Many ISO’s have had a tough year in 2009. With shrinking margins and other challenges, many ISO’s are being forced to become creative on how to increase revenue for the new year. This is all based on a study that was released by Aite. They surveyed 28 companies and 17 banks that acquire merchants. This includes most of the top 100 largest acquirers. When they were asked about their 2010 challenges, many stated customer attrition will be one of them. Then margins and PCI compliance followed. As the economy tighten, many merchants will want to see what kind of savings they can find with all of their vendors and expenses. What are some of things merchants are asking for most? Pricing being the number one, then reputation and better service third. I was surprised by the reputation answer, I figured that wouldn’t be very important, but all the data breaches this year and years past, may play a big role in this. I also find it interesting that 69% of acquirers said they plan on increasing their sales force, which means more competition for companies like Gotmerchant.com. I personally welcome the challenge as most acquirers do not provide the level of personal service that we do and most of our merchants appreciate the personal touch.
Global Payments announced last week that it will be selling its money transfer business. They agreed to sell its DolEx & Europhil branded money transfer business to another entity called Palladium. Under the agreement, Global will receive around $85 million based on the performance of the business at the time of closing. The company said this will allow them to put more focus on the merchant acquiring business and reinvest in the sales process of acquiring more merchants. Global is one of the top largest platforms and processors in the US. Experts are saying the sell off makes sense as the business had been a drag to margins & growth in past years. Excluding the money portion of the company, Global expects to have revenue of 1.60 billion for 2010.
MasterCard recently announced a new authentication method for online transactions. Visa / MC have had online authentication programs out for several years now. Visa’s is called Verified by Visa, MasterCard is called MasterCard SecureCode. These two programs work great when the two pieces of the puzzle fit together. One, the cardholder must be using a bank that participates in the program and many do not. The second piece is the merchant must be using a platform and/or shopping cart that is compatible and capable of collecting this information. Many do not as well. The new authentication process is to use cell phones and text messages. When they try to make a purchase online, it will send them a text message to their phone to enter into the computer when prompted for it to verify the transaction. The service is first being offered in Brazil and maybe eventually make its way to the US. I however believe the use will be limited like the current verification programs the two brands already have in place now. I think everyone should use and support them that way cardholders do not have to deal with stolen credit cards as often. It doesn’t cost them anything, but having to deal with a stolen credit card can be a big pain.
Some merchants are in need of some quick cash but are unable to obtain traditional loans. That is where cash advances come into play. The company advances the merchant a set amount based on future credit card receivables. The part that is new about this is AdvanceMe, Inc. has introduced a new iPhone app that allows business owners to learn more about the service and apply for it with their phone. This new application allows the company to expand its customer base by reaching the merchants that are always on the go. Their CEO stated that they understand that small business owners are very busy and have less time than ever to spend on a PC as they are trying to run their business. This new service allows them to take advantage of their product offers while meeting their needs for convenience and speed. Most merchants can now also sign up for a cash advance service through their provider. Contact yours to find out if you qualify. AdvanceMe said the application is available for free from the Apple Store.
A Sydney company sees itself as winning a battle against Amex about the costs associated with accepting their card. This company has 9 of the city’s most popular restaurants & bars and were seeing their biggest spending customers pay with Amex to earn points and other types of rewards. Because of some rules imposed in Australia, V/MC are a fraction of what Amex are. And because Amex isn’t issued by a bank, they were not subject to the new rules. The company then became creative. They started surcharging Amex users a percentage to use their card, but V/MC users did not have one. I think this was a risky move, but only a few complained and most used a V/MC instead. Amex then started steering its cardholders to other establishments. Amex finally gave in and reduce their fees & the merchant removed the surcharge. Amex then started promoting the merchant’s restaurants to cardholders with triple bonuses to make up for all the damage that had been done.
Many business owners are successfully going online to increase their company. One may reach out a specific customer nice, another showcase her work. Almost all forms of business are taking advantage of the Internet and if not, they are really missing out. Giving your bottom line a boost requires a focused strategy. That’s exactly what Terra from The Ribbon Rack did exactly. She took an idea from a fellow Air Force supervisor, learned the technique and went out and created a web site to sell it. She did her research on ecommerce web design, including shopping cart integrations and service. She used FrontPage to create the site. She didn’t know SEO, so she used Google’s PPC service. She has several full and part-time employees. She didn’t make very much in the beginning, but the business seems to be taking off for her. She did note that the great thing about working from home, is she was able to move the business when her husband had to move to another base. She also stated that getting the web site designed from someone else can be expensive if you do not do enough research. She has known some people to spending $20K for a web site design.
I watched this movie over the weekend. It is about two guys that grew up in poverty. The older brother initiated the original startup of A&R Cellular. A company that sold wireless services. One thing I noticed, which I’m sure was accurate, is they were calling on businesses asking if they needed the service. The catch was I kept hearing them say no obligation. A few years later, they went into thebusiness. They changed the company to A&R Bankcard and starting calling on businesses about their credit card processing rates. I then hear the same line, no obligation. Everything was going great, they were growing the business. At one point, they sold a piece of their portfolio for one million dollars. Around 2002, they had a buyout offer from any unknown company to me, BGL for 30 million. They became greedy and asked for 50 million.
During the renegotiation of that deal, the FTC finally started investigating the company. The older brother did receive about two dozen notices or calls from the guy from the FTC, but simply ignored them. It finally came crashing down on them. The FTC took the company down. I’m not sure if this part is true, but the brother thought the FTC was hurting an innocent company. If their business practices was how the movie portrayed, then they deserved what they received. Lying and telling merchant’s false information to get merchants signed up is unethical and will eventually come back to bite you, as the A&R brothers soon learned.
Wal-Mart & Amazon seemed to be fighting it out recently when it comes to black Friday & having the best deals. Amazon has always been the leader when it comes to lowest prices on the Internet. But recently, Wal-Mart has kicked it up a notch and are heavily competing in this arena. They are slashing prices on certain products like the easy bake oven and movies. Wal-Mart may cut a price and then Amazon will following, as if they were in a ring fighting for their life. For most ecommerce merchants, this can be a costly and not so profitable tactic. Because of their size, they actually quality for different interchange levels when it comes to them using theirservice. Because they do so many millions per month, they quality for special interchange rates that are only available to large merchants. You can come out a head by simply avoiding the products that the two gorillas have decided to heavily discount. In the mean time, consumers will greatly benefit with never seen before low prices.
I was reading an article the other day about the owner of Smooth Fitness, a fitness equipment company and totally agreed with their CEO’s point of view. The article mentioned he is 51 yrs old, but his body would make a lot of 20 year olds envy of his physique. He mentioned that he believes fitness is important in creating a successful company. Being active as a human being has a lot of advantages. It keeps you focus, mentally alert, in great health and just overall a happier person. I couldn’t agree more. I have been running a successfulcompany for years and being physically active myself isn’t the main reason for my success, but I do believe it plays a part. I think the biggest impact it has is on your personal life, which will then branch off into your business and how your run your company. I have been a runner for years and I think it is hard to put in words the feelings and affect you receive from it. Other people that exercise will know exactly what I’m talking about, it can be addictive. Similar to how you run your company, you should also run your personal life and health the same way. Of course, if you have a fitness company, then should obviously be even more important! If you want your employees to do good, then you must set an example as the CEO or owner of your company. I can think of a lot of CEO’s of successful companies that actively ex cerise and that should tell you something.
Do you have a local retail store and need more business? With the Internet becoming so big and crowded, how do you generate more business for your retail store from the Internet? Here are some things you can do to help. 1. Create a Google local listing. Find your place of business in their map, create a listing and tie your listing to your location on their maps. That way when people do a search on Google for relevant information that pertains to local businesses, yours will show up. 2. Work on your SEO strategy so you do show up when people search for your company or your products/services. You would be surprised how much business you can drive to your local store from the Internet. If you are not able to get much success from SEO, then try pay per click. However, you will need to have capabilities on your site. Send out monthly online press releases to get the word out about your online web site. Lastly, create some social media interaction, like a facebook or twitter account. Twitter has been known to be used by a lot of local food carts that only give out their current location for the day by twitter, which is creating a lot of commotion among twitter fans. They are eating it up!