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The Disconnect from B2C to B2B for Merchant Sellers

The conversation was going as many before it had gone with a very successful B2C selling, Independent Sales Organization (ISO), about their business. They saw declines despite their success because of Covid-19. It was eating into their income as B2C, location after location, closed or were submitting less card volume, the lifeblood of their residuals. So, I asked, “What is your plan?” I was kind of stunned when I was told that they were going to redouble their efforts in B2C and start selling lawn care and plumbers in B2B. I did my best to explain that these were not B2B verticals but home services and still B2C-type merchants. A better example would be converting business invoices to plastic, where there is a buyer and supplier.

ISO’s are fiercely independent by nature. Many have been in the business for years, perfecting and refining their businesses for enormous gains, building large books of business in a very giving B2C segment. But is this independence keeping this very same group from moving on to the next frontier, B2B? I think it is and here is why. B2C’s success has for years been primarily driven by three factors from the ISO. First, cost savings, where the ISO works with a given merchant to reduce costs based upon identifying where they might have been paying more than they are willing to charge. You know it better as the Race to Zero. It is a dangerous game, as next month or some point in the future, another ISO will more than likely play it with your account. Second, customer service, we do it better; we answer the phone when you call, heck, we even drop off paper when you need it. And lastly and more recently, technology, the ISO offers some front-end submission system or pathway to a Gateway to make it easy for the merchant to do business with them. The B2C segment has been awash in demand and opportunity, but it is not as great as it once was!

So, what is the alternative, and why are ISO’s so reluctant to take the jump into B2B? The alternative to B2C is, of course, B2B. There is a $10 Trillion opportunity in the market today, with only 8% of B2B Payments on Card. For the most part, you can’t see it from the street; you can’t normally walk into B2B and engage it. Therefore, it can be scary for the ISO, not to mention the sales cycle can be longer and slightly more complex than the normal restaurant with tip function that an ISO was selling in last week. Adding to all this, ISO’s are not receiving the training to effectively capture this business and are applying the same sales tactics to B2B that they did in B2C. Those selling in this space have resorted to an “easy button approach that involves Surcharging, Cash Discounting, and talking about Level III Data. The two former solutions may result in accounts that activate but never reach their full volume potential and are not long-term solutions for merchants in competitive environments.

B2B is not B2C and requires an understanding of how a supplier and a buyer interact. For certain, there is no easy-button approach. An understanding of the competitive threats of ACH, Wire, and Check is paramount. Gone are the days of getting a business to give you 2.5% just for the pleasure of it and its buyer. No, you have to be able to extract that value from the process and lay out the value levers for the supplier. You want the B2B Merchant not to have to do the transaction but want to do the transaction. Selling price won’t cut it as B2B merchants don’t want any cost, as they perceive that their Account Receivable (AR) costs are zero. Are they? Do you know how to assess this? Can you position Plastic as a payment alternative? Will you speak their language when you do?

Selling B2B will not be easy, but as an ISO or Bank Card Seller, what is your alternative? More of the same? Covid-19 has ensured that that ship is sailing and chasing it from the dock is a bad strategy. There is a new boat pulling in, and it has a ton of space on board. It is filled with decks and decks of opportunity, and precious few are sailing on it right now. The time is right to re-evaluate your strategy to seek out what you need to be successful in this space, to balance your portfolio, and connect what might be disconnected.

Roger McNamara Bio:

Roger is a 25+-year veteran of the Payments Industry, most recently as the Director of Business Development with American Express in the US. He has worked on the largest Acquisition targets for acceptance across multiple industries and across the globe that include: Airlines, Communications, Technology, Cruise Lines, Entertainment, Fractional Jet, Freight, Government, Healthcare, Insurance, Oil & Gas, Residential Rent, Restaurants, QSR’s, Retail, Services, Supermarkets, Travel, Vehicle Sales, B2B and Wholesale. Over that time, he has sold more than $300 Billion worth of Card processing and became an expert in Bankcard Interchange and Discount Rates, how they are calculated and what merchants pay to accept Credit, and how this is dramatically different from what they believe they pay. He is an expert in Merchant Statement analysis and payment processing and the rules and regulations associated with payments and associations. Roger has also developed the insight for Merchant Services Salesforces and salesforces, in general, to be able to better position their products and gain share, particularly in B2B. Let him show you how you can too. He can be reached at

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