or years the payments industry has thrived on one simple term: swipe rate. Day in and day out, as merchant level salespeople, you approach merchants with the question "What is your swipe rate?"

While this is a good conversation starter, in the end it's a zero-sum game of clever pricing that often leads to merchant churn. Plus, the downward price pressure puts a squeeze on your margins.

The industry has matured, and now you're armed with a solution portfolio that goes beyond credit swipe rates. The challenge is to understand merchants' businesses and align solutions with opportunities that will help their bottom lines. This month I'll explain opportunities and explore solutions for the automotive industry. Next month, I'll tackle some other vertical markets.

Conversation Starters

Too often in this business, sales reps approach merchants, assess the terms of their current processing contract, offer a better swipe rate and either win or lose their business, all in a matter of minutes.

Before you know it, within six months to a year, competitors will approach your merchants with a better swipe rate, and you will lose the relationship and residuals. Taking the time to ask the right questions gives you an opportunity to not only win the processing deal, but also to sell a variety of residual-producing applications and, ultimately, improve merchant retention.

Chances are good that most merchants currently process only credit card transactions, so you really have an opportunity to win their business and begin relationships that continue to deliver value and new revenue streams. Take some time to understand the merchant business environment. Structure the conversation around the unique challenges facing their business: cash flow, accounting/reconciliation paperwork, average ticket size, risk factors, industry-specific processing needs and opportunities to improve the customer experience.

Now align the challenges with payment solutions. Do merchants take a lot of checks, and if so, would check authorization or conversion programs improve cash flow and reduce their check losses? Would merchants improve customer service by supporting an electronic gift or prepaid card program?

Would consolidated reporting and funding free up business owners' time spent reconciling statements? Would merchants benefit from a dynamic currency conversion (DCC) rebate? Do they have a high-speed Internet connection or a PC-based POS system?

Explain the business benefits to retailers before you review specific product details, including:

Improved Cash Flow

The best way to improve cash flow is to get faster funding on all payment methods. Partner with an acquirer that provides 24- to 48-hour funding on credit, checks, gift cards and foreign DCC transactions.

Reduced Risk

Advanced fraud monitoring and control features extend peace of mind to merchants, particularly those processing e-commerce transactions. Merchants who have a high average ticket, or accept out-of-state checks, will benefit from the guarantee of electronic check services.

Consolidated Funding and Service

Why should merchants deal with multiple vendors for each payment type? Choosing an acquirer that provides a total solution including credit, debit, check, gift and DCC means that merchants spend more time on their business and less time on paperwork and problem solving.

Attract More Customers

Merchants who support value-added services such as prepaid/gift cards are armed with new promotional vehicles to attract new business and keep customers coming back.

While all merchants will benefit from bundled solutions, certain vertical markets, including the automotive industry, are prime candidates.

Driving Business to New Levels: Automotive Opportunities

Let's take a look at the unique challenges of the automotive industry:

• Cash flow constraints
• A varied and demanding customer base
• Payment is due often after services are provided
• High ticket values
• Emergency services provided to unknown customers
• Higher than average risk factors

Automotive dealers and repair shops will improve service and their bottom line by partnering with one acquirer for all their transaction processing needs.

Credit, Debit and Purchasing Cards

Credit card acceptance is only the tip of the iceberg. Accepting debit cards is a smart way to expand payment options; not only are they very secure, they typically cost less than credit card processing. Purchasing cards expand opportunities with business clients.

Fleet Cards

Fleet cards are special-purpose cards designed for companies that own and maintain car or truck fleets and need an efficient method to fuel and perform maintenance on these vehicles. Fleet cards allow businesses to better manage expenses for their car or truck fleets and provide enhanced usage and purchase reporting to the fleet managers. Typical users include:

• Government agencies (post offices, highway patrol, municipalities, military)
• Delivery/courier services (UPS, etc.)
• Utility and service repair/installation companies (cable, phone, satellite TV)
• Consumer goods distribution companies (soda, snack foods)
• Trucking companies
• Businesses that staff a local field sales force (pharmaceuticals, etc.).

Attract new merchants who accept fleet cards by offering an integrated/multi-application terminal solution that not only supports split-dial capabilities to connect to the fleet issuer and the bankcard processor, but also combines all settlement and reporting functions.

Plus, in many terminal fleet environments, fleet card issuers pay merchants on a 30-day cycle for settled transactions. An integrated solution processing network, such as the NOVA Network, provides a specialized fleet/bankcard terminal and the ability to settle most transactions through one network, usually daily.

The value proposition to merchants is simple and rich: They have one solution for all payment processing, they have access to consolidated reports and statements, and they receive their deposits much more quickly.

Electronic Check Conversion

Automotive merchants can eliminate the paperwork and hassles of accepting checks while reducing the risk associated with checks written for emergency services. Partnering with the same processor for credit and electronic check service improves merchant accounting and reconciliation processes because funding, reports and statements are consolidated. Another benefit: Merchants have only one number to call for customer service.

With an average ticket of $500 - $600, a returned check is more than a minor inconvenience to automotive service shops. A bad check might wreak havoc on cash flow since the merchant already performed the service. Electronic check guarantee services extend peace of mind allowing shop owners to accept out-of-state and other checks that they wouldn't have felt comfortable accepting before.

Electronic Gift and Prepaid Cards

Merchants can use gift cards as a great promotional tool to attract new customers. Sending gift cards to prospective customers, or giving gift cards to customers who have just purchased a car or motorcycle, are very effective tools as part of an overall marketing program.

Merchants will keep customers coming back for ongoing services such as oil changes, car washes and annual service plans. And the auto after-market is ripe with opportunity to get more business out of motorcycle and car buffs by selling upgrades or logo merchandise. Plus, customers often spend more than the value of the card, which definitely adds to the merchant's bottom line.

Understanding a merchant's business transforms you from a "swipe-rate seller" to a trusted business advisor.

This will allow you to sell more services upfront, gain more residual revenue and keep merchants on the books.

Michelle Graff is Vice President of Marketing for NOVA Information Systems. E-mail her at michelle.graff@novainfo.com .