How the Pandemic Has Forced Changes in the Way Acquirers Approach—And Sell to—Merchants

Ever since the Covid pandemic set in more than a year ago, the payments industry has been abuzz with talk about its various impacts on merchant acceptance. What hasn’t received as much attention is how the pandemic has affected merchant acquiring. It turns out processors and independent sales organizations have seen some surprising results.

To be sure, ISOs and other payments providers suffered along with the merchants they serve while restaurants, hardware stores, and other Main Street merchants struggled with lockdowns, stay-at-home orders, and consumer wariness. But some acquiring-industry executives say there have been upsides, as well.

For one thing, sales agents have been forced to confer more often with their clients, offering advice and support and reinforcing a sales model the industry has been trying to instill in its sales force for years. “The pandemic has been a boon for consultative selling,” said Eric Jenks, national sales manager for PayTrace Inc., a Spokane, Wash.-based payments provider.

That’s because the disruption small merchants have had to contend with over the past 16 months has forced many to abandon their former reticence when dealing with sales agents, Jenks and other say. “Merchants are more open to talking to us because they needed some help,” says John Barrett, executive vice president for agent and ISO sales at Payroc LLC, Tinley Park, Ill. “They wanted to hear from us.”

Jenks, Barrett, and Jonathan Razi, chief executive of CardX LLC, a Chicago-based firm that consults with merchants on transaction surcharging, were panelists last week at the Midwest Acquirers Association meeting in Chicago.

The long-term effects of the pandemic, including merchant adoption of online and contactless payment technologies, has also led acquirers to look more critically at what their salespeople know about technology and their ability to transmit that knowledge to merchants. 

“Even as things open up, restaurants aren’t going to go away from what they started doing during the pandemic—online ordering, takeout, and so on,” said Barrett. That means the criteria ISOs apply to their salesforce, too, must adapt. “There is a change,” Barrett said. “We’re looking for people who know the business-benefit approach rather than the sales approach.”

For some executives, this approach can be evaluated against some fairly straightforward criteria. For Jenks, these include a willingness to take the time to ask for detailed information. “Are you really being consultative? How many questions did you ask on the call?” he said.

Even communication technologies that have enjoyed widespread popularity in recent months—such as Zoom—are coming in for closer examination. “We’re all sick of Zoom, but there’s a right way and a wrong way to use it,” Barrett said, adding his salesforce has “learned how to remotely prospect.”

Razi added that the pandemic has also lent momentum to surcharging—the practice of adding the cost of card acceptance to the sale—as state laws against the practice continue to fall. That, in turn, has opened new sales opportunities for ISOs. “Merchants want to use it, acquirers want to sell it,” he said. Colorado earlier this month legalized surcharging limited to 2% of the transaction sum or to the merchant’s actual transaction cost. That leaves only Massachusetts and Connecticut as the only states that still prohibit the practice.

One other effect of the pandemic, the panel said, has been that more sales agents have learned to install new software remotely, a practice that eases operations for the merchant and so inspires loyalty. “If I sell them an integrated payments solution, they aren’t going anywhere,” said Barrett.