As modern consumers grow more accustomed to non-cash payments, the payment processing industry continues to grow rapidly. From 2023 to 2030, the global payment processing solutions market is expected to grow at a compound annual growth rate (CAGR) of 12.1%. However, building a payment processing business can be challenging if you're wondering how to sell credit card processing. But you don't need to be a processor to offer merchant services to business owners. Many entrepreneurs build successful careers as merchant services resellers.
As a merchant services reseller, you find merchants, sell them payment processing services, and provide them with ongoing support. In return, you receive lumpsum commissions or ongoing revenue sharing from the payment processing fees collected from merchant sales. If done correctly, payment processing reselling can generate significant passive income for resellers.
However, you must understand the industry and how the resale process works to build a successful career selling merchant services. This guide explores merchant services, how to sell them, what type of payment services to offer your clients and other related topics.
Merchant services refer to various financial services and solutions that enable businesses to accept and process payments electronically, typically through credit or debit cards. This includes hardware and software for processing transactions, managing payments, and handling related activities like fraud prevention and chargeback management. These services facilitate smooth and secure transactions between customers and merchants, enhancing convenience for both parties.
Merchant service providers make payment software and hardware accessible for business owners. However, many merchant service providers utilize third parties to sell and distribute merchant services. Entities selling credit card processing services, such as Independent Sales Organizations (ISOs) and Independent Sales Agents (ISAs), play a pivotal role in the merchant services ecosystem.
Overall, merchant services encompass the infrastructure and support necessary for businesses to accept electronic payments, while ISOs and ISAs serve as intermediaries connecting merchants with payment tools and services.
While some payment processing salespeople only offer processing services to their customers, others also provide hardware and software. By becoming a one-stop shop for a merchant's payment needs, you can increase your commissions and provide better customer service.
Let's explore some of the products you can offer to your clients if you sell merchant services to businesses in the United States:
Credit card terminals and point-of-sale (POS) systems are essential for businesses accepting in-person payments. A card terminal processes card payments, while a POS system encompasses multiple functions, including inventory management, sales tracking, and customer management. Additionally, POS systems integrate with the cloud, facilitating easy access to live reporting data from off-site locations and ensuring secure data storage.
Businesses with modern POS systems benefit from a range of industry-specific tools. For example, restaurant owners can access various hospitality features, such as booking systems, floor management, ingredient tracking, tip automation, splitting bills, and other industry-specific tools.
While using a standalone card terminal to process payments is possible, most POS systems include card terminals. The choice between a standalone card terminal or a full POS system depends on the complexity of the customer's business.
A payment gateway enables online credit card transactions. When customers proceed to check out on a digital store, they're redirected to a payment gateway to input credit card details. The payment gateway encrypts and communicates the payment data to credit card processors, issuing banks, and other stakeholders. It's an essential payment tool for businesses selling products or services online.
If your business interacts with customers on the go, wireless payment solutions simplify accepting credit cards without a full-scale hardware system. Mobile card readers are compact devices that attach to smartphones or tablets, allowing businesses to accept card payments remotely.
Wireless solutions use Bluetooth or cable connections to communicate with the mobile device and process transactions through mobile POS apps. With mobile card readers, various on-the-go businesses, such as food trucks and market stalls, can accept credit card payments without a large POS system.
A virtual terminal is an online platform that allows businesses to process card payments manually via a web browser. It enables businesses to accept customer payments over the phone or via email. If a customer cannot visit a physical retail location, the merchant can log into a virtual terminal on a web browser and manually input the customer's credit card details to process a payment. A virtual terminal is a payment gateway merchants use instead of customers.
A merchant account is one of the primary products offered by credit card processors. It acts as an intermediary between the business's bank account and the payment processor, facilitating the transfer of funds from card transactions into the business's account. A merchant account differs from a traditional commercial bank account as it is only used to hold funds during the payment process—you cannot use the account for any other purpose.
Some popular payment service providers (PSPs), such as Square and Stripe, are merchant account aggregators. An aggregator does not provide access to a dedicated merchant account; instead, they group multiple merchants onto a single account to speed up the onboarding process and reduce underwriting requirements. While this makes accessing payment processing from a merchant account aggregator easier, it offers less stability. If you're selling merchant services, many clients will want exclusive access to merchant accounts, not aggregated ones.
Selling merchant services, like any service or product, can be intense. If you're unable to handle long hours and rejection, it might not be the right career path for you. Let's explore what selling merchant services entails:
First, you need to find prospects. There are four types of businesses you're targeting:
Whether buying leads, cold calling, or visiting businesses in person, contacting prospects as soon as possible is essential.
Once you know a prospect is interested in your services, it's time to make a sales presentation. Outline what you can offer the business and how it pertains to their needs. If you're working as an ISO or ISA, your organization will likely provide you with materials to help make sales presentations.
If a merchant is satisfied with your sales presentation, it's time to develop an offer. Not all merchants are alike, so develop an offer based on their hardware needs, payment volume, and other factors.
The credit card sales process doesn't stop when a merchant signs up for your services. Providing onboarding and ongoing support is critical to satisfy your merchants. Sometimes, you receive a commission based on your merchant's processing volumes, so maintaining their happiness is essential to sustain recurring revenue. Additionally, keeping your merchants content increases the likelihood of referrals to other business owners.
Now that you have a firm understanding of what selling credit card processing entails, it's time to start developing a strategy for your sales process:
Before you begin selling credit card processing to clients, you must determine what type of salesperson you will be. The merchant services sector has two primary options: registered independent sales organizations (ISOs) and independent sales agents (ISAs). What's the difference?
An ISO is an organization that negotiates agreements with payment processors and acquiring banks to resell their services to merchants. In addition to selling merchant services, ISOs typically provide onboarding services and ongoing customer support. They may also supply hardware. In return, ISOs receive commissions from payment processors and acquiring banks, which may be a lump sum or an ongoing portion of the merchant's payment processing fees. Creating an ISO involves various regulatory hurdles: you will likely need to have experience in payment processing, pass financial tests, and gain approval from payment regulators.
On the other hand, an ISA works as a contractor for an ISO. Their primary role is sales. ISAs identify prospects, sell payment processing services, and leave the onboarding and support processes up to the ISO. ISAs don't require the same scrutiny as ISOs; they work under the ISO's regulatory permissions.
Starting an ISO is challenging if you have no experience in the payment industry. New entrants may want to consider becoming an ISA to learn more about the sector and sales process before creating their own ISO. The ISA path is more accessible and less risky.
Once you decide whether to operate as a registered ISO or ISA, it's time to set some initial goals. Developing a sales goal is essential as it helps you understand your realistic income potential and provides a target to strive for. Speak with other people in the industry (or colleagues if you're working for an ISO) to determine a realistic goal for your first year in sales.
Narrowing your target market down to a single sector seems restrictive—it's tempting to approach the sales process with a wide net. However, this can make it much more challenging to differentiate yourself from other credit card processors. There are already experienced merchant service providers offering credit card processing services, so you must stand out. Choosing a specific niche can help you generate effective marketing campaigns and focus on specific payment tools.
As your business grows, you will learn a lot about helping merchants in your niche. This means you'll be able to generate real value for your clients, ensuring they have the correct tools for accepting payments. If you don't focus on a specific market, every time you gain a new client, you'll need to assess their needs individually. This is time-consuming and may eat into your bottom line.
As a salesperson, it's critical to help merchants understand the value of your credit card processing services. Below, let's explore some examples of how to provide value and educate your clients:
Merchants trust their credit card processors. They want to partner with a business that offers secure, affordable, and dependable payments. Designing a professional and informative sales presentation is the first step in establishing this trust.
Alternatively, if you're not confident in your design skills, it's now easier than ever to outsource this part of the sales process. Platforms like Upwork, Freelancer.com, and other freelancing websites make it simple to hire presentation designers. This is a cost-effective way for someone without design experience to access a world-class visual presentation.
Payment flexibility is one of the most critical elements to consider when starting your career as an ISO or independent agent. Modern consumers expect businesses to offer their preferred payment options — they're 63% more likely to shop at businesses that accept their preferred payment methods. Make sure that you're partnering with credit card processors that offer a comprehensive range of payments, including credit cards, digital wallets, contactless payments, QR code payments, or P2P transfers. The more options, the better.
While your initial sales strategy will rely heavily on cold and warm outreach, referrals should become a priority once you establish a customer base. If you establish a good relationship with a client, ask them if they have anyone in their network who may be interested in a new credit card processor. Many business owners have friends who are also in business, so it's essential to leverage existing clients to connect with prospective merchants. Research suggests more than 80% of B2B decision-makers begin their buying process with a referral.
It's also popular to offer incentives or rewards, such as a cash commission for every successful referral. Although this may seem costly, consider how much time and money you spend seeking new prospects. A referral is a shortcut to interested customers already connected to your business.
While selling credit card processing requires a deep understanding of merchant services and their benefits to businesses, you must also possess general sales skills to close deals. As you begin selling credit card processing, become a student of sales and marketing. Your competitors have years of experience selling merchant services to businesses; to outcompete them, a dedication to building rapport with prospective clients is essential. Whether it's reading sales books, watching content from leading salespeople online, attending networking events, or enrolling in a course, it's critical to seek continual improvement in your sales and marketing techniques.
Business owners and managers often lack significant experience with payment processing systems, so as a registered ISO or independent agent, you should offer added support. Many merchant service providers make the mistake of neglecting their clients after closing a sale. While moving on to your next prospect after onboarding a new client is tempting, neglecting your existing merchants is a significant oversight. If businesses encounter issues with your credit card processing platform and you don't offer support, you may lose them to a competitor.
Likewise, maintaining strong relationships with your clients makes sense in the long run. It is the right thing to do and will ensure a steady stream of referrals. Your business is only as good as its reputation, and if you build a strong reputation, it will benefit you in the future.
If you're ready to embark on a lucrative career connecting business owners with advanced payment tools, selling credit card processing is a perfect fit. Payment processing is undoubtedly a competitive industry, so it's critical to approach the process with the respect it deserves. Use the steps outlined in this guide to ensure you put your best foot forward when reaching out to prospective merchants.
Working with a reputable payment processor is essential for success. Your business is only as good as the payment products it resells, so don't overlook the importance of reselling services from the best payment providers in the industry.