How to Turn Three Big Merchant Services Industry Challenges into Big Opportunities in 2020.

I started selling merchant services in 2005 - well before the widespread use of internet technology and digital communications as we know it today. When I began building my business, the process was tedious but simple: offer a small credit card terminal to a merchant, complete the agreement and paperwork by hand, snail mail it to a process agent, and wait at least 5-7 days for the green-light. Any error in data entry could result in weeks of delay. The pace of closing accounts could be defined as a “slow plod” at best; but, just like the infamous story of the tortoise and the hare, slow and steady frequently won the race.

Today, these processes have changed radically and flipped 180 degrees. The slow and steady strategy has been replaced by a fast and furious one. Landing clients and providing merchant services is changing as quickly as technology is changing - moment by moment. Processes that used to take weeks now take seconds, which has led to a widening chasm between the “good old days” and the industry as we now know it - and no one wants to be left behind.

If you’re looking to stay on top of your game in the merchant services industry, one of the best things you can do is stay up to date on the biggest challenges we face - because challenges can be the seeds of the best opportunities you’ll ever have. When new technologies emerge, early adopters (if they learn quickly) can stand out from the crowd and lead the pack. Here are my three biggest challenges for 2020, and how you can turn them into opportunities.

Challenge #1: Maximizing on the Trend of Integrated Payment Solutions

Merchants are beginning to trend towards integrated payment solutions in respect to payment process and POS systems. Charge terminals are being eliminated and these types of technologies are being consolidated into ERP type solutions as much as possible (NetSuite, Oracle, etc.). In reality, who can blame these businesses? These solutions reduce labor and provide an all-in-one experience for the business owner and the employee, allowing them to save time and be more efficient. Simply selling charge terminals today is tricky business. Businesses need to keep up with each other, and if you’re not giving your client the best options to do so, your client may be going elsewhere. 

Opportunity: Software companies are looking for quick and easy payment integration that ultimately makes the payment process as seamless as possible. Ultimately, this will result in increased productivity for the agents who are developing partnerships with software companies; long-term retention of these clients will increase as well.

Challenge #2: Dealing with Industry Uncertainty

Another challenge facing merchant services is the uncertainty of the structure of the largest companies, who often serve as guideposts and decision-makers for the industry at large. Last year First Data was acquired by Fiserv for $22bn dollars, and FIS acquired WorldPay for $35bn dollars. These large acquisitions in a small time period create uncertainty for agents in an already difficult industry.

Opportunity: Continue to provide exceptional customer service and remember that no one does “you” better than yourself! Leverage available tools and technology to create the best user experience possible for your merchants and be as accessible as you can within reason. If you aren’t a Fee Navigator user already, check out our platform. We offer a variety of tools to help you build and maintain relationships with your leads and customers that can give you an edge during these uncertain times.

Challenge #3: Increased Number of Players on the Field

Newcomers have realized that merchant services can be lucrative and scalable, and they are here to play - e.g. software companies (ISVs), blockchain business, real time payment etc. Business is exploding in 2020; you no longer need millions of dollars in funding, complex hierarchies of employees, and 40 years of experience to take an industry by storm; you can have a small cable of brilliant, tech-savvy entrepreneurs working out of basements and coffee shops who can disrupt industries overnight.

Opportunity: Stay alert! Follow hashtags and companies on social media who are covering these topics and news stories. Make it a point to spend 20-30 minutes a day staying up to date with what’s going on in the merchant services space so that you can make an offensive or defensive move to protect your business and your accounts.

The merchant services and payments industries are transforming and will continue to do so as the spotlight becomes broader and the competition becomes hotter. The only question is, are you willing to put in the time, the effort, and the research to stay on top? If you are, merchant services’ star is brighter than ever, and getting to the top of the mountain of our industry will be even sweeter.

Questions about the merchant services industry, or interested in learning more about Fee Navigator? Send me a message on LinkedIn, or email me at [email protected].