Payment processing residuals can be a steady and lucrative revenue stream for value-added resellers (VARs) and managed services providers (MSPs). But if the idea of selling payment processing services is new to you, you probably could use some guidance about where to start.
The answers to these four questions can help point you in the right direction toward successfully adding payment processing services to your line card.
What’s My Niche?
A broad approach to providing payment processing services is best for providers with experience. Start with one, defined market you serve, such as cafes, professional offices, dental practices, or fitness centers. If you’ve been providing IT services and solutions to clients in that niche, you are probably knowledgeable about their industry and their business practices. Now it’s time to learn about their payment needs.
Study the relationships that businesses in your niche have with payment processors. Dealings can vary based on the average number of transactions the business has and average ticket size. In addition, some markets are considered high-risk, such as financial services, gaming, legal services or travel. You will need to know the ins and outs of getting these businesses the best possible payment processing rates, but also learn why they are considered high-risk. Does the niche you serve experience more fraud than other markets and have a higher rate of chargebacks? A part of your role as a trusted business advisor is to help your clients assess their operations and put best practices in place to minimize losses.
Also, consider industry and consumer trends impacting your niche. Some of your clients may be interested in transitioning to electronic payments to provide their customers with more convenience. Others may want to decrease the time and labor it takes to invoice and collect payments. Some businesses are expanding to online storefronts and payment portals to accommodate their omnichannel customers. Learn what your clients need to do to keep up with trends and stay competitive and provide the payment processing services that support their goals.
Can I Speak “Payment Processing” Language?
MSPs and VARs new to the payments space may begin to think that you need to learn a new language. You’re not that far off. Payment processing has a pretty extensive glossary of terms and acronyms —for example, acquirer, issuer, gateway, P2PE, NFC, interchange, and PCI DSS — that you’ll hear even in an early conversation with a payments company or a merchant who is looking for an upgrade.
You don’t have to be an expert on each role, technology or process at the outset, but it’s good to understand what terms mean so when you begin to explore solution and partner options, important information won’t get lost in translation.
Which Payment Processing Company Will I Partner With?
This is probably the most time-consuming question to answer. Like you, a potential partner should have expertise in your niche and do a good job of communicating in a complex ecosystem. But there are several other pivotal criteria a payment processing company should meet to be a valuable partner for an MSP or VAR:
- Do they have a strong channel partner program that includes information, training, and support your business needs to be successful with providing payment processing services? The company’s website should provide at least some information on the partner program, as well as contact information to learn more.
- Do they ensure you will receive a reasonable margin?
- Does the company offer the latest features and technologies that will meet your clients’ needs and position them to address changes on the horizon?
- Is the solution designed with strong security features and meets the Payment Card Industry Data Security Standard (PCI DSS) to the letter?
It’s also smart to talk to the company’s MSP or VAR partners to get an idea of what they’re like to work with. Don’t limit those conversations only to references the company provides to you — they may be biased. Talk to other businesses like yours so you can enter into a partnership with your eyes wide open.
What Do You Want to Get Out of Selling Payment Processing Services?
Building a new revenue stream from payment processing residuals will take an investment of time and effort, so what ROI are you looking for? Do you want to offer payment processing services to build stickier relationships with your customers? Are you hoping to use payments as an in with new prospects? Do you need more freedom to create total solutions that meet your clients’ needs or that result in better consumer experiences? Are you primarily looking to build recurring revenue to relieve some of the pressure of paying expenses each month?
As you answer other questions and dig deeper into your options for providing payment processing services, keep that goal at the forefront so your decisions result in the best outcomes for your business.