WHY HAVE WE CHANGED BUSINESS MODEL
Over the last 12 years in business, I have learned that a true partnership between Independent Sales Organizations (ISOs), Agents, and PaymentCollect™ has never been achieved. There are many factors to this and I will attempt to cover them here.
The first and most important problem is that ISOs and Agents never truly understood what we do. They view and compare us to a gateway. Other than forwarding transactions to a processor, we have nothing in common with gateways like Authorize.Net or CardPointe. We have a software client component that resides in each of the merchant computers. This client software needs to interact with the appropriate version of QuickBooks® in a seamless way, interact with the payment terminals, printers, Windows operating system, Windows firewall, network environment, and the many iterations of anti-malware on the market.
Complicating matters, none of these components remain static. Terminals stop connecting, develop corrupted batches, or require firmware updates (which we do on behalf of many different ISOs). Windows files get corrupted, DNS servers experience outages, anti-malware software blocks us out of the blue and payment terminals batch data gets corrupt. These factors change on a monthly to weekly basis, necessitating constant vigilance by our support and development teams to keep dollars flowing for merchants and their agents.
This is no easy feat. Each QuickBooks® product is different. Our plugins consist of hundreds of thousands of lines of code. In short, we are more of a Managed Service Provider than a processing gateway.
Secondly, PaymentCollect™ is required to be PCI compliant as the card data flows through our software and infrastructure on its way to the end processor. This poses tremendous liability for us. We need to protect our servers against cyberattack or no client will be able to process. That costs time and money. ISOs have none of this exposure and almost no infrastructure to maintain. With the exception of larger, full processors like Heartland, card data does not even flow through the ISO’s servers.
Thirdly, we answer questions related not just to transactions but also to the myriad QuickBooks® versions and their quirks. Our clients often turn to us for bookkeeping advice, advice which we offer at no charge.
Additionally, answering ISO and agent questions not related to PaymentCollect™ takes significant time. We conducted an internal review and our highly paid sales and support staff spend more than 40% of their phone time assisting agents with superfluous tasks. When we onboard and maintain an account directly, it takes an order of magnitude less time to support as we have full access and have streamlined our internal onboarding process and relationship with our processor.
Furthermore, ISOs frequently level harsh criticism at my staff for not immediately resolving problems caused not by PaymentCollect™ or the end customer but by the ISOs themselves. If emails are not replied to within a few minutes, if immediate demo calls and installations are not scheduled, if the red carpet is not rolled out…my staff are berated. They are told we are lazy and greedy. Even when we charged a flat 7.5 ¢ per transaction it was this way. Every penny we earn is a penny less that the ISO could charge. Listening to this vitriol has burned out our team, with a top employee leaving every two years on average. These employees are so highly trained that it takes a full year for them to be self-sufficient. It is a big problem.
Industry mergers and acquisitions have led ISOs to increase merchant pricing. By introducing new fees (such as monthly minimums, annual contracts, and exorbitant PCI non-compliance costs) and by purposefully scrambling statements, ISOs are distorting the price that merchants think they are agreeing to pay when they sign up.
Lastly—and most importantly to you—agent satisfaction in the industry is plummeting. We greatly appreciate our partner agents and the yeoman’s work that they do building relationships nationwide and endorsing our product. Those agents who know us well know that we see ourselves as your biggest advocates and allies. But time and again we see good agents fired via quota creep and their accounts taken by the house. After that point, we get little to no on-the-ground support and end up maintaining the account in virtual isolation on a fraction of the revenue. Independent agents are struggling. Rather than enabling ISO investors and executives to get rich off this process, we want to offer fair, lifetime, guaranteed residual revenue to both agents and their ISOs.
We are not looking to re-invent this industry. We are not starting an ISO. If you sell FD150 standalone terminals to pizza parlors, we have no interest in poaching your market. But what we do want is to sell QuickBooks® integrations to merchants in need at a price they can afford, with fair compensation to the processing agent or entity that sent them our way.
In conclusion, we at PaymentCollect™ insist upon:
- fair pricing for merchants
- fair treatment for agents, and
- fair compensation to PaymentCollect™ for our development, service, and support.
Here is how we propose to accomplish these goals: