Welcome back to WWYD Wednesday, the series where we dissect the high-stakes world of merchant services. Today, we’re looking at a scenario that’s a nightmare for any relationship-based agent: The “Backdoor” Contract.
The Scenario: A 14-Year Relationship Under Siege
You’ve had a high-volume Hibachi account since 2012. For over a decade, they’ve been your “bread and butter.” They trust you, and you’ve kept them with the same processor—Anytime Bankcard (ABC).
The History: Anytime Bankcard has a reputation for “bracket creeping”—slowly raising fees over time. In the past, this was an easy fix. You’d notice the hike, send a quick email to ABC, and they’d lower the rates back down to keep the merchant happy. It was a win-win: your residuals stayed high, and the merchant stayed loyal.
The Shift: The merchant was originally on a flexible month-to-month agreement. However, during a recent system “update,” ABC shifted them onto a 36-month term.
The Conflict: Another price hike just hit. You did your usual routine—sent the request for a rate reduction. But this time, ABC hit back with a “No.” They stated they would only lower the fees if the merchant signed a new 36-month agreement from today’s date.
The “Backdoor” Betrayal
While you were trying to negotiate behind the scenes, Anytime Bankcard went around you. Without your permission, ABC’s corporate office:
- Emailed the merchant the new 36-month contract extension directly.
- Called the merchant to pressure them into signing, pitching it as a “loyalty rate reduction” while glossing over the fact that it resets their 3-year commitment.
Now, your phone is ringing. It’s the Hibachi owner. He’s confused, he’s annoyed, and he wants to know why the processor you recommended is harassing him to sign a new contract just to get his old rates back.
The Dilemma
Your partner (the processor) has just stepped on your toes and potentially poisoned the well with your longest-standing client.
What is your move?
| Option A: The “United Front” –A BIG NO!- | Option B: The Rescue Mission (Likely) | Option C: The Nuclear Option (Do they care?) |
| Call the merchant, apologize for the “automated” outreach, and try to sell the 36-month extension as a way to “lock in” their savings against future hikes. | Immediately pivot. Since ABC is playing dirty, find a new processor, offer to pay the merchant’s early termination fee (ETF) yourself, and move the deal. | Call your ISO manager at ABC. Demand they honor the rate reduction without the extension or you’ll stop sending them new business entirely. |
What Would YOU Do?
- How do you handle a processor that goes “direct” to your client?
- Is the 36-month contract a deal-breaker for a client who has already been with you for 14 years?
- How do you repair the trust when the merchant feels like they’re being “sold” by their own provider?
Send me your comments – Do you stay and fight for the account at ABC, or is it time to pack up the soy sauce and leave?
Happy Selling,
David
