Measuring the ROI of Your Merchant Credit Card Processing Services

To provide the best credit card processing services, you have to identify and address your weaknesses.

Sounds simple, and many ISOs agree that this self-examination is a good idea. But when it comes time to evaluate their merchant credit card processing services, they settle for cursory reviews and come up with unhelpful findings. They don’t delve deep into the details of their business, and consequently, they gain little insight and might say something vague like, “Well, things are going alright, but I guess they could be better.”

Pinpointing areas for improvement takes a detailed examination of your business. Start by evaluating why your portfolio didn’t produce as much income as you thought. There are two primary reasons for lower returns: your practices and those of your credit card processor.

Your Practices
Identify the merchants who you priced below your minimum acceptable price. Then ask why they were priced so low. After all, there may be a good reason why they’re underpriced. For example, maybe you set their rate on a different average ticket than what is the norm for their business today. Or maybe you predicted higher volume. If the reason was a perceived promise of return, examine the merchant’s volume to determine if it panned out. If not, remember to reward merchants after you receive your desired return – not before.

Those of Your Credit Card Processor
Many ISOs don’t consider the practices of their credit card processor when evaluating their merchant credit card processing services. Credit card processors can impact your return more than you might think.

Consider these questions when evaluating your current partner:
1. Can I proof my residuals down to my costs?
If not, you may have a problem, but you’ll have no way of knowing it.

2. I thought my pricing was great when I first signed? But is it really that great?
One area may look great, but other areas like lower splits, high monthly costs and miscellaneous fees may offset it.  

3. Am I getting the support I need?
Your credit card processor should be a good partner, providing advice, supporting you when you need help, and being available to address questions or concerns.

Follow these tips when you evaluate your business and you’ll be on the way to finding your weaknesses and developing the best credit card processing service possible. Did you find these tips helpful? Do you have some of your own? Let us know below.

Jeff Fortney is Vice President of ISO Channel Management at Clearent™. His career includes over 35 years in financial services, with the last 17 focused on the debit and credit card processing industry. Clearent is a valuable partner to many ISOs and agents. If you’re looking to develop the best credit card processing services, Clearent will be sure to give you high quality merchants credit card processing services, competitive pricing and sought-after products and services. 

Become One of the Best Small Business Credit Card Process Services

You may have the latest technologies, hardworking employees and a savvy business model, but that’s not enough to succeed in the debit and credit card processing industry. Like any successful business, the best small business credit card process services not only display all the attributes above, but they also excel at cultivating relationships with current and potential clients.

So to help you grow your debit and credit card processing business, here are a few tips for forging profitable business partnerships.

Keep in touch

 Stay in constant contact with your merchants. It will keep your business at the top of their minds, and if you’re at the top of their minds, another debit and credit card processing service can’t be.

A great way to do this is sending an electronic newsletter. A variety of companies offer user-friendly templates that let you create custom, professional HTML newsletters at little or no cost. Mail Chimp has always worked well for us.
 
As far as content for your newsletter, remember to keep it short. All you need is a logo, a personal message, and some interesting information about debit and credit card processing services that can easily be found on the Internet. Also, keep your tone and design consistent, and try to send your newsletter every month---or at least every quarter.

Build Loyalty

 Don’t let your merchants think of you as a vendor or supplier. Make sure they see you as a partner.

How do you do this? Alert them to new forms of debit and credit processing, such as mobile payments, which will help them grow their business. Furthermore, when you’re near their business, call them and see if you can drop by to say hello. Lastly, build connections between your merchants, referring one to another if you think they’d make good business partners.

Once your merchants start to see you as a partner, keep cultivating those relationships and remember that the loyalty building process never stops. Ask your merchants for referrals, and keep sending business to them as well. This reciprocation will keep your partnerships strong.

These are just a few ways to cultivate successful and lasting relationships with your clients. What are some other great ways to build loyalty among your merchants? Share your ideas and leave us a comment below.

Jeff Fortney is Vice President of ISO Channel Management at Clearent™. His career includes over 35 years in financial services, with the last 17 focused on the debit and credit card processing industry. As one of the best small business credit card processing services, Clearent is a valuable partner to many ISOs and agents. If you’re looking for a new partner for debit and credit card processing services, Clearent will be sure to give you and your merchants high-quality service, competitive pricing and sought-after products and services. Contact us to learn more.

 

Normal Credit Card Processing vs. Next Day Funding Merchant Services

Many merchant services providers are adopting next day funding to grow their next day funding merchant services, and in a post last February, Carry Notheis explained many of the basics and benefits of this hot new service. However, despite the popularity of next day funding merchant services, many merchants don’t completely understand how it works. So to clarify this tricky topic, we thought it would help to compare next day funding to how credit card payments are typically processed by merchant services providers.

Normal credit card transaction processing
Typically, it takes two days from the time of sale for funds to appear in a merchant’s bank account. Say a boutique sells a blouse for $100 dollars on Tuesday afternoon, and after closing at 6:00 pm, the manager batches out and settles the terminal. That $100 (minus any fees) will be deposited in the boutique’s bank account on Thursday.

So what occurred between Tuesday and Thursday to make that deposit happen? Early Wednesday morning, the merchant service provider processed the debit and credit card transactions from Tuesday, submitted them to the card associations and initiated a transfer of funds to deposit the money into the boutique’s bank account. The money was then transferred via the ACH network. Because the ACH network transfers money between bank accounts overnight, the transfer occurred late Wednesday or early Thursday, and so the boutique received the funds sometime on Thursday during the day.

Next day funding
Now, using the same boutique example, let’s examine the next day funding cycle. If the boutique had next day funding, their merchant services provider would have processed the blouse transaction late Tuesday night and initiated the funds transfer to the ACH network Tuesday night before its last cut-off time. The ACH network would have transferred the funds overnight, and so the deposit would have appeared in the boutique’s bank account on the next day---Wednesday.

It sounds simple, but it can be tricky because each payment processor has its own processing and funding methods. Processors have to meet the cut-off time of the ACH network, and so they have to set a cut-off time for their merchants. This cut-off time varies from processor to processor because, depending on their systems and capabilities, some processors need more time to get everything in order to meet the ACH network cut-off time.

Furthermore, other processors may circumvent the ACH stipulations altogether. Collaborating with banks, they may “memo post” the transactions to the merchants’ accounts before the funds have really been transferred. This process relies on the policies of each bank and often requires funds to be held at a certain bank.

Jeff Zimmerman is Vice President of Product Management and Marketing at Clearent and has held management roles at Network Solutions and Intuit. Jeff brings 15 years of product management, finance and marketing experience to Clearent. Clearent is an experienced merchant services provider offering solutions such as mobile payment processing, wireless terminals, and next day funding merchant services. Learn more about how we can aid your credit card payments service and let us know any questions you might have.

 

4-Step Routine to Create the Best Merchant Services Program

We all have a daily routine, and whatever it may be, we consistently follow it. It helps us keep our lives in order. It makes us feel good. It just works.

And just as we should all follow our personal routines, Independent Sales Organizations (ISOs) and agents should follow routines of their own to get the most productivity out of their merchant service program. So to help you develop the best merchant services program possible, we’ve created this simple, 4-step routine.

1. Stay up-to-date

Like many other industries affected by the rise of the digital age, things constantly change in the world of merchant services. New technology is being produced, critical regulatory changes are taking place and your customers may be talking about you in a digital social sphere.

2. Make time to make sales calls

You know your portfolio isn’t going to just build itself. However, many ISOs fall into a trap of complacency when it comes to sales. They think that because their portfolio is adding to their bottom line, then there is no point changing anything. Building your portfolio with one or two successful merchants can do wonders for your profits. Yet to realize true organic growth, every day you should set aside a time to call prospective merchants and see if you can help them.

3. Follow-up with your customers

If your merchant has just been set up, call them to see how they’re doing and see if they need anything else. From a customer service perspective, staying in touch with your merchants is the best way to gain their trust and make them feel valuable. Managers of the best merchant services programs will consistently check on their customers.

4. Know where your merchants stand

It is important to know which of your merchants you’re at risk of losing. The best merchant services provider will be able to provide you with data that will help you figure out which merchants may be seeking a more profitable merchant services program. Additionally, checking on your merchants’ sales volume each day is a quick and painless process, and if you find a merchant that is dissatisfied, see if you can meet them halfway to salvage what profits you can.

Jeff Fortney is Vice President of ISO Channel Management at Clearent™. His career includes over 35 years in financial services, with the last 17 focused on the debit and credit card processing industry. As one of the best merchant services programs, Clearent is a valuable partner to many ISOs and agents. If you’re looking for a new partner for your merchant services program, Clearent will be sure to give you and your merchants high-quality service, competitive pricing and sought-after products and services.

How to Be Better Merchant Services Providers

No matter their size or industry, merchants should demand excellent customer service from merchant services providers. The best credit card processing companies know this, and do everything they can to ensure that their merchants are taken care of.

Although many companies do offer the kind of topnotch customer service that they claim, some fail at satisfying the consumer. They may think that their customer service is topnotch simply because there is no phone wait time and a building full of representatives in headsets answering calls immediately. Maybe they call their customer service “unmatched” because they have an “advanced troubleshooting program” and the representatives just have to read from a script.

Unfortunately, people don’t like feeling like they are being read to when they should be getting talked to, and people don’t really mind a short wait for a merchant service providers to answer the phone as long as the customer service experience is good. Not to mention that questions that aren’t contained in the computer script may arise during a call.

When something has gone wrong during a customer service call, customers don’t want to be formally addressed by their last name and profusely apologized to. They just want to know that the representative is doing everything he can to solve the problem. They want the customer service representative to show genuine concern for their problem.

The best credit card processing companies know that customer service representatives need to actually care about the problems of the customers. If a representative cares about the concerns of the customers, it will come through in his or her voice, and ultimately reassure the customer. Customer service representatives who care are also much more effective at solving problems because they want to see them resolved. It’s easy for customers to tell if a customer service representative is truly sympathetic to their situation or not.

They don’t want a customer service representative who speaks in a monotone voice or one that constantly uses industry jargon and big words to make them feel inferior. Customers want representatives to talk to them like normal people. Representatives of a merchant service provider can easily fall into industry-speak and forget that customers aren’t experts in their business.

The best credit card processing companies treat customers cordially, respectfully and honestly. Customers who have exceptional customer service experiences are likely to refer others to your credit card processing company just because of that one call.

All merchant service providers could benefit by reevaluating their customer service quality and revamp it where needed.

About the Author

Jeff Fortney is Vice President of ISO Channel Management at Clearent™. His financial services career includes over 35 years, with the last 17 focused on the debit and credit card processing industry. Clearent is one of the best credit card processing companies, providing passionate service that does not go unnoticed. Learn more about what merchant service providers can do for their clients.

5 Tips to Boost End-of-Year Profitability

Now that the year is half over, it is a good time to evaluate the goals you set for your merchant services program back in January. If you’re falling just a little short, here are some tips to get you back on track.

1. Cut Costs

The most basic way to increase profits is to reduce expenses. All you really have to do is assess where you are spending money and see if you are getting sufficient returns. Cutting costs is a surefire way to increase profits, especially when it comes to your credit card transaction processing service and how much money you make with your program.

Small business credit card processing offered by your bank should have competitive pricing. This will help you sign bigger merchants and help you make a greater impact on your overall profits.

2. Track the Money

Depending on the merchant services software provided to you by your credit card transaction processing service, it may be easier than you think to figure out how much your program generates. You might not need to spend hours with a calculator, adding up percentages to know how you are generating profits. Some merchant services software creates graphical reports so you can easily determine the value of your small business credit card processing services.

3. Promote Your Program

When you have a few large merchants and things are busy, it’s easy to forget how much more you could be benefitting by continuing to add merchants. There are a number of ways to increase merchant acquisition; you can create incentives for your personnel and implement in-branch advertising techniques targeting merchants. Create a presentation and set aside an hour to train your front-line employees on how to talk to merchants and give them bonuses for signing more. Small incentives can go a long way towards growing your portfolio.

4. Demand Quality Service

Never forget that excellent service is what keeps your customers happy. Not everyone who claims they provide good service actually does. Evaluate the promises your credit card transaction processing company made when you first started regarding the quality of service you and your merchants would receive, then talk to your merchants. What do they have to say? At the end of the day it is your responsibility to make sure your merchants are happy.

5. Don’t be Afraid to Switch

If you are unsatisfied with your credit card transaction processing company, you need not be afraid to switch to another provider. Many banks are hesitant to do this because they think the process will.

In reality, many providers have a solid plan and a skilled conversion team to get you switched and updated with better service in less than 30 days.

Converting to a new small business credit card processing company shouldn’t be viewed as a hassle, but instead a chance to clean up your portfolio and bring in more merchants to give them better service.

Kick-starting your merchant services program can boost your bottom number while requiring much less work than you ever thought.

 

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. As one of the best credit card transaction processing companies, Clearent provides the kind of passionate service that others can't. With an abundance of small business credit card processing solutions, Clearent can provide clients with the necessary tools to really make a difference.

Even The Best Credit Card Processing Companies Face Pricing Challenges

As a merchant services provider, you know that at times, it can be difficult to price new merchant accounts, especially with the addition of new association fees. After discussing referral programs with many bankers, a lack of flexibility seemed to be creating the majority of the frustration when it came to pricing these new accounts.

In such a competitive market, flexibility is key when it comes to pricing. It’s necessary to offer many different options. Some of the best credit card processing companies will work diligently toward being able to offer unique pricing based on each individual merchant and their needs. In doing so, they focus on certain characteristics, such as the average ticket size, the size of the merchant and their expected card mix (credit, debit, rewards cards, etc.).

Here are a few areas payment processing agents should be cautious of when pricing new accounts.

Small Ticket Size

Merchants with a ticket size less than $15 are hard to price due in part to the large impact of the transaction fee and the minimal impact of the discount rate – whereas normal ticket sizes have the opposite effect. Also, the range of ticket sizes can affect the percentage of transactions that actually qualify for small ticket interchange rates.

Because of this, it’s much harder to use discount pricing for merchants with small tickets, but unfortunately some providers don’t make pass through pricing an option for their banks. 

Pricing Methods

Due to limitations of some provider’s fee structures, some merchant services programs still only offer one of the two major pricing options. Typically, pricing methods in our industry include discount (tiered) pricing, and interchange plus (pass through) pricing. When deciding which pricing method to choose, many small business owners are looking for payment processing agents that will work with them as a partner and help them find or create the best pricing structure to enhance the success of their business.

The best credit card processing companies will work to find the best option possible for your program – which could include either the discount or interchange pricing method. When only offered one option that might not meet all of their needs, there’s a good chance banks have turn business away. Plus the profitability on certain accounts will take a serious hit.

Looking to the future, I bet we will see more hybrids of discount and interchange plus pricing, like a discount pricing with pass through fees.

Support

Because merchant statements can become confusing, it has become increasingly difficult to offer the right price to merchants. It’s best if a bank can be given the opportunity to call their processing company for advice, although some aren’t given such option. With a good support system, banks will be able to take advantage of more 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 one of the best credit card processing companies thanks to its dedicated staff and many services. Talk to one of Clearent’s payment processing agents about how you can improve your sales.