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Cover Story: Survival Tactics |
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Increase sales and reduce attrition: This tried-and-true formula has led many ISOs to prosperity over the years. Unfortunately, the current economic crisis is putting that wisdom—and the ISOs that heed it—to the test.
In today’s financial climate, ISOs should take nothing for granted. Many merchants are so anxious about the economy that they have stopped making all but the most necessary decisions, which slows down attrition, reports Joyce Cook, president and CEO of International CyberTrans, based in Nashville. Nevertheless, her ISO is taking a largely psychological approach to retention by making calls and sending personal notes to existing customers in an effort to make them feel appreciated. The sales staff also is making a soft sell of products or services that the merchant is not currently using.
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Feature: Decoupling Not So Odd |
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In recent years, consumers’ everincreasing interest in debit cards—and card issuers’ push to capitalize on that interest—has sparked the introduction of new debit options to the market. Decoupled debit, one of those options, holds significant promise.
Unlike traditional debit cards, issued by the owner’s bank, decoupled debit cards are not linked to a demand-deposit account. Transactions are settled over the branded payment networks, with funds deducted from consumers’ checking accounts and paid to an intermediate service provider using the offline ACH network. Most decoupled debit cards offer enhanced rewards to users, such as points redeemable for merchandise and services.
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Feature: Home Field Advantage |
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While many large ISOs have broadened their geographical focus as they’ve grown, smaller companies and MLS agents often are limited by their local geographies. Yet with the right strategic levers in place, locality can serve as a differentiating advantage for smaller ISOs.
Focusing on merchants in their local communities is often the norm for MLS agents—largely because it’s the path of least resistance. Typically, an agent has relationships with business owners in the community that enable the portfolio to go from zero to 60 in a reasonably quick time frame.
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Surviving the recession, meeting PCI security requirements, and adding new products and services to current offerings top payment professionals’ concerns, according to a recent survey by ETA.
More than 70 percent of the study’s 260 participants cited the economic recession/reduced consumer spending or credit availability as harmful to the payments industry as a whole, followed by state and federal legislative or regulatory activity. Data security regulations and changes to interchange rates were deemed the least dangerous to the industry.
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ISO Corner: BOC, POP On A Roll |
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It’s no secret that check usage at the retail point-of-sale will continue to decline, accounting for just 4 percent of transactions in 2010, according to most estimates. Yet two methods of converting paper checks into electronic ACH transactions—point-of-purchase conversion, or POP, and back-office conversion, known as BOC—continue to attract attention, with some retailers and experts seeing greater potential for the former, and others for the latter.
POP, introduced in 1999 by Herndon, Virginia-based NACHA-The Electronic Payments Association, requires paper checks to be converted right at the checkout counter, then immediately handed back to customers. By contrast, BOC, which NACHA launched in March of 2007, permits paper checks to be collected at the point-of-sale and converted later. Retailers practicing BOC need a single image scanner for each store and can settle documents not eligible for ACH conversion as digital check images, image-replacement documents, or paper checks.
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