ith the beginning of each new year, I can't help but to contemplate what it will bring. Will it be a breakthrough year for you as a merchant level salesperson (MLS)?

Will new products change the merchant marketplace? Will competition increase in an already fierce arena? What will be the most compelling issues in the coming year?

As one of its contributing writers, The Green Sheet asked me to give my point of view on these topics.

No one has a bankcard crystal ball to predict the future, but based on what transpired in 2004 and how the industry met the challenges that year, I see a number of opportunities in 2005.

New Technologies

Emerging technologies changed the face of payment processing in 2004 and created a competitive edge that made the difference for you as MLSs. This past year was the first year that we all started selling more solutions other than credit and debit card processing services.

New terminal equipment technology served as the key to this transformation. VeriFone Inc.'s Tranz 330 and Omni 3200; Hypercom Corp.'s T7Plus; and Lipman's NURIT 2085 all received makeovers.

The terminal manufacturers have seen the future and responded with an updated generation of terminals. I'm not only talking about a better printer or a bigger roll of printer paper; I mean new technology with new services that you can sell successfully.

VeriFone's Omni 3700 series (3750, 3740, 3730 and 3730LE) and Lipman NURIT's new 8000 series terminals (the 8320 replacing the 2085 and the 8000 or 8010 replacing the 3010 wireless terminal) are only a few examples of the amazing technology that hit the industry in 2004.

What does this new technology offer you? Multi-application capabilities with credit, debit, EBT, check conversion with guarantee (or plain check guarantee), gift/loyalty card and prepaid applications, all in one terminal.

And the best part: The terminal manufacturers designed the technology so there's no risk of blowing out your credit/debit download program while adding on new applications.

Residual Opportunity: Check Conversion With Guarantee

Of all of the value-added applications, I believe check conversion with guarantee has had the biggest impact on the market. In the past, the problem with regular check guarantee was that retailers did not always use the service (only when they were processing a suspicious transaction).

So there wasn't much money for you to make. It was a monthly minimum collection business and eventually merchants called in and canceled the service. Check conversion with guarantee requires check imagers, and retailers accept and process every check.

This adds up to a lot of processing volume.

You can also sell check conversion with guarantee at the same rates as credit card processing as well as a cost of 1% and $0.10 per transaction (which is much lower than interchange cost), so there's a huge amount of residual income that you could have earned in 2004 and can still earn in 2005.

The Future: Super Speedy Transactions

Another advancement that will prove significant in 2005 is the Internet protocol (IP)-based POS terminal. In the last year, terminal manufacturers successfully implemented the technology and the processors Class-A certified it.

However, as an MLS, you haven't quite begun selling this technology. My prediction is that 2005 will be the year IP takes off. At the end of 2005, the MLSs with smiles on their faces will be the ones who figured this out.

It's not complicated. You select a terminal that's certified with your ISO/MSP partner and you partner with a local broadband company that will take care of the installation issues (routers, WiFi, etc.).

You'll be there to consult on how many terminals your merchants need, how to effectively use the terminals and whether merchants want to lease or purchase.

With IP, the large processing accounts are suddenly up for grabs. With much faster transaction speeds, the benefits of getting rid of expensive local telephone lines and the freedom of merchants placing terminals anywhere in the store and moving them around as they need to represent some of the most compelling issues of 2005. These accounts will quickly fatten up your residual income.

Leasing as the Comeback Kid

Another compelling area is leasing. Leasing started to make a comeback in 2004, and I see it as the comeback kid in 2005. Why? Because you use leasing properly. You set up the right types of merchants (credit worthy merchants) who want to lease new technology as noted above.

There's a real business case for this. If the merchants are credit worthy and the salesperson sells terminals with valuable services, then these leases perform. What happens when lease portfolios perform? The leasing companies come out with better factor rates, making it even more compelling to offer great lease deals to your merchants.

Partners, Leads and Education

As I've mentioned in previous columns, one of the most compelling aspects of business is selecting the right strategic partners. In view of the many mergers and acquisitions in 2004, you need to know with whom you're actually working. Due diligence will play big in 2005.

Along those lines, compliance will be big in 2005 as well. You need to be more knowledgeable about liability when it comes to your business contracts. Read over every detail of every contract you sign in the coming year. Another area of increased financial opportunity in 2005 will be lead generation. Referrals are always important and will continue to affect your bottom line.

What will also support lead generation is your participation in industry associations such as the regional acquirers' associations and the Electronic Transactions Association. This is critical if you hope to reach new levels in 2005.

Education goes hand in hand with participation. I strongly urge you to take advantage of training programs to prepare for opportunities coming in 2005. There's a clear shift in the industry toward you, MLSs, and your role in the bankcard business.

How well your voice is heard in the next year is critical in terms of changes in policies and procedures, as well as increased support for the feet on the street.

Bottom Line: Take Action

The bottom line for 2005: Staying alive and prospering will prove easy if you are smart and see what's happening in the industry and actually do something about it.

It's time to make some changes to your offerings, marketing approach and the merchants you talk to.

The good news is that these changes will result in higher profits. What's more exciting? Nothing. There's still no better business to be in ... and there's never been a more lucrative time to be an MLS.

I wish everyone a very happy, healthy and prosperous New Year!

"Yesterday is not ours to recover, but tomorrow is ours to win or to lose."
- Lyndon B. Johnson

See you where the rubber meets the road.

Ed Freedman is founder, President and Chief Executive Officer of Total Merchant Services, one of the fastest-growing credit card merchant account acquirers in the nation. Freedman is the driving force behind all business development activity as well as the execution of Total Merchant Services' marketing plan, including recruiting and training independent sales offices and establishing strategic alliance partnerships with leading vendors, so that Total Merchant Services can provide its customers with the highest quality and most reliable services available.

To learn more about Total Merchant Services, visit the Web site at www.totalmerchantservices.com. To learn more about partnering with Total Merchant Services, visit www.upfrontandresiduals.com or contact Freedman directly at ed@totalmerchantservices.com .