With the U.S. election now behind us and a new presidential administration taking charge in the new year, there will be inevitable disruptions and challenges, along with opportunities. Seeking expert insight, we asked members of The Green Sheet Advisory Board the following questions about what lies ahead:
3. What about the landscape for small businesses, as well as for small versus large ISOs as we move into 2025? How can they meet their distinct challenges and prosper?
As always for opinions shared in this publication, the views expressed are those of the authors and not those of The Green Sheet Inc. We wish to thank the industry leaders who took time to contribute to this effort. Additional answers we receive will appear in a subsequent issue of the magazine.
Personally, I have some real concerns with the outcome of the election. And the new administration. Had the Democrats maintained control of the Senate or took over control of the House, I would not have had these deep concerns for our country and the economy.
I do not think a lot of Americans understand the concept of tariffs or what eliminating different agencies will have on their pocketbook, and the consequences on their lives. I have never been in favor of radical ideas when it comes to government that are preached by the minority, and I have always been in favor of the truth. I truly believe the American public has been misled, and the lower and middle class will pay for it. First, I do believe that out-of-pocket spending will increase in some areas, such as buying a new car, appliances, clothing, electronics and any items manufactured outside the United States. Customers will be paying more for any imported item, but the basket of items purchased each week will decrease.
If you are on a fixed budget, like most Americans, the number of units purchased will decrease. I believe the costs of goods and services again will dramatically go up, taking money out of the pockets of Americans, especially those on fixed incomes who can least afford to have less buying power.
Tariffs on goods imported from Mexico, Canada and China do not help us as the driving force of the economy, They simply add to our costs. Potentially cutting programs, such as Social Security, Medicare, Health benefits, doesn't help middle or lower status Americans. Tax cuts for the very wealthy don't help you or me, but a select tiny proportion of Americans. The concept of Trickle Down economics has been proven over and over not to work. So, I am afraid, our country will get into further debt, and more folks will have to live with enjoying less.
Our company's business will continue, and we do hope to continue to grow, but I do see more businesses having trouble paying the bills and going out of business, so our expectations are to have higher attrition. As a medium sized ISO in the industry, we have a strong financial foundation and great people working for us. I feel there is always a place for us based on our level of service, low costs and relationship building.
We have continued to look in multiple directions for services we can offer that are profitable. We have reviewed some old basics, to see if there are profits to be had, where we offer another company's product, without us having to support the business. We are also looking at changing our structure and trying to have more in-house sales reps in order to generate more profitable accounts.
We have tried multiple companies for lead generation, but have not found one in the industry that does what they say they are going to do. So supporting our agents or direct sales folks with leads is a priority for us this coming year.
The disadvantage an ISO has today is in marketing spending and developing our own POS system to remain competitive. POS companies today have evolved over the last few years, where they no longer allow us to include our processing with their systems. We have been searching for the right company to work with that is known and understands we can bring a lot of business if they stay away from the processing.
We will have to see what 2025 brings: lower loan rates, gas prices and credit card interest rates. Gas/oil drives the economy of the USA and the world—no matter what anyone says. When money is tight and prices are high, the first things people pay for are housing, utilities and food. After that, they are watching every penny. If gas goes down, prices will go down, but that takes time.
The other thing to look at is that in 2025, many real estate loans are going to come due, and if interest rates remain high, we will see many commercial foreclosures.
One thing driving retailers and restaurants out of business right now, even forcing offices to close and people to work at home is property taxes. We see it here in Florida—a shopping center sells, the new owner has higher property taxes than the previous owner, and the rents skyrocket. Then the businesses can't sustain that and stay open, and they close or move.
Local governments need to look at how to deal with that so that they are not running businesses out of town. Same with apartment complexes. If rents go up, workers have to move, and they will look for work closer to home. A big problem in the USA right now is how to balance that out. Businesses owning their buildings have a great chance to survive and keep costs down.
The cheese always moves; we have a great plan in place that we have executed to sell more non-agnostic solutions to businesses. Partner with software companies so that they can bring in more customers and make money off those relationships.
I hope that Senator Durbin will not be successful with the CCRA in 2024 or 2025. He is a major pain. Why he does not question Stripe, Square, Shopify and other companies who use those services about their fees is crazy.
ISOs need to think about software, as software is the new ISO. One of my friends said, "TISO, Technology ISOs."
Agents need to change their mindset from being a credit card person selling merchant services to being a solution provider. We need to sell solutions to merchants the same way as our fintech competitors are doing. How to meet these challenges: partner with ISO who have the technology; partner with ISV companies and sell solutions. Technology and software are the future of our business.
I think with the incoming administration the economy will boom once again due to the policies that will be implemented that are very pro-business. The prior administration was just the opposite, which caused many businesses harm and, in many cases, to close all together.
The markers I will be focused on primarily will be interest rates and tax policy. When these two markers are reduced this will create a windfall for the economy and the country as a whole. Businesses will be more inclined to expand when money is cheaper with lower interest rates and take on risk if they are able to retain more of their money with lower taxes.
I think many businesses like mine were waiting for election results to decide plans and initiatives for 2025 and beyond. A healthy pro-business environment requires some stability and faith that leadership in this country has the best interest of their citizens.
The last four years have been brutal because the many policies discussed and/or implemented were the very opposite of what fosters a healthy economy. Various policies that were discussed but not implemented, thankfully, would have been detrimental to the economy and carried an America-last theme.
As a direct result of the election, Elite Merchant Solutions is going to look once again to open a call center internationally. We opened an office in Medellin, Colombia, in the beginning of 2020, and we had to shut it down about a year after opening due to the massive complications due to Covid. It was not a complete loss as we learned a lot, and now that we are comfortable with the economic environment, at least for the next four years, we are ready to do it again.
I think the landscape for small and large businesses looks bright as we move into 2025. Certain policies, regulations and high taxes that are beyond the control of any business can be extremely deflating.
The new administration is very pro-business, and this will allow companies both large and small to prosper and reap the rewards for the risk they endure. 2025 will likely be a year of major acquisitions as interest rates are likely to start creeping down, and this will certainly benefit larger companies in the market for high value deals. In our industry small ISOs still have an edge versus the large ISOs when it comes to personalized service.
There are still many merchants that value this "red carpet service" approach the large ISOs cannot provide outside of their exceptionally large clients. If you are a small ISO and do not provide exemplary service, which is our only edge versus the big boys, there is a good chance 2025 will be extremely difficult.
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