Most salespeople and executives in the credit card acquiring business have discovered that
credit card clearing services have gradually been reduced to commodity status over the last
20 years. Even as late as 1985, small retailers viewed credit card processing, especially
through a VeriFone terminal, as a new and compelling necessity. Since then however, point-of-sale
(POS) terminals have become commonplace and much less expensive. In an attempt to create significant
product advantages, VeriFone, Hypercom and other manufacturers have introduced various upgrades
and new features over time, but essentially, the function, form and capabilities of the POS terminal
have not changed dramatically.
Bankcard ó itís a commodity, get over it
A commodity is any product or service which appears to be the same to the customer, regardless of
provider. Electricity, sugar, gasoline, heating oil, corn, wheat and hamburger meat are all familiar
examples of commodities. Any individual manufacturer of these products has not been able to
differentiate their product from that of another manufacturer. The only way to create a compelling
difference to the buyer is to cut price.
vulnerable to later switching based on the customer finding a better deal elsewhere. And why shouldnít the
customer switch? If the original premise of the sale was based on price, then the customer has a license to
shop for a better deal.
Add value ó what have you got to lose?
The only remedy for this trap is to add value to the sale. The customerís perception of value is the key
driver in your profitability. A substantial value proposition gives your client more reasons to buy from
you and puts the price of your product in a context that favors you from the outset.
Harold Montgomery is the CEO of Checktronic, Inc. Located in Dallas, TX, Checktronic provides payment processing, check verification/guarantee and equipment warranty and leasing services. To contact Checktronic, call 800.642-4325.
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