TMS Alters Agent Compensation Plan As Part of a Push to Leverage EMV And NFC

Independent sales organization Total Merchant Services Inc. hopes a newly altered agent-compensation plan will result in more merchants using EMV-compatible point-of-sale terminals.

The U.S. payment card industry is migrating to EMV chip cards, requiring that merchants use compatible terminals. As a way to motivate its sales agents and get more merchants onto the technology, TMS on Friday updated its free-terminal compensation plan to pay agents a $300 upfront amount, up from $200, and increased from eight to 12 times the spiff paid based on the net revenue generated the third month of a merchant’s processing term.

The TMS program uses Ingenico Group’s iCT220 POS terminal, which is compliant with EMV and near-field communication (NFC), in addition to accepting magnetic-stripe transactions. All of the devices are new. TMS will not disclose their cost or the additional cost of the compensation plan.

The confluence of the EMV migration, with its attendant shift in fraud liability to the party least prepared to process an EMV transaction beginning Oct. 1, and the growing consumer awareness of mobile payments, exemplified by Apple Pay, Google Wallet, PayPal, and Samsung Pay, is creating opportunities for companies like TMS to gain merchants.

“Yesterday, you had the ability to work with a swiped transaction,” Jeff Broudy, TMS vice president of sales, tells Digital Transactions News. “Now, with EMV, you need the ability to accept chip cards. With NFC you need to be able to accept the phone.”

For merchants, this means being able to accept whichever payment form factor the consumer wants to use, he says. “If you’re a merchant you don’t want to lose out on the way your customers decide how to pay,” Broudy says.

Ultimately, the program’s goal is to get more merchants into TMS processing agreements. “We’re making a huge bet,” Broudy says. “We think it’s a smart bet.”

Using EMV to capture market share may pan out for TMS, says Adil Moussa, principal at payments-consulting firm Adil Consulting, but it’s one not every ISO and acquirer may adopt.

When asked how likely it is that EMV will be an opportunity to capture market share, 30% of ISOs and acquirers processing less than $1 billion annually said it is likely to very likely, Moussa says, citing a survey he completed in 2014. Similarly, 29% of those with between $1 billion and $39 billion in annual processing volume had the same response.

That stands in contrast to the rating of 100% likely to very likely provided by those with $40 billion or more in annual processing volume.

“This can only work if merchants are not seeing competitive offers in the marketplace,” Moussa tells Digital Transactions News in an email. “As you can see, only the large players see EMV as an opportunity to capture market share. The rest are not too optimistic.”