Acquiring Minds

by Ed Freedman

   Welcome to the newest member of the Transaction World family! "Acquiring Minds" is a new monthly feature dedicated to issues that registered ISO/MSPs deal with every day.
   I volunteered to host this column because I believe that we can help each other build better businesses and secure our place as the most valuable, innovative, influential, and profitable group in the acquiring business. I'm a big believer in "co-opetition" � in cooperating and collaborating with people that we compete with every day. One of the funny things that people find out about me is that some of my best friends in the world are also some of my most fierce competitors.
   Every day, I have conversations with people that run businesses just like my company, Total Merchant Services. What's so interesting to me is that we quickly realize we're all living the same lives and face the same day-to-day issues. There's a lot of common ground. Whether it's conversations with leasing providers, equipment providers or credit card processing partners, the discussions always focus on similar areas of challenge and opportunity.
   Responding to those discussions, "Acquiring Minds" will talk about those areas of common ground. In this introductory article, I've set forth some of the issues that are in the forefront of our industry. Subsequent monthly articles will look at them in depth. However, in order to effectively achieve the goal of delivering timely and relevant information to everyone, I ask for your feedback on each issue as well as topic suggestions. Let's share opinions.

   One area that immediately comes to mind is merchant losses. We all can easily agree there's nothing more important in the acquiring business than controlling merchant credit losses and combating fraud. The criminals do not think we're smart enough to get together and share information to stop them...and that will be their undoing. They do not realize that risk management groups are communicating with each other every day via telephone and email, that they formed the MAC Users Group as a central exchange of information and that one of the initiatives adopted is credit inquiries that identify the inquiry as a bankcard acquirer with "ACQ" at the end of the name.
   Hand in hand with merchant losses is the common ground of bad sales reps. Although we all realize that it's not a great idea to share information on good sales reps, we do know how much damage one bad sales rep can do to one company � let alone to our entire industry. In the same way that risk management groups have gotten together, the people responsible for recruiting and training new sales reps for ISO/MSPs need to get together as well to create their own "negative" list. I suggest that a group similar to the MAC Users Group be created to prevent bad sales reps from jumping from acquirer to acquirer. To do so, we'll need a good group of ISO/MSPs as well as a good group of point- of-sale leasing company providers.
   Another area that we all are involved with is vendors. We all need to establish the same set of vendor partner relationships. This includes agreements with credit card processing companies, sponsor banks, point of sale equipment providers, software providers, Internet Gateway providers, wireless service providers, check conversion and guarantee providers, gift card and loyalty providers, leasing companies, employee placement companies, business financing pro-viders and such. Effective vendor selection involves everyone engaging in due diligence, an issue that will be discussed in depth in a future column.
   Perhaps the most common ground is staffing and hiring. We're all looking for a few good men and women. Potential employees are more specific on what they are looking for as well. Some people are looking to live in certain areas of the country while others are looking for certain areas of administration. Staffing and hiring is a common ground area where sharing of information could help us all fill positions. We've referred people to our competitors who didn't perfectly meet our needs and we've received many referrals in return that have worked out for our staffing requirements. Making it a point of letting colleagues know what positions are available is good business practice and one I strongly recommend.
   But, by far, one of the most compelling common ground issues is compliance with Visa, MasterCard and the Federal Trade Commission. We all have the same concerns with regard to making sure we stay in compliance with Visa and MasterCard's rules. What are Visa and MasterCard concerned about right now? What are the areas they are trying to fix? Is it sales reps using d/b/a names that are not registered or using wrong SIC codes to avoid paying the correct interchange for hotels, motels and other lodging establishments. What's happening with the Federal Trade Commission? What do we need to do to make sure we avoid any problems with the FTC as well as Visa and MasterCard? Perhaps some of the answers can be found with our premier association, ETA. They have recently published a "best of practices" guide. It's something everyone should review. However, let's dive a little deeper into this issue. Let's get some feedback from you on problems you've experienced so we can all get a heads up on what's happening right now.

   In summary, the bottom line common ground is maximizing the value of the businesses we're building. "Acquiring Minds'" purpose is to help us get together on these issues and build more profitable, better managed businesses in an industry that can only benefit from cooperation, support and solid business practices. I am very proud to be part of this industry. I am proud to be part of an extraordinary world of entrepreneurs. I look forward to hearing from you as to what you'd like to receive. Share your thoughts with us for what you would like to read in our future columns by e-mailing the Transaction World editor,

   "It is a fact that in the right formation, the lifting power of many wings can achieve twice the distance of any bird flying alone." - Anonymous.