Despite a weak national economy and uncertainty over the debt ceiling, business apparently is booming for independent sales organizations.
“If you’re in this industry five years or more, you should be a millionaire,” though much of that wealth might be tied up in the business, Matt Clyne, a consultant and president of Washington-based Direct Connect, noted July 27 at the Midwest Acquirers Association Ninth Annual Conference in Oak Brook, Ill.
The show’s attendance figures reflected Clyne’s optimism, according to Donna Ayers, association president. More than 500 members of the ISO industry registered in advance for the three-day meeting, about 100 more than last year, Ayers said. Exhibitor space for 84 vendors sold out three months in advance this year, she noted.
Kicking off the Field Guide Seminar at this year’s show, speaker Ray Kenney, director of ISO partnerships for Cherry Hill, N.J.-based 1stPayGateway.Net, urged ISOs to take advantage of retailing’s shift to the Internet.
The Web gives merchants and ISOs the opportunity to transform themselves from local to international almost overnight, Kenney said. “Now you can compete with the big boys,” he said, referring to even small ISOs’ newfound ability to go international online.
ISOs can set up payment services for a bricks-and-mortar store and its Web counterpart in a “two-for-one” deal that greatly increases the residuals ISOs could earn from signing up just the offline store, Kenney told a crowd of about 100 Field Guide attendees.
The sites’ 24/7 operating hours also increase residuals over offline stores typically open from 9 a.m. to 9 p.m., he added.
To succeed online, ISOs should solve retailers’ problems by offering everything from “buy now” buttons to reasonably priced site developers, Kenney said.
International aspects of those online ISO opportunities occupied a talk by Rod Hometh, president of Newburyport, Mass.-based RocketPay LLC, which secures international merchant accounts.
As usual in retailing, international sales began with big national chains, such as Williams-Sonoma, but are filtering down to smaller players, Hometh said.
Global e-commerce could reach $983 billion this year and total $1.4 trillion in 2014, Hometh said, citing data from Cisco Economics Research Practice.
Showing a slide of Judy Garland as Dorothy in The Wizard of Oz, Hometh cautioned attendees that they are not in Kansas anymore when they delve into international payments. As such, they should learn the intricacies of currency conversion and become aware of differences in doing business in unfamiliar cultures, he said.
Back at home, ISOs have plenty of opportunities to sell services to community banks, said another speaker, Donna Embry, a senior vice president at Louisville, Ky.-based Payment Alliance International Inc.
Besides getting bankcard referrals from community banks, ISOs could sign up small banks for ATM branding, remote deposit capture, check automation, ATM outsourcing, instant branches, prepaid cards and mobile banking, Embry said.
Community banks have limited access to funds for loans and soon may see debit card margins erode as a result of new Federal Reserve rules that essentially cut in half their debit card interchange revenue, leaving them hungry for increased revenues and more open than usual to services ISOs can provide, she said.
Just the same, habitually cautious community bankers will remain slow to take action, thus forcing sales agents to call on them repeatedly, Embry advised.
“Banks do not make decisions overnight,” she told attendees. “You have to keep going in and working the banks.”
