Why MSPs Need To Consider Offering Payment Processing
In this exclusive interview, Chris Sandifer, AVP of strategic partnerships for FlexPoint, a division of Pivotal Payments, explains how managed services providers (MSPs) can benefit from offering payment processing and how the U.S. transition to EMV payment technology represents added opportunity for sales.
BSM: More MSPs are beginning to add payment processing to their service bundles. Can you elaborate on the benefits to MSPs when they add payment processing to the services they provide?
Sandifer: The first, obviously, would be revenue. Many companies simply don’t realize how lucrative the payment processing space is. We have many sales partners who easily clear six figures in annual revenue just by referring merchants our way. Some providers, (like us) give their sales partners ownership of these revenues which can be leveraged (sold or borrowed against). They have real market value.
Next would be service control. See, pricing, service levels, even ethical practices can vary greatly from one payment processing provider to the next. By providing payment processing services, the MSP can assure that their client is always treated well (best rates, best services, honest contracts) by their payment provider.
BSM: The trend of MSPs offering payment processing is occurring at the same time the U.S. is migrating to EMV technology. Does EMV open the door to additional sales?
Sandifer: The EMV landscape offers many opportunities for both service and equipment sales. Counter top devices, pay at the table EMV, even cellular and mobile EMV are all on the horizon. Add in e-wallet technology such as Apple Pay, Android Pay and Samsung Pay, and merchants are facing a myriad of choices to make. Now more than ever, merchants need guidance from tech savvy providers. Who better than their MSP?
BSM: What does an MSP new to payments need to know about the transition to EMV?
Sandifer: The transition to EMV will not occur overnight. Merchants will have many questions, and there will be many new wrinkles along the way. Many companies in the payment processing space are still trying to “find their way” so to speak, inventing the playbook as they go. However, there are a handful of payment processors with international reach, who have been handling EMV payments for years now. We are one of those companies. We were doing business in Canada when they had their EMV shift about six years ago, and we have learned A LOT over the last six years. Our customer service staff is well equipped to answer any questions a merchant has regarding EMV, while some of our competitors don’t yet know what they don’t know.
BSM: As a Canadian-based company, what advice would you give U.S. solutions providers about the transition, based on what you’ve seen in Canada?
Sandifer: Be proactive. When the shift occurred in Canada, for the first month, our phones were pretty quiet. After 30 days or so, we started to receive some calls. After 90 days, we became inundated with calls from both merchants and sales partners demanding EMV technology. Why? Because the effect of the liability shift was beginning to show up on merchant’s statements, negatively affecting their bottom line. Not being equipped with EMV technology for payment acceptance is akin to not having a security system on one’s store, or not having virus protection on their office computers. All it takes is one or two incidents to cause major losses. If you wait until there’s an issue, it may already be too late.
BSM: Are merchants more informed or is there still work to do to educate them about the transition to EMV, especially in niche markets such as unattended parking garages, theaters and box offices, and auto repair?
Sandifer: Merchants are still very much in need of help migrating to EMV. In fact, in most of the panels I have attended over the past year, its apparent that even VARS still have lots of questions about EMV. The transition is by no means a simple undertaking, so partnering with an experienced provider is critical.
BSM: How does FlexPoint work with partners to enable them to provide merchant services?
Sandifer: At FlexPoint, we offer two options: referral partner and agent/ISO partner. Referral partners simply refer the lead into our sales liaison, and we handle the rest: statement analysis, proposal, application, approval, boarding, and service after the sign-up. For agent/ISO partners we offer some of the best training in the industry: dynamic live webinars covering virtually any topic, with full Q&A sessions. We can help MSPs become walking, talking experts in the field, if they so desire.