ETA Expert Insights: Successfully Starting as a Salesperson in Merchant Services

By Patrick Gallagher, ETA CPP and CEO, Reliable Payments • Greg Renfroe, Payments Executive, PayiQ • Chris Williams, ETA CPP and Business Development Director II, North American Bancard

Challenges, Obstacles, and How to Achieve Success

Digital payments are a staple of modern businesses. Not only does every customer-facing company need a payments solution, but many are looking to replace their current legacy payments services with a modern system. That means there’s a lot of opportunity in the payments space.

Some of the many benefits of selling in the payments industry include: a flexible schedule, being your own boss, unlimited income potential, and selling a service that isn’t going to become obsolete any time soon. Then there’s the bonus of job security – no matter what the greater economy is doing, every business needs the ability to take debit and credit cards.

Despite these advantages, merchant service sales are far from a cakewalk—being more akin to a marathon than a sprint. For those looking for a quick buck, this is not the right industry. For sales professionals who have a desire to build long-term wealth over time, however, the merchant services industry is hard to beat.

Challenges to Getting Started

Economists like to use the phrase, barriers to entry, which can be defined as “anything that prevents an entrepreneur from instantaneously creating a new firm in a market.” The process of starting in the payments space is relatively simple but there are common barriers to entry that may prevent individuals and sales organizations alike from getting started selling payment processing solutions. The following sections cover three of the most common barriers to entry and suggestions for overcoming them.

#1 The Income Barrier

Individuals in the payments industry can earn six-figure incomes within only a year or two of getting started. As they continue building their portfolios, individuals may see monthly residual income approaching several tens of thousands of dollars per month. However, starting in merchant services sales often means starting from zero. Building a portfolio takes time but finding a way to make it through is worth it. Unfortunately, with no guarantee of income, some people may never take their first step and start. So how do people get started selling merchant services in spite of the income barrier?

EARNING IMMEDIATE INCOME
While residuals are a critical component of earning income in the payments industry, starting with no immediate paycheck can often be too big of a challenge. Thankfully, there are processing partners (commonly called independent sales offices or “ISO’s” for short) that pay upfront bonuses. In some cases, the upfront bonuses can be substantial, ranging from the low hundreds up to the thousands of dollars per account. Depending on income needs, upfront payments could mean that selling just a few accounts per month will keep the bills paid until their residual income has grown to a large enough amount. One word of caution: Some ISO’s pay bonuses at the sacrifice of residuals. Since residuals are critical to long-term growth and stability, finding an ISO that pays a combination of residuals and bonuses is key.

SAVINGS, GOALS, HIGHEST INCOME POTENTIAL
While not always easy in practice, in theory, utilizing savings to get by for a few months is possibly the simplest option. To make this work, salespeople need a plan. Understanding how income is earned, what goals need to be met to achieve a minimum acceptable income, and what opportunities bring the highest income potential, are critical. For example: As of the writing of this article, a widely discussed solution in payments is a cash discount. Cash discount programs are earning salespeople considerably more in residual income than merchants who are on more traditional models. In fact, some ISO’s advertise residuals that are over twice as much as traditional merchant accounts when merchants utilize cash discounting. Learning how to sell this type of program, finding an ISO partner who supports it, and understanding the income potential are key components for creating a plan to survive on savings until residual income is built up to an acceptable level.

SIDE HUSTLE
The payments industry is one where individuals can create significant income, but it’s not a get-rich-quick business. It takes time to build a strong, stable monthly residual payment. For people who cannot utilize either of the previous suggestions, a third option for overcoming the income barrier is to start selling merchant services as a part-time effort. There are challenges to this, such as being available when business owners are available to meet. Another challenge may be that certain ISO partners could require a minimum amount of sales each month. Finding an ISO that isn’t too restrictive about sales agent activity is critically important for those wishing to engage in part-time selling. Since most salespeople are independent, what hours they work are up to them. Selling part time will obviously mean that the portfolio growth is slower than selling full time, but with consistent effort, it will grow. Once the residual payment is enough to cover monthly needs, sales agents can transition into full-time selling.

#2 The Barrier of Choice

“When asked about what they regret most in the last six months, people tend to identify actions that didn’t meet expectations. But when asked about what they regret most when they look back on their lives as a whole, people tend to identify failures to act.”
― Barry Schwartz, The Paradox of Choice: Why More Is Less

What a challenging problem to overcome. Is it harder to regret making the wrong choice or harder to regret making no choice? It’s no secret that too many choices can freeze a person with indecision. Unfortunately, in the payments industry, having a choice can be an overwhelmingly large barrier to getting started. A basic search on the web for “merchant services” or “payment processor” will quickly show just how many choices there are for both merchants and potential sales professionals. It’s nearly impossible to figure out which option is best. Later in this article, choosing the right processing partner will be discussed. For this topic, here are a few simple methods for overcoming the barrier of choice.

SET A DEADLINE
It’s important to take the time to make a good decision but it’s also important not to take too much time. One simple tactic for overcoming the barrier of choice is to simply set a deadline. By setting a deadline, sales professionals ensure a way to move forward, even if the choice is difficult or imperfect. Keeping things moving forward is critical.

MINIMIZE CHOICES
It’s unlikely that an ISO partner will check every box. Making a choice becomes much easier when there are fewer choices. That could mean eliminating a choice that is positive but not complete enough to accommodate a sales agent’s overall plan. It may also mean keeping an option open that has a potential drawback but meets many needs. At the end of the day, coupled with a deadline, narrowing down the list of potential ISO partners will enable sales agents to make a choice and get started selling.

GET SOCIAL
It’s easy for folks to feel as though they are figuring this out on their own. The great news is that in today’s internet culture there are so many ways to connect! Within the payments industry, there are multiple groups that can be found on social media sites such as LinkedIn and Facebook. Getting active in these forums is a fantastic way to connect with others that are in the industry, ask questions, and get recommendations. Making decisions is hard enough, enlisting the help of experienced people within the industry will simplify the process.

#3 The Training Barrier

It doesn’t take long to discover that there’s not a significant source for learning the payments industry, at least not for free, and not outside of a processing partner. Trying to learn the merchant services industry ahead of signing up with a processing partner is difficult. On top of that, the quality and availability of training varies greatly from ISO to ISO. Related to training, the best advice a salesperson can follow is to take matters into their own hands. Here are a few ways to overcome the (lack of) training barrier.

SALES BASICS
It’s important to bring a basic understanding of sales into the equation. Salespeople should never lean on their ISO partner to teach them “how to sell.” Instead, sales agents will find it easier to start selling if they can bring the basics themselves. Understanding how to prospect, how to ask questions to potential clients, how to overcome basic objections, and how to close sales, are basic sales skills that every sales professional needs. When partnering with an ISO to sell merchant services, having the basics locked in means that salespeople can focus more on learning about the ISO’s products, services, and solutions. Being able to learn the ISO’s specifics often means getting into the field faster and making those first critical sales sooner, rather than later. Given the sheer number of resources for learning and improving sales skills (books, videos, etc.), there’s no excuse for not bringing a basic understanding of selling to the table.

PERFECT ATTENDANCE
While there’s no prize for perfect attendance, attending as many training sessions/events as possible is a great way to take control of the learning process. Processing partners often provide training sessions and videos to their sales agents. As salespeople begin their journey in the industry, attending every possible training session (yes, even the boring ones), makes a big impact. When sales professionals can competently discuss a merchant’s needs, they build credibility, trust, and confidence in their clients. Building those three things is key to making sales and keeping merchants in the portfolio long term.

DON’T STOP
One final thought in regard to the training barrier: The payments industry is ever-evolving and so, sales professionals should never stop learning. To spell it out differently, salespeople should not be their own barrier to learning. There are many opportunities to learn once a person is inside the industry. Beyond what a processor may offer, industry trade shows are an incredible way to keep the knowledge flowing and have the added benefit of networking with other payments professionals. No salesperson is limited to what their processing partner offers and should find ways to keep learning, stay on top of what’s new, and put their best foot forward for all of their merchant clients. For those interested in attending industry trade shows, here are links to a few of the most attended events:

ETA TRANSACT
Northeast Acquirers Association (NEAA)
Southeast Acquirers Association (SEAA)
Midwest Acquirers Association (MWAA)
Western States Acquirers Association (WSAA)

STARTING SUCCESSFULLY IN MERCHANT SERVICES SALES

A sales representative should be very excited to take a chance on a future in the payments industry! This is one of the fastest-growing industries, and can absolutely provide financial success beyond imagination. However, success in this industry is directly correlated to activity. Success only follows effort; unlike OfficeMax, there is no “Easy Button”. Before an agent gets there, even, there are a few mistakes some new to the industry make, that will stop the journey before there is a chance to even taste the fruits of their labor.

COMMON MISTAKES NEW SALES PEOPLE MAKE
Choosing the Wrong Partner
If a person is new to the payments industry, all they have to do is ask on any payments-related social media page that they are looking for a processor to sign up with, and they will be inundated with “we are the best”, “we pay the best splits”, etc. They will have dozens of folks reaching out to let them know why one should sign up with them. While having plenty of options is great, it is very easy to be blinded by the most shiny offer, and completely neglect what it is they specifically need. There are multiple fits for each different type of sales professional. It’s imperative that they vet each option fully to pick the partner that fits them best and allows room for the growth that they envision.

All too often stories are recounted of folks who entered this industry who were told about how much money they could make, only to sign with a partner that did not offer the level of support they needed, and ultimately burned out of the industry quickly. As well, there are stories of folks who sign with a partner that is geared towards new agents, but as they grow, there isn’t the allotted freedom to grow an office into an ISO office, should an agent want to do so.

Another very common mistake must be discussed that frequently is made in this industry. Agents will sign with a partner because they offer the “best split”, but they do not know how that relates to what is on Schedule A, what they get for that split, what support is offered, what products they have access to, as well as the client experience on the merchant side of things. There are plenty of processors/ISOs that offer very aggressive splits, but offer little-to-no training or support and have subpar technology and/or a terrible customer service rating. There are also plenty of shops that offer lower splits, but provide wonderful support, industry-leading technology, etc. The best ones have a perfect blend of the above traits, but most importantly, the characteristics that perfectly fit what the agent is looking for.

If somebody has an affinity or relationship in a specific vertical, signing with a partner strictly due to the “best split” can be a recipe for disaster. What good is a great split if a processor/ISO does not offer technology options to a market in which one is familiar? If an agent has experience/relationships in hospitality/food & beverage, and they partner with an ISO who is not entrenched in that vertical, trying to compete against others who are experts in this area will be an uphill struggle.

Thinking It Will Be Easy and Fast
When looking for a new career opportunity, especially one that can provide the long-term financial security and freedom that payments can, it is easy to overlook the work and patience it takes to get there. In today’s world, people are looking for the “get rich quick” option. It is easy to speak to agents who have been doing this for years, who have large books of business, making six figures annually, and playing golf all day long.

However, new agents often drop out of the race long before getting close to any sustained success. Comparing an agent’s position to somebody who has been doing it for years is the wrong way to look at it. In doing so, they can get caught up in the countless no’s and failures everybody will encounter getting started. Let’s get this clear, agents will be told no more times than can ever be imagined, often in ways that they didn’t think possible! If they are only focused on being like that agent who recruited them with all that money and success, overcoming the slow months, the long grinding days, can seem insurmountable. Focusing on perfecting their craft, and knowing they are going to be in it for the long haul is the best path to success. One thing we can promise, if they put in the time and effort, and commit to continually improving their tactics, success will follow…just often not as fast as they would like.

Expecting One-Call Closes
Many come to this industry with a great personality, witty one-liners, and absolutely no fear to cold-call! Well, they are off to a great start, and while those traits will help them find success, as stated before, nothing replaces long-term, sustained effort. As folks who are new to this industry, as well as seasoned veterans, can attest to, everybody gets a lot of “no’s” in a day. But new reps often neglect to understand that it is often just “no for now”.

Is it any wonder that, on average, it takes about eight touches to get an initial meeting with a prospect? That means that while some may take one or two touches, others will take more than ten calls/emails/door pulls to get them to even sit down for a meeting. Reps who are out only hunting for the one-call-close will pass up so many opportunities that come on the second, or third, or seventh contact. Taking “no” for an answer leaves so much money on the table that other, more seasoned reps will gladly find when the time is right!

BEST PRACTICES EVERY NEW SALES PERSON SHOULD FOLLOW
Practicing Patience When Selecting a Partner
If an agent wants to build a portfolio of business in hopes of one day kicking back on the golf course or beach while they cash checks, the single biggest decision they can make is who they partner with. Every single rep in this industry can tell horror stories they, or somebody close to them, has experienced. Whether it is dealing with a processor/ISO that provides little to no support, is not transparent in their payouts, or is constantly changing the Schedule A and/or pricing for their merchants, there are many stumbling blocks that can be avoided by choosing the right partner.

The best way to do this is to evaluate multiple options and ask for references. As well, do the due diligence personally; Google can be a rep’s best friend. Social media also provides avenues for chatting with current agents of specific processors. Having offline conversations with them can help understand if they will be a great fit for what an agent is looking for. Lastly, they will want to have an attorney review any contracts they sign, so find a well-respected-industry-specific attorney. Oftentimes, these lawyers can give their thoughts on which processors are good, and which may cause headaches down the road. They are, daily, involved in reviewing, editing, and enforcing contracts on behalf of agents, so their insight can be invaluable.

Realize This is a Marathon, Not a Sprint
As mentioned above, this industry can be lucrative, but it takes time and energy. An agent needs to set their sights on realistic, attainable goals. They should tell themselves they are here for the long term. They must start by making as many introductions, door pulls, and phone calls as they can. They need to make detailed notes on conversations they have so that when they call back in three to six months, they can reference points from the previous conversations.

Candidly speaking, most people do not love cold calling. The goal is to get to a point where a rep can reduce the need to cold call as soon as possible. However, they will never get there without doing more than they think they can do early on. When they are getting told “no” the first time, agents should thank the prospect and tell them they will check back in a couple of months to see if anything has changed. When they call back in four months, is that really a cold call? It is fair to say no. If an agent is able to ask them how their vacation was, or their daughter’s wedding went, etc, it becomes more of a conversation. Eventually, they will call them on the right day, and the merchant will say “come on in, let’s chat”. But that will not happen if the rep does not keep track of these conversations and when to follow up.

Realizing that the first contact is just that, and setting each prospect up for a campaign of touches will show sustainable returns. Think about it: fast-forward two years, a rep is cold calling, they have gotten a couple of referrals, and they are following up with prospects they spoke with six, 12, 18, and 24 months ago. Imagine how many deals are going to be closing for them with this formula! One-call closes are great, but playing the long game will provide long-term success.

Another metric that can be easily followed is something along the lines of 50-5-1. This is 50 calls a day (can be calls, emails, door pulls, 50 contacts of any kind), to get 5 appointments and 1 sale. Generally speaking, these metrics are a pretty accurate portrayal of the high-volume activity needed to be successful, but if an agent follows these guidelines, there is a high likelihood they will be successful.

NETWORK, NETWORK, AND THEN NETWORK AGAIN
Generally, most sales professionals desire to enjoy the rewards of all their hard work, inching towards not having to cold call as much, and building a long-term business. The most successful way to accomplish all of these goals is to be the person local businesses know to be the expert and reputable representative for the industry. Reps should look to get involved in local networking groups. There are groups one can pay small memberships to join like BNI and 212, or start their own! Get involved in local chambers, non-profits, etc. A rep can make a game out of how many business cards they can give out in a day or at a networking event. Reach out to membership organizations, banks, and CPA firms. Any organization that has influence over businesses is great. Offer affinity programs, these oftentimes allow for the 1+1=10 idea, where a rep gets one relationship that can refer them to multiple businesses.

Lastly, if an agent takes their responsibilities to their merchants seriously, then they can ask their clients for referrals. Check in with them constantly, and if they pay compliments, a rep can ask them if they know any other business that would appreciate the level of support they are receiving. The worst they can say is “no”! A rep will find that their client base can be their greatest sales tool. One great method for deepening the relationship with new merchants is to review the first monthly statement with each new merchant. This enables an agent to show them they are being priced correctly, to highlight any savings offered, to educate the merchant on interchange, and to strengthen the trust between the agent and merchant—making it very easy for an agent to ask for referrals at the end of this meeting!

Spending time building these channels of referral relationships will not return immediate results, but will absolutely replace the need to constantly cold call after cultivating them for a couple of years. After some time, an agent can transition from the “feet on the street” to going out and visiting with their best referral relationships, whether that is for lunch, out on the golf course, or just stopping by their office to drop off treats. These types of relationships will afford the sustainable lead source all reps work towards!

Now that the challenges, mistakes, and best practices involved in selling merchant services have been discussed, it’s time to take action. If a rep is ready to build wealth over time, is relationship oriented and doesn’t mind a long sales process, there’s no better time to get started than today.

Getting immersed in the merchant services space and not worrying about having to start at the bottom are foundational. With time, a strong merchant services portfolio can be a source of significant residual income that just keeps growing and growing.

It’s a kind of opportunity that’s difficult to find anywhere else. So the only thing left to do is take the plunge and start building a future in merchant services sales.

Gallagher, Renfroe, and Williams are members of the ETA Industry Affair’s Payment Sales & Strategy Committee. This committee brings together payments & fintech industry salespeople to discuss effective business practices, identify challenges, and exchange ideas on recent developments and innovations that affect the payment sales channel.