The Up & Downs of Starting a Merchant Services Career

Good Wednesday morning everyone. I got into the merchant service business several years ago. (Thank You Mark) At the beginning of my merchant services career there was a lot of ups and downs,
overcoming the fear of cold calling, handling rejections, understanding underwriting, closing my first deal. The past couple of years I’ve met and worked with many sales professionals. Some of them new fresh-faced salespeople (and a few crusty veterans) and wonder why they were here.

What was about the merchant services business that attracted them? Why did they stay? It was obviously a tough job. What were they getting out of it?

I finally came to the conclusion that the pluses outweighed the minuses, there are more ups then downs – that they were getting more out of it than it cost them. Now after speaking with several seasoned professionals and as I can reflect back on my experience and say that there are some very significant benefits to selling merchant services full time and as a career choice. But as with all business endeavors, you have to be able to pay the price for privilege.

So here is my list of the ups and downs of merchant services.

Halfway through composing this list, I realized it’s more like a Rorschach test. What you see as the ups says more about you than it does about the activity you’re doing. The same with the downs. So your list may look different.

The Ups

Residuals – a check every month and up front bonuses
One of the things I’ve found out about me is I really like getting paid. And getting a nice check every month on the 25th makes me smile. Sales partners typically earn between 25 and 60 basis points of their processing dollar volume. How much that means in dollars to you get depends on your agreement. The secret to making good money is to keep selling and getting upfront bonuses from $300-$400 per account and keep building your portfolio, this isn’t adding true ups and production bonuses. You build it up, you keep it up through merchant retention and new sales.
And if you need to, you can even take a week or more off. The whole portfolio won’t go away because you took some time off. As the old saying goes, you could do a lot worse.

Closing a deal – the rush
It took me several years of working in a retail environment and a close encounter with the real world to realize how much I missed selling.. I found out I get a huge rush from closing a deal. Doesn’t matter if I’m selling one terminal or closing a multi-merchant account, I get the same exhilaration. “Hi, my name is David and I’m a sales-aholic.”

Mastering a puzzle – many moving pieces
To be really good at merchant services sales, you need the mind of a chess player. You can be good but it takes years of work to understand the game and be great at it.

Setting your own pace – be your own boss
This is the up for which so many people strive. It sounds really good. From direct experience, I can tell you the practical effect is you work your butt off taking calls and servicing merchants sets your schedule for you as much as cold calling.

You have to be constantly be building new sales pipelines.

To compete with the big players, you have to go the extra mile and a half. But you don’t mind it because you’re calling the shots.

Selling your residual – the second payday
Some months you grow, some months you just survive. You earn some nice residuals along the way. After a few years you’ve built a good little merchant portfolio. You start to wonder what it’s worth. The answer to that question is surprisingly difficult to answer with any precision. The best you will probably get is a range of values – that is, until you have an offer in writing. This is what I call the second payday for merchant services. It can be very sweet provided you’ve avoided some minefields along the way.

The Downs
Learning curve – ouch!
You can learn merchant services sales on the job. If this is the route you take, you’ll need about two years to form a reasonably complete picture of merchant bankcard services and master the skills you need. You had better have another source of income in the meantime. If you start with an agent program or sales team that has very good training, you’ll get most of the critical information you need in the first thirty days. Sadly, there are very few good training programs in our industry. Check out the training before you sign on to a merchant services program.

 Being taken advantage of – the dark side
I have seldom worked with a sales agent in this industry who does not have a story about getting ripped off by someone for whom they were writing deals. Here’s how they usually go: “I didn’t know anything about the business when I started. I met a guy who said he’d get me started. He taught me what to say and how to close a merchant deal. I sold that way for two and a half years. I didn’t have a contract but I got paid every month. Then I learned that some ISOs offer a better deal than what I was getting. When I started sending a few deals to a different ISO that offered me a better split, the first guy sent me a letter saying I forfeited my residuals. I didn’t have the money it would have cost me to sue him. I lost it all and had to start over.” This is an all to common story.

If you’re new, you need to get some help understanding how the business works and how to keep someone from taking advantage. Sales training will not teach you this. Paying for good information is a wise investment.

And here come the requisite platitudes: Caveat emptor. Look before you leap. Get it in writing. Experience is a hard teacher. First you get the test, then the lesson.

We sell in a saturated market. There are thousands of merchant services salespeople combing over every inch of merchant locations across the country. And now for the first time we have a competitor advertising on television that they have the easiest merchant services deal available (Square.)

You won’t survive if you’re not persistent. You will have some rough competitive ups and downs. The majority of new merchant services salespeople give up in the first 3 months to take up some line of work that’s perceived as easier, less complicated, and less punishing. Can you take it?

Merchant attrition – the hole in the bucket
An average rate of merchant attrition in our industry is 1-1.5% per month. At that rate your 100 merchants (without factoring in new sales) will become 82 merchants within 12 months. How are you going to fix that hole in your bucket?
There are only two ways and I would advise you to do both: Sell more and keep more. At an average cost of sales of $400-600, each new merchant is expensive to bring in. It’s easier and less costly to keep a merchant you’ve sold. To do this you must be completely committed to do whatever it takes to thoroughly exceed the expectations of your merchants. This is how we train you and what the best in our industry do.

To sum everything up: The Ups out weigh the Downs, You need to survive long enough to get good at selling merchant services, 3-6 months to get a good momentum going and residual growing . The Ups will surpass the pain of the Downs, I promise.  It’s not instant success but it can pay off handsomely if your willing to work it long enough and DON’T GIVE UP!!!