he numbers are in. Electronic payments topped personal check payments by $7.8 billion over the course of 2003, according to "The 2004 Federal Reserve Payments Study," released in December 2004. In addition, Visa reported card transactions of $197.5 billion for the holiday shopping season, a 15% increase over the same period last year.

According to the National Retail Federation, debit cards were even more popular than cash in 2004. And Bloomberg News estimates that consumers spent more than $20 billion on gift cards during November and December 2004.

Did you notice it this past holiday season? I did. I noticed that the gifts many of us asked for and gave to others didn't need wrapping paper or bows; instead we coveted and bestowed gift cards in record numbers.

For those of us who did buy and wrap actual presents, we learned that there was no need to fight the crowds at shopping malls and department stores. Online shopping has become simpler and more secure than ever.

Fraud protection improves every day and brick-and-mortar companies increasingly discover that online retail is a lucrative way to expand market reach and profits.

Paying with plastic has become more mainstream as customers seek and find a more convenient way to pay, so I expect that the 2004 holiday season will be a record-breaking one for Cynergy Data and most likely for your business as well.

So what lies ahead in 2005? There's no denying that business is booming for people in our industry, but where is it going? Which emerging trends should your business capitalize on?

Specialize, Specialize, Specialize

I already see the beginnings of a major marketing shift for ISOs and merchant level salespeople (MLSs). Before, many sales offices presented themselves as one-stop shops for processing and boasted about a wide list of clients across many geographies and industries.

However, now many offices see the advantage in positioning themselves as specialty boutiques by catering to merchants in specific industry segments.

These ISOs/MLSs present themselves as processors that know an industry inside and out and, as a result, anticipate problems and create solutions unique to that industry. Electronic processing therefore becomes not only a necessary evil, but a value-added solution.

To take advantage of this switch in focus to vertical markets, look at your roster of merchants and consider in which industries most are concentrated. Brainstorm different areas, even untapped ones, where you might offer credit cards services. Recent industry news shows us that vending machines and fast food have broken the bankcard barrier. Look around and see what industries could improve business by accepting all forms of payment.

Once you have a list of target markets in mind, put together specialty sales packages that show prospective merchants how well you understand the specific needs of their industry.

By 2007, I predict we'll see more ISOs/MLSs and processors marketing themselves as experts in narrowly defined vertical markets rather than as generalists. Start specializing now to stay ahead of the game.

Wireless Options Open Doors

As the shape of traditional processing options continues to change, terminal technologies will shift and adapt, too. In 2005, wireless terminals are positioned to be the next invaluable must-have for merchants.

These products make doing business on-the-go really easy by allowing merchants to conduct business anytime and anywhere. Many models are portable and lightweight enough that merchants can carry them comfortably in their pockets.

Merchants who do business at trade shows will save money by going mobile, eliminating those $50- to $100-a-day rental fees for adding dial-up phone lines to their booths.

Also, in the same way that many of us in large cities have given up land lines and instead rely on our cell phones, wireless terminals that function as cell phones will start to make a lot more sense for merchants.

Merchants who use a cell phone/wireless terminal combo benefit from getting two must-have pieces of equipment for the price of one, and that's hard to beat.

Finally, for businesses that do a lot of delivery orders, wireless terminals greatly decrease risk, which keeps processing fees low.

When customers swipe their cards and sign the receipts upon delivery of their pizzas or Chinese dinners, merchants will save on the card-not-present fees and process at the lower swipe rate.

For Every Problem, There's a Solution

Another major trend for 2005 is the "solution." I'm not talking about only solving problems, which never goes out of style. I mean the way that many companies have started to package products and services together as complete solutions rather than selling the individual parts that make a whole.

You can extend this approach to our industry by grouping the services you provide (i.e. a typical processing package consisting of a wireless terminal, good rates, training materials, and intangibles such as great customer service and technical support) and then marketing them as a made-to-order mobile processing solution.

This variation might seem minor; after all, you still provide merchants with the same components and services. But think of it this way: In 2005, you'll not only sell merchants the ability to accept credit cards, but you'll also sell them a complete, no-hassle solution to a problem.

A side benefit of selling solutions rather than products is a major decrease in merchant attrition. Think about it: Most of us sell merchants the same terminals, with similar customer service and technical support, at roughly the same rates.

If the only reason merchants process with you instead of the competition is because you undercut their rates by a few basis points, the next ISO/MLS who walks through the door can steal your merchants away simply by beating your price.

But if you've sold merchants a solution, and I mean really convinced them of the ways your company will take care of them financially and otherwise, then it will take a much better pitch than, "I'll give you a deal that's a few percentage points better than what you're getting now" to get merchants to jump ship.

Training

About 2,000 years before the invention of credit cards, Aristotle said, "Excellence is an art won by training." Today, this is truer than ever.

Our industry is not new anymore, and as our businesses grow in volume, they also expand horizontally to incorporate new technologies and offer customers new payment options.

The opportunities for profit in our industry attract the brightest people from all walks of life, but there's more and more information that they will need. And the veterans, people who have been processing for a decade or more, still have new things to learn.

How successful will any of us be if we never learn how to sell anything but Visa and MasterCard transactions swiped at point-of-sale terminals? Not very.

Cynergy Data has made a New Year's resolution to invest staff and financial resources in training ISOs/MLSs and merchants to conduct their businesses knowledgeably, responsibly and profitably.

We're creating training materials that cover virtually every aspect of processing. And as our gift to you, we'll share these efforts with you via our new series of upcoming articles in The Green Sheet titled, "Things You Need to Know." We hope you enjoy them and find them helpful. Happy New Year everyone!

Cynergy Data is a merchant acquirer that provides a wide array of electronic payment processing services while continually striving to develop new solutions that meet the needs of its agents and merchants. In addition to offering credit, debit, EBT and gift card processing, along with check conversion and guarantee programs, the company offers its ISOs the ability to borrow money against residuals, free training and marketing, and state-of-the-art customer service. Founded in 1995 by Marcelo Paladini and John Martillo, Cynergy Data strives to be a new kind of acquirer with a unique mission: To constantly explore, understand and develop the products ISOs and merchants need to be successful and to back it up with honest, reliable and supportive service. For more information on Cynergy Data contact Nancy Drexler, Marketing Director, at nancyd@cynergydata.com .