In The Trenches

by Steven Pavent


   Wanted: A processor that can give me a buy rate of 1.25%, .02 cents a transaction, no minimum and $1.00 statement fee with 100% above. Processor must accept applications by internet, fax, email and smoke signals and, by the way, we do not want to have to do any site surveys or get any supporting documentation. We also do not want any risk and require our MID and TID in 30 seconds. We want to be able to call you anytime, day or night and NEVER get voice mail. Processor must provide gift & loyalty, check services and in house leasing that funds yesterday without originals or a verbal. It doesn't matter if you make a profit, but you had better send me my residuals by the 1st day of the next month. Lastly, you must provide excellent customer service, technical support and chargeback management. For this we will write 50 clean deals each month. We will provide front line customer support and excellent follow up. We will learn the business and send in clean and complete paperwork. Any additional paper work required will be provided promptly if the application gets pended. Our company is built on integrity and will give FULL DISCLOSURE, follow up phone calls and birthday and holiday cards to our merchants. This keeps our attrition rate at 0%.


   I will write every account at the buy rate so I can earn $1000.00 leasing a terminal. The customer will think he can cancel the lease or merchant contract any time he wants with no consequences. Cut the 50 deals a month down to 10, and that's counting the bankrupt psychic selling diet pills over the internet! I will send incomplete applications, ignore your requests for additional info and then be angry when my deals are not approved. I will call you at all times of the day and night and ask you questions that are clearly answered in the training material that you sent me. Who's got time to read that? Oh, and answering a question once won't do, so I will call you several months in a row asking the same question. I really would return my customers' phone calls, but I can't show my face in any of their stores again after the bogus bill of goods I sold them!


   Wanted: Quality agents only! We pay 99% of the residual income plus a huge up-front bonus! We have buy rates of 1% and no transaction fee with no minimum and a .50 cent statement fee. Did we mention that you get 99% above? With our 1% we'll provide quality service to your customers and your office. We will pay your residuals to the next 3 generations of your offspring. Oh, did we mention we'll never sell our business! Finally, you'll get applications approved before you even write the deals.


   We'll take any agent that will fog a mirror. Your 99% is only on the residuals earned on every other Tuesday. Didn't you read the fine print? Also we are only paying you on 99% after we've figured in some mid-qualified, non-qualified, annual fee income we didn't tell you about. We figured if you don't read the training manual you won't read or understand the agreement. Anyone that can wait through the one hour hold times will receive quality service and don't bother leaving a message or sending an email because we don't check or respond to them. You and your children must continue to send us 30 deals a month to receive your residuals. But, I wouldn't worry about that because we'll be selling the company. All of those instant MID's were approved with a 100% reserve until we could properly underwrite them. Don't worry about what happens to the merchant if they're not approved or approved with a rolling reserve! Last, could you please resend that paperwork that you've already mailed, emailed, faxed and sent pony express 18 times, we just can't find it.

   I know all of these are extreme examples but believe it or not most of the points I've made are based on my first hand experience. I spoke to an agent in Texas the other day who has been in the business for 1 and 1/2 years and he said "as far as I can see, this processing is just a way to sell equipment." Another agent I recently interviewed was appalled when I told him our costs are 1.47% & .15 cents. He told me he could never sell that high as his processor let him sell at 1.25%. I showed him interchange charts and I'm sure he left thinking I was a crook! The most shocking thing about this is that he is a three year veteran of the business. A very intelligent woman with a small gift card company professed to me the other day that her processor gives her a .10 transaction fee and she couldn't possibly use us because our .15 cents was just to high for the smaller ticket coffee shops she specializes in! She was initially convinced that if she wrote a coffee shop with an average ticket of $2.00, that 1.59% and .10 is what the customer would end up paying. Another two year industry veteran told her customers, and believed herself, that the $25 monthly minimum meant that the merchant had to swipe at least $25 in sales through the terminal every month.
   On the other side I've had processors just stop paying me residuals and treat my customers horribly. People that you thought were your friends disappear now that you're no longer sending in business. The customer service and agent support that they provided was non-existent and sending paperwork to them was like shooting it out into space. I often laugh when I read the recruiting material of some of the companies I've worked with in the past. The offers sound so good they almost make me want to call and sign up again.
   This leads me to the point that we work in one of the most amazing businesses. Someone can get started with little to no money or training. They have no risk or liability and can make some decent money. They can bounce from processor to processor, lease company to lease company or stay with one, making sales while giving the processing away.
   On the other side, the expense of starting "Processing Services of my Basement" is very low compared to other businesses. You can get your own application, get a bunch of honest independent contractors, promise them the world and just cut them off at the knees. Don't think it's only the small guys? Some of the larger more established companies know that most people don't have the resources or resolve to fight them.
   I don't want you to think I have a pessimistic view of the business because I don't. I've met and worked with many honorable people and companies through the years. This brings me to a question that I'd like to pose: Could the electronic transaction industry use an association to test and certify sales agents? Would it help our industry to have a website that we could go to, rate our processors and have others see the scores? A license is required to sell real estate, insurance, cut hair even auto mechanics can get certified. You currently can go on the internet and see what other owners of the car, bike or whatever you want to buy, think of it. You'll also find independent evaluations by magazines and insurers. Why not processors rated on hold time, turn around time, on time residuals, financial stability? Would it be such a bad thing if people had to fork over a few hundred dollars and take a test to enter our profession? Would it be such a bad thing if processors knew that if they continually burnt their agents that their rating would sink so low that others would not want to sell for them?
   I'm an entrepreneur and I'm not in favor of any regulation. However I do feel that people selling something should have basic knowledge of what they're selling. Also, if you're considering a processor it would be nice to have an apples to apples comparison with others. One fact we can't ignore is that if we don't clean up our own house, the government will do it for us and I don't think anyone wants that. Please call, email or fax me with your thoughts or suggestions.