Not convinced a managed services provider (MSP) can sell integrated payments? Chris Yurko, VP of integrated payments at First American Payment Systems, says MSPs can sell payments and should. “If you don’t sell payments, you’re missing out on the opportunity to make your relationship stickier, upsell additional services and recurring revenue. You’re leaving money on the table,” says Yurko.
You can sell integrated payments to businesses in a wide range of vertical markets, but according to Yurko, clients in these markets, in particular, are looking for easier and more efficient ways to handle payment card transactions:
1. Field Services
Many of your clients providing HVAC, plumbing, and electrical services still use paper-based methods to manage service calls and payments. Furthermore, organizations that use field management systems may use standalone payment systems. “It’s not a lack of payments. It’s a lack of quality integrated payments,” he points out. Integrated payment solutions don’t require users to access multiple portals for reporting, streamlining processes, saving time — and resulting in happier customers.
2. Service Industries
With the growth of janitorial, cleaning, landscaping and other services, these businesses are looking for ways to stay competitive and profitable. Giving them the ability to save time by setting up recurring payments and accepting payments on-site can help them improve their productivity. Yurko points out this market is generally underserved from an IT perspective and may represent a substantial opportunity for your business.
3. Gyms and Fitness Centers
Although franchise fitness centers may already have a management system with integrated payment processing, more people choose smaller gyms, yoga studios or boutique fitness centers. These clients may need your help to handle payments efficiently. In addition to accepting payment cards, integrated payments can also allow them to set up time-saving recurring billing and keep cards on file up to date.
4. Independent Consultants and Contractors
If you provide IT services to a consultant, ask how they’re handling payments. It’s becoming common for businesses to use consultants rather than hire additional staff in some industries. You may be able to provide them with a solution for recurring billing or other payment challenges.
There are No Bad Opportunities
Although you may find it easier to sell integrated payments in some vertical markets and niches than in others, if your client operating any business wants greater payment flexibility and convenience, you may have the chance to provide them with a solution.
Talk to clients who manage professional service offices, such as accountants or lawyers. Although most healthcare management systems have internal billing capabilities, you may also find a need for integrated payments with outpatient healthcare providers, including physical therapists and home health services. You may find opportunities to sell integrated payment processing to retail and restaurant businesses as well.
Yurko says the only situation where integrated payments are a no-go is when the client’s monthly credit card sales volume is less than $1,500. It’s also critical to consider margin. Working with that client may not be lucrative for you or the payment processor if the average ticket size is small.
What Selling Integrated Payments Can Mean to Your Bottom Line
Although there’s no way of knowing exactly what your income from selling payments would be, you can estimate your potential income if you know the client’s average monthly credit card sales volume. Yurko says, on average, merchants pay an effective rate of about 4 percent (although that can vary depending on the payment processor), and the MSP that sells the account would receive about 30 percent of that.
So, if your client has an average of $5,000 per month in credit card sales, and their effective rate is 4 percent, they would pay $200, and about $60 of that is your income. If you have 10 clients like that one, your monthly income would be about $600. If you have 100 clients with that same credit card sales volume, your income would be $6,000 per month.
Of course, your clients’ credit card sales volumes will differ from each other and vary from month to month, but there’s no denying the potential for a substantial and steady revenue stream.
Moreover, if you set up payments correctly, there isn’t a lot of effort required. Yurko says in an ideal situation, your payment processing partner will help you with integration and testing, and then they may even help you market your new service. The right partner will also handle onboarding and pricing, and adding new clients over time will be an automatic process.
If you are shying away from the idea because you think your MSP is too small, Yurko says it’s easy to implement payments with a small client base — and it will provide you with some additional income while your business grows.
Where to Start
Yurko suggests that MSPs considering selling integrated payments send a simple survey. Ask your clients if they accept credit cards and gauge their interest in using an integrated payments portal through your company. If there’s interest, get ready to grow your business.