Discover why Dustin Magaziner, Managing Partner at PayBright, believes truly free terminal placements are the future of merchant sales. Plus James has advice for keeping cash discounting clients happy long term, and Patti explains why ISOs and agents should be diligent about keeping bad actors off the payment networks.
Bright Outlook for Free Terminal PlacementsThe future of merchant sales is in free terminal placements. Dustin Magaziner, Managing Partner at PayBright explains why in this week’s featured interview.

“We believe that the more friction you can eliminate the better, and I full heartedly believe that one of those main pain points for businesses is upfront costs, including terminal placements,” says Dustin PayBright offers free terminals to all card-present accounts, whatever their terminal needs might be. This includes everything from basic VX520s to smart terminals like Clover and Poynt, and PIN pads, too.

Dustin also noted that PayBright is looking for agents, even if they already have a primary partner. “We tell agents all the time, ‘If you want to use us as a complement to what you have, we’re happy to have that conversation’.”

Free Terminals Keep Attrition Low, Residuals Flowing

Offering free terminal placements can be a real differentiator for an agent calling on merchants. It’s also a great way to keep attrition down. PayBight goes the extra mile, replacing or swapping out terminals when a device breaks down, or a merchant needs an upgrade, “because we don’t want to give them a reason to change,” Dustin relates.

Free terminal placement is also a great way to keep attrition down, and boost the lifetime value of accounts.  “We would argue that our attrition, and therefore the length of time we hold onto accounts, is much better than our competitors, because we have better technology available. On top of that, frankly, profit margins aren’t as huge of a conversation when you’re selling value or technology, which is another big advantage for our agent base,” Dustin said.

Some ISOs and agents might ponder whether they should invest $400 or $500 to place a feature-rich device with a merchant, versus $120 on a basic device. “Well, if the lifetime value of the account is going to go up by two- grand, it’s probably a pretty good idea,” adds James.

No Cost to Agents or Merchants

Many agents struggle with the concept of free terminals placements because of the potential upfront costs. PayBright addresses this by providing terminals free to agents for them to place for free at merchants.

“You would not believe how many times I’ve talked to agents who don’t know what to do. They say, ‘I have this account. It’s going to bring me $700 a month in residuals, but they need this equipment and that’s going to cost me two-grand’,” James relates. “More and more as technology and integration plays into it, it’s getting more and more challenging for agents to get these deals done.”

Dustin urged agents to “Bring those deals to us. We are excited by them, because we know that those accounts aren’t going anywhere.”

PIN Pads Included

The COVID-19 pandemic has brought on a lot of changes in the way people transact, and businesses have grown uneasy about handling customer cards. As a result, more businesses are looking to install PIN pads. “They want to have a PIN pad that faces the customer, and a credit card machine right behind the counter,” explains Dustin. Offering free PIN Pads helps keep everyone safe without requiring merchants to shell out the money to do so.

“It’s a one-to-one ratio. If a merchant is getting three terminals and they need three PIN pads, they get three PIN pads,” says Dustin.

Sell More Large Accounts

“We all want our sales partners and agents to target larger agents,” Dustin said. That’s why PayBright doesn’t put any limits on how many terminals can be placed with a merchant. “The larger an account is, the more they qualify for in terms of equipment,” he said.

A successful sales agent needs a partner that encourages larger accounts, not one that discourages them with hard and fast rules and restriction.

Making Cash Discounting an Even Better Deal

Free terminal placement is also a great corollary to cash discounting. For starters, locking merchants into a terminal lease agreement detracts from the overall savings a merchant can realize from cash discounting.

Then there’s the possibility that they may not like cash discounting. “We’ve all had accounts that have tested cash discount that haven’t liked it. It’s inevitable,” Dustin notes. “But these merchants are still locked into that $50, $100, sometimes $200 a month lease for three or four years.”

Free trials – which is how many agents position cash discounting – should mean everything is free. “We want as little friction as possible, and with these high margin deals, it only makes all the more sense,” said Dustin. “You want to sign those deals whenever you can and keep them in any way you can.”

Requiring a merchant to sign a lease agreement is like throwing a wet blanket on otherwise good sales opportunity. “You’re leaving yourself open to one of the only remaining weaknesses of cash discounting,” James cautions.

Addressing Cash Discounting Pain Points

ISOs and agents may be opening themselves up to losing merchants over some of the quirks in and clunky ways most cash discounting programs work today.

“The truth is that cash discounting still has some very significant pain points,” explains James during the Questions from the Field segment of this week’s episode. And there are companies out there integrating cash discounting program with POS systems and addressing other pain points. They are structuring programs that address the irksome problems in traditional cash discount programs, such as dealing with taxes, refunds and reconciliation.

So, don’t sit back comfortably assured that you have merchants who can’t be poached because they’re on a cash discount program. Because there’s probably another agent out there selling a cash discounting program that addresses pain points in your program. And one day that agent may walk into one of your merchants and say “I see you’re doing cash discounting. That’s great. Let me ask you this question: how has it gone in terms of integrating with Quickbooks?”

It’s time to start thinking through all the known and potential pain points around cash discounting, says James. Create a set of FAQs around cash discounting, and be prepared know the answers so you can sell cash discounting intelligently. Here are a few ideas to get the process started:

  • How are fee offsets handled?
  • How are fees detailed and reconciled in billing statements?
  • How are refunds handled?
  • What about taxes?
  • How does the program integrate with POS systems?
  • Can it readily integrate with backend accounting systems, such as Quick Books?