership and industry knowledge. Plan to attend at least one regional show a year to learn, network with fellow professionals and meet vendors in person. The Southeast Acquirers Association, Northeast Acquirers Association, Midwest Acquirers Association, and Western States Acquirers Association host annual regional conferences that are valuable for MLSs.
In an industry where technology is first and processing is second, it's time to up our game. Our business used to change one or two times a year. Today it changes monthly, weekly, even daily. Technology moves fast, and we need to stay current with products, companies, regulations and trends. The game is no longer about price or free equipment; it's about technical capabilities, value and reach.
Want to know more? Keep reading The Green Sheet and consider joining my Facebook group, where we can share ideas and support each other, at www.facebook.com/nationwidepaymentsystems. 
Allen Kopelman, a serial entrepreneur, is co-founder and CEO of Nationwide Payment Systems Inc. and host of B2B Vault: The Payment Technology podcast. Email him at allen@npsbank.com and connect on LinkedIn https://www.linkedin.com/in/allenkopelman/ and Twitter@AllenKopelman.
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