Make Your Merchant Services Program More Profitable

Across the country, bankers at both large and small financial institutions want to boost their non-interest income, and they’re asking third party service providers to help them do so.

One potential source of valuable revenue is a financial institution’s merchant services program. With a little time and a renewed focus, you can create a more profitable program. Here are a few pointers that can help boost your portfolio and revenue.

Train Your Employees

Make sure your employees know your merchant services program inside and out. Otherwise they won’t be able to effectively pitch it to potential clients. Also, make sure they’re up-to-date on the industry. Educate them on the latest trends, train them on the newest merchant services software, and basically do everything you can to ensure they’re cutting edge.

Help Your Employees Beat Sales Call Stress

A sales call can be frightening, and some of your employees are probably reluctant to truly engage with your customers. But once they see that they’re helping customers−not tricking them or forcing information on them− they’ll feel more comfortable talking about your merchant services program. So point out how your services help your merchants. Framing a sales pitch in this light can make it much less stressful.

Offer Your Employees Incentives

Think about the rewards that would best motivate your team. Then give them to employees when they reach milestones. Incentives can be based on individual performance or team success. A little friendly competition encourages teamwork.

Reach Customers in Multiple Ways

There are many ways to reach out to your customers, including direct mail campaigns, phone calls, online newsletters and in-person visits. The more methods you use, the better your response will be.

Keep Merchant Services Top of Mind

Make sure your merchant services program and merchant services software stay top of mind for your employees and customers.

It’s not easy, but having brochures, posters and table tents set up at all your branches can help accomplish this. Featuring a banner about your program on your website can also help boost awareness.

With these tips and some hard work, you can make your financial institution’s merchant services program more profitable. What else have you done to try to increase your profits? Leave us a comment below.

As a Relationship Manager, Nick Karcher supports both current bank partners as well as those institutions that want to know what makes Clearent a different kind of payment processor. Nick began his career in debit and credit card processing with Electronic Merchant Systems (EMS) as an Account Executive and later started his own Independent Sales Office. With an abundance of credit card processing solutions and excellent merchant services software, Clearent provides clients with the necessary tools to really improve their merchant services programs.

 

 

Four Problems Even the Best Merchant Service Providers Face

As a merchant services provider, do you offer merchant tools to help you cater to the many different types of businesses in your market? Upon talking to many bankers about referral programs, there seemed to be an overwhelming number of people with frustration over the lack of flexibility when pricing new accounts. 

When trying to succeed in a fairly competitive market, it’s necessary to be flexible when it comes to pricing and offer many different options. The best merchant service providers will work hard to offer pricing based on each merchant individually and take into consideration size of the merchant, average ticket size and the amount and mix of different reward cards, debit cards, credit cards, etc. 

Here are four problems to avoid if you want to offer the best merchant service possible. 

Flexibility 

Small business owners are looking for merchant service providers that will work with them to help find or create the best option for their success. However, some financial institutions’ merchant services programs still only offer one pricing option. The problem can be due to system limitations or the bank’s fee structure.

As a service provider, it’s your job to try to offer your merchants what they need – that could be either a discount (tiered) or interchange plus (pass through) pricing method. Unfortunately, when banks are only offered one option that doesn’t meet all of their needs, they are forced to turn business away. Providers should be able to offer more than one method, and as we move into the future we’ll probably see more hybrids of the two – discount pricing with pass through fees. 

Small Ticket Merchants 

It can be difficult to use discount pricing for merchants with small ticket sizes. For one, the discount rate for merchants with a ticket size less than $15 has minimal impact and the transaction fee has a significant impact. Normal ticket sizes have the opposite effect.

The smaller the ticket, the harder it is to use discount pricing – but some banks still are unable to use pass through pricing because it is not available from their provider.

Limited Rates

The discount rates offered by many financial institutions’ merchant service programs tend to be rounded to a specified amount, rather than delivered in smaller increments. However, real world situations often call for precise rates, otherwise banks will likely frustrate their customers or offer lower-than-necessary rates, thus lowering profitability. 

Nonexistant Support 

Both industry veterans and “newbies” occasionally come across merchant statements that are difficult to understand. Because of this, it makes it harder to price the merchant correctly. Some banks have the luxury of calling their credit card processing company for guidance; others do not and are left to fend for themselves. With more support, banks will be able to better evaluate sales opportunities. 

 

About The Author

As a Relationship Manager, Nick Karcher supports both current bank partners as well as those institutions that want to know what makes Clearent a different kind of payment processor. Nick began his career in debit and credit card processing with Electronic Merchant Systems (EMS) as an Account Executive and later started his own Independent Sales Office. Clearent is always working toward being the best merchant service provider possible through dedicated staff and many services. Learn more about Clearent’s financial institutions merchant services programs that include next day funding merchant accounts can help you improve your sales.