Independent sales organizations have a new opportunity to sign up merchants for a low-cost service that helps consumers pay bills, transfer funds internationally, reload prepaid card accounts and buy minutes for their cell phones.
Merchants tap into the services, called Paytools360, using a standard laptop or desktop computer without any specialized hardware, the vendor says.
That vendor, Cpay 360 Inc., a Hollywood, Fla.-based provider of wire transfers and automated clearinghouse services, began soliciting ISOs this week to sell the services, says Naomi Mastera, Cpay national sales manager.
The company is offering ISOs and agents residuals on transactions made through the system, Mastera says.
About 1,200 merchants are using the services, which are provided by Fort Worth, Texas-based EmpaSys, a subsidiary of Vista Bank in Lubbock, Texas, Mastera says. Those merchants were signed before Cpay signed a three-year exclusive contract to sell the services, she adds.
When Cpay took over distribution, Masteral immediately saw the opportunity for ISOs because of her acquiring-industry experience, she says.
ISOs may mark up the fee Cpay charges for the services, but some have indicated they may offer the package free to merchants as a value-added service to differentiate themselves from competitors.
Providing the service without charge would cost less than giving merchants free payment terminals, which many ISOs now do, Mastera says.
Instead of offering to beat a merchant’s rates, ISOs may offer to match a merchant’s rates and include the services as a bonus to entice a merchant into signing up for card acceptance, she says.
Besides helping to sign new accounts, the services help retain merchants that find it more difficult to switch to another company for card acceptance when they use a number of services from their present ISO offers.
“ISOs love the idea of giving agents an advantage” in the sales pitch, Mastera says.
Cpay has five salespeople now selling services to banks and credit unions, and they will become the support staff for ISOs who sign up merchants for the services, she says.
Most customers come from the ranks of the underbanked or unbanked who often use money orders to pay bills, and the services do especially well in Hispanic communities, Mastera says.
Many merchants already provide check-cashing services, and the additional services make a good fit, she maintains.
Although Mastera declined to provide specific numbers, she says merchants charge consumers at three rates for bill payment performed through the service. Merchants assess the lowest charge for bills from companies that belong to the Paytools network, including many utility companies, she says.
The service costs more when a biller does not belong to the network, thus forcing the vendor to issue and mail a paper check to settle the account. Merchants assess the highest charges when a bill requires immediate payment to avoid a utility shutoff or other problem, Mastera notes.
For wire transfers, Paytools customers pay less than Western Union Co. and MoneyGram International Inc. typically charge, Mastera says, adding that phone top-off costs about the same as through other sources.
Once consumers have an ID for the system, they need not have all of their personal information reloaded if they stop into an unfamiliar store that belongs to the network, she says.
Cpay offers training in English and Spanish over the Internet to teach store clerks to use the system. It also provides marketing materials for the services, including signs, brochures and templates for print ads, Mastera says.
Although Mastera did not provide specifics on how much merchants pay for the services, she characterized the charges as inexpensive because the transactions are made on the Internet. Fees are based on the number of merchant bank accounts involved, not on the number of stores, so a retailer using one bank account for a five-store chain, for example, would pay the same as a single-store merchant, she says.
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