IMGCAP(1)]This is the second part of a two-part series on ethics in the merchant-acquiring industry.
When making pitches to merchants, sales agents sometimes fail to provide every detail on transaction fees, interchange rates or other additional costs.
Does that mean ISOs need to train agents to practice ethical behavior? Industry experts agree that it does.
"Unethical behavior makes merchants suspicious of the whole industry," says Holli Hart Targan, an attorney with Detroit-based Jaffe Raitt Heuer & Weiss, P.C.
Ethical behavior requires embracing the old-fashioned value of honesty, she adds. For ISOs, that means making sure agents are trained to understand all the nuances of the products so they can explain how they work. At the same time, she acknowledges that "the products and services are difficult to understand."
Still, many ISOs simply fail to provide adequate training for their agents, agrees Debbie Bowles, a partner in Nashville, Tenn.-based Advanced Payment Solutions. "A lot of ISOs don't train sales representatives on the different interchange categories," she says.
Responsibility for that training resides with the ISOs, Bowles adds. "It's our job to make sure [sales agents] have the information they need," she says.
What agents say to merchants affects a merchant's view of the ISO, Bowles cautions. "Our reputation is very important to us," she adds. "The last thing I want to do is run into a merchant in the grocery store and hear them say, 'We got screwed.'"
Keep ethics training in mind when interviewing prospective agents, advises Matt Clyne, vice president of sales for McLean, Va.-based Sage Payment Solutions. "Hire nice people," he says. "Work with people with integrity. Have standards and hold people up to them."
Hiring reputable agents and training them in ethics improves merchants' perceptions of the industry, Clyne says. "The only way to raise the standard is by holding ourselves accountable and holding your people accountable," he adds.
And check references, Cline advises. "You need to look at the quality of references and the availability of them," he says. "If a former employer is willing to give a reference, that's a good sign."
Often Bowles relies on recommendations for a potential sales candidate. "A little information on someone on a personal level," she says, "gives you a little feel for who they are and if they will be a good fit."
Once an ISO hires the right agents, training can begin in interchange rates, fees and contracts. "Training should be the ISO's responsibility," says Jeff Fortney, director of business development for Clayton, Mo.-based Clearent, an ISO. Agents also should expect fair treatment from their ISO partner, he says.
Clearent agents receive a printed "bill of rights" that explains what to expect from the ISO, Fortney says.
The statement guarantees agents are treated like "partners" and are entitled to information on policy changes, prompt return of voice-mail messages and timely delivery of funds.
Dealing with agents respectfully encourages them to extend similar courtesies to merchants, says Dan Price, CEO of Seattle-based ISO Gravity Payments.
"If you want your salespeople to treat customers well, treat them well," Price says. "It doesn't mean you have to pay the most money or be the best. You have to be honest, open and do exactly what you promise you're going to do."
ISOs also need to invest time in agents to encourage longevity, Bowles says. New agents receive a guaranteed salary while building their business to prevent "desperation selling," she adds.
"I hired two agents in April, and they consumed 75% of my time for six months," Bowles says.
Sales agents are not licensed, and no federal guidelines govern ISOs, Fortney notes. However, he says trade groups, such as the National Association of Payment Professionals or the Electronic Transactions Association, could create ethics standards.
"My belief is that, until we as an industry bind together to say 'act ethically,'" Fortney says, "then we are opening ourselves up to federal intervention.
