e asked members of The Green Sheet Advisory Board (AB) to pull out their crystal balls, look ahead to 2005 and consider the following questions:

What is the most important business strategy for 2005? Which technology, product, service or concept would you highlight as the focus for your sales team?

We also asked AB members to write a brief motivational message to merchant level salespeople (MLSs). Here's one from The Green Sheet: The more things change, the more they stay the same. It's a clich‚, but it's true. Your success this year will depend on your hard work, so stay focused and engaged and always be closing.

The AB responses follow in alphabetical order.

"From a legal perspective, I believe there will be a trend in 2005 to spend a little more energy to clean up the paperwork in the many relationships in our business. Acquiring institutions and processors have realized that their revenue flows entirely through their ISO and agent agreements. As a result, I'm seeing a greater effort to renew out-of-date form agreements and redraft them so that they match the industry practice.

"On one hand, this has led to an improvement in the agreements and a lessening of the one-sided nature of so many of them. On the other hand, I have noticed some banks being less flexible in their negotiations over ISO and agent agreements. In the long run, this lack of flexibility will interfere in the business of banks, as the more entrepreneurial and creative ISOs and agents are driven towards more flexible banks.

"I believe the Associations will continue to have their love-hate relationship with enforcement of rules: enforcing a lot of rules against bad merchants, while allowing cardholders and some banks to escape unharmed from various kinds of fraud and negligence. Don't forget, fraud is a part of the credit card business, and is accounted for in the pricing of every relationship in the business ... .

"I would advise any ISO/MLS sales team to focus on customer service. As the business becomes more competitive, and as margins decrease for ISOs, leaders in this business will distinguish themselves by the relationships they have with merchants ... .

"The customer relationship is really what the ISO/MLS is paid to create and maintain. To the extent that ISOs/MLSs are successful in that, then they will be creating for themselves the kind of real lasting residuals that banks and processors are so skittish about promising.

"ISOs/MLSs sometimes feel powerless. They are not. They are the vital connection of merchants to this industry, and they should remember that when giving their 2005 pep talk to their sales teams. You own all of the personal relationships that make all of this industry possible; nurture them and seek the compensation you deserve for the love you give."

"While there may be new equipment, new terminals and new services available to market for each MLS out there, there are more important issues. First of all, some sales reps are being paid residuals and some are not. There is a big difference between service-oriented salespeople being paid residuals and those who just sell equipment.

"I often hear from merchants that they have not seen anyone from their processor since the installation. That's beside the fact that they have an 800 number to call with problems and concerns.

"Merchants like to see their rep once in a while. However, if you're one of those salespeople who sold a merchant a terminal and check reader for $199/month for 60 months, there's a good chance the merchant does NOT want to see you ever again, even if you're the first line of customer service.

"The best advice is to be fair and honest to the merchant. Don't oversell equipment. It has a way of coming back to you. You get what you give ... . Selling rates at near cost just to get an equipment sale is shortsightedness at best. The ISO you work for will not last long if it's not making any money.

"Take a strong long-term view of where you are now and where you want to be.

"Find a reliable processor to write for that has the experience and reputation. These other clowns will be around for a while then disappear. Hopefully you'll find a reliable processor that will pay you residuals in exchange for customer service and long-term income."

"The year 2005 is shaping up to be an extremely important year for the old guideline, 'plan your work and work your plan.'

"It is probable that the economic growth will bring about new businesses and an opportunity to go after fresh merchants. Sell or lease a terminal and a printer while you sign [merchants] up for card processing.

"Although this is an important part of our industry, while you are going after these new opportunities, someone else is going to be after your existing merchant base.

"At this point in time, 'churn' is the most lethal part of our business. Whether you are a large ISO or an agent on the street, 25% of your residual is a lot of money.

"Don't forget: While replacing this lost revenue, you, your company and your processor all will have to spend the lion's share of the new income just to set up the replacement merchants and win their loyalty.

"In 2005 we need to see a resurgence of SERVICE in our industry. I don't mean swapping broken terminals and free printer paper (although both can be important in the eyes of the merchant).

"I mean, 'What can our products (new or existing equipment) and processing (software applications) provide the merchant that no one else now provides?'

"Timely reports, new reports, training and efficiency are all intangibles that we tend to ignore after we have successfully won the merchant in the first place. Do we know what our merchants do? Do we know what problems they face that may be made easier with the innovative use of our own products? How well do we know our equipment? Do we know what new equipment is on the market and what it will do?

"Chances are, as usual, new and/or replacement business cannot afford the latest and greatest equipment. The normal merchant 'just wants to take credit cards.' But that is because that's the only thing they know the equipment will do for them. Imagine if a new or existing client felt that you were giving them much more than card processing, that you were helping them to better manage their own business ... .

"Merchants do not come easily. A lot of time, effort and money is spent to win the account. Isn't it easier to keep them than it is to replace them? ... In a growing economy replacing the dollar volume may be a bit easier; however, reality says that 2005 may not be any better than 2004.

"Plan on keeping your merchant base rather than having to replace it. It's a lot more rewarding. Plan your work around service, and you could be 25% better off at year's end."

"United Bank Card recently announced the launch of our free terminal initiative. I believe this to be a strategy that will change the face of the industry permanently. For decades service-based businesses gave away the product in exchange for the service.

"This can be seen in the wireless cell phone world, alarm industry and cable and satellite TV companies.

"It was only a matter of time before this concept became a reality in the payment processing industry. United Bank Card leveraged our size as a payment processor to be the first in the market with a free terminal solution. The selected terminal was the flagship of the Lipman product line, the NURIT 8320 terminal.

"The marketing benefits of the free terminal concept will allow ISOs to double or even triple their sales potential ... .

"There are no 'gotchas' to this program. There are no hidden rental fees, hidden leases or application fees. And we do restructure our already successful ISO/MLS revenue sharing program.

"To complement the free NURIT 8320 program we are also offering a free signature capture pad and a free check reader. One of the first obvious implications to this program is the lost 'up-front' income from selling or leasing the equipment.

"That is why we are paying an additional $100 bonus on top of our established residual program. The end result being our ISO and MLS partners will be able to build a lucrative residual portfolio two to three times faster with unprecedented merchant retention and award-winning customer service and technical support ... . "I believe that signature capture will replace the debit PIN-pad as the new "lead-in" sales product for 2005. The cost is minimal, the benefits of the service are dramatic and existing merchants and MLSs will embrace it."

"Our goal for this year is to grow our local sales force and continue to grow our reputation and business in the local area in South Florida. We are rolling out several value-added programs to entice merchants to do their processing through us.

"Gift cards will be in a growth period for many years to come, and coming up with innovative ways to package it with merchant services is the key.

"IP terminals will be big as soon as the phone companies make it more affordable and available and the processors are all IP-ready and lower the transaction fee cost as an incentive for a merchant to buy a new terminal ... .

"In this business ... It's all a numbers game. Go out and sell and network, and you will be successful."

"It can be overwhelming to think about all there is to learn in the electronic payments industry. Navigating through Association rules, regulatory compliance, litigation and new technology can be daunting tasks.

"The industry is now selling to merchants who are very knowledgeable about their payment processing options, thus enabling them to shop around for the best offers.

"Cardservice extensively trains sales agents on all aspects of the industry, providing merchants with the innovative solutions that meet the needs of their business.

"Quick service restaurants (QSR) is still one of the few remaining markets that can provide growth for the electronic payments industry. The market is immense with approximately 110,000 locations and an estimated $129 billion in sales. In the past, the QSR industry was slow to adapt electronic payments.

"Yet with the advanced technology available today and increased consumer demand, more and more QSR merchants are moving towards card acceptance.

"Today over 83% of the QSR locations are owned and operated by franchisees, each with the ability to make their own decisions about the forms of payment they will accept. "The stage is set for tremendous growth for the electronic payments industry in the QSR market. Gift cards, credit and debit will play a significant role in the overall growth of QSR because of their appeal to both the QSR merchant and its customers.

"Opportunities abound when MLSs research and choose a target market, become the expert, and devise a business plan to thrive in that merchant arena.

"By partnering with a company that offers stability, innovation and resources, you provide value to merchants while building a successful portfolio."

"EXS plans on staying focused on our core competencies while streamlining and enhancing our internal systems. For 2005, we'll be introducing new advanced payment processing solutions and integration services for our customers.

"We will also improve upon our internal and external training strategies to ensure that we can support the new products and services that are available to our ISOs and merchants.

"EXS envisions integrated solutions, IP-based transactions, new and improved wireless solutions and business-to-business/government Level III processing as some of the hot areas for new payment processing sales opportunities.

"The merchant processing community is going through a dynamic and massive change. Rules and regulations are being enforced, and pricing and integration are evolving. Now is the time to understand and confront the changes.

"This industry is going to offer greater rewards and long-term stability to all of you that face the changes and grow within the new confines. Change, for those of you that are prepared for it, is an open checkbook of opportunity."

"Move away from hardware-based compensation towards value-based compensation. Most businesses commoditize their complements. If you sell phone services, you want the phones to be as inexpensive as possible. For this reason, most phone companies give away the phone.

"If you sell merchant services, you should want the enabling technology (i.e. payment terminals or software) to be as inexpensive as possible. Historically, our industry has marked up both the payment services and the terminal in order to compensate the MLS.

"The trend towards giving away enabling technology such as terminals will alter compensation plans, so MLSs will focus on lower upfront cost-enabling technology such as high-value software.

"Software, integrated solutions and IP processing. The price of PCs is now less than some payment terminals, and the value proposition is much higher because PCs cannot only process IP payments (two- to three-second authorizations) but they also provide integrated solutions with inventory control and accounting on a commodity platform.

"TPI has developed enabling software that is easy to sell and support and allows MLSs to differentiate themselves and compete as we move away from stand-alone, non-integrated hardware towards high-value solutions built on integrated IP systems running on commodity PCs."

"The most important business advice that I would offer for 2005 is to focus on operational excellence. Identify your core business strengths and leverage those strengths into other areas, opportunities and avenues of your business. Focus on operational excellence to deliver a combination of cost, performance and ease of purchase that no one else in the market can match.

"Execute extraordinarily well, guarantee hassle-free services, standardize on a scalable solution portfolio and simplify."

"One of the best things about our industry is the fact that almost everybody needs our service, and that is unlikely to change any time in the near future. While it is true our given profession has a very competitive landscape, if you work hard, be honest and study the nuts and bolts, then oh what a great and rewarding business this is!

"Many years ago, I once told an employee who was concerned about making money, to 'put your head down, concentrate on your pipeline and take care of your customers.' She has made payment processing a career and a rousing success for herself and her family. And those same comments that helped guide her still hold all their weight today.

"Hire the right people and work with the right people, and you'll set yourself up for a win-win situation."