The Payments Guy

ISOs & Payment Consultants: How to Build Strong Bank Relationships in 2025

• Frank Sena • Episode 5

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Did you know that working with a payment consultant can significantly enhance your ability to navigate bank relationships and maintain your payment processing capabilities? In this episode, join Jason Selby, payments consultant and founder of Runaway Payments, as he discusses how partnering with a consultant can help merchants thrive in the complex payments landscape. You'll learn about the crucial role of payment consultants, the benefits they bring to merchants, and how to effectively manage the relationship with banks to ensure uninterrupted processing.

In this episode, these questions and topics will be covered:
• 1:19 - Overview of Jason's background and what led him to establish his consultancy firm. 
• 3:27 - The benefits of working with a payment consultant instead of navigating the banking landscape alone.
• 10:16 - The value of having a consultant to foresee and manage potential issues before they escalate. 
• 12:52 - Challenges processors face with registered merchants and the importance of established relationships. 
• 14:23 - Identifying red flags for banks and how startups can scale responsibly with the right guidance.
• 30:55 - Real-life examples of merchants who navigated challenges successfully or failed to do so. 
• 34:00 - The importance of maintaining good relationships with both banks and processors.
• 41:12 - Final takeaways for merchants on how to foster positive relationships with their banking partners.

If you found this episode insightful, please leave a rating or review on your preferred listening platform and share it with other business owners! Let’s empower more merchants to succeed in the payments landscape.

Jason’s Links
Website: https://runwaypayments.com
Email: jason@runwaypayments.com

Have a question about something in the episode? Send your questions to Info@PayDiverse.com and check out our FAQ page https://paydiverse.com/faq

Connect with PayDiverse:
Instagram: https://www.instagram.com/paydiverse
Website: http://www.paydiverse.com
LinkedIn: https://www.linkedin.com/in/franksena

UNKNOWN:

Thank you.

SPEAKER_02:

Hey, welcome to The Payments Guy, your ultimate guide to demystifying the confusing world of merchant payments. I'm Frank Sena, your host, a merchant payment specialist with nearly a decade of experience. In each episode, we'll break down the toughest challenges in the payment space so you can be better informed when navigating payments for your own business. From minimizing the impact of chargebacks, avoiding funding issues, and ensuring you're never stuck without the ability to process payments, we'll help you make smarter decisions Hello and welcome to the next episode of The Payments Guy. Today we're going to be talking with a friend of mine in the industry, Jason Selby. He is an industry insider who has recently started his own journey as a payment consultant. And he's going to pull back the curtain on how working with a payment consultant can help you navigate your bank relationships and keep your ability to process payments healthy. So I'm really psyched to have Jason on the show today. Let me just give a little intro on who he is. and his background. Jason is the founder and CEO of Runway Payments, which is a dynamic payments technology company and full-service advisory firm. Before founding Runway Payments, Jason led business development at Maverick Payments, which is one of my preferred bank partners, where they became the fastest-growing, privately-held payment processor in the U.S. Pretty cool. Jason has a unique insider's view on what the ISOs and banks are looking for when they're dealing with merchants. And he has good insight on what merchants need to know to build strong, low-risk relationships in the payments world. Jason has a keen sense for advisory, a clear-sighted approach to consulting and empathetic selling, both directly with merchants and then also when negotiating and managing agents, ISOs, and other resellers. If Jason isn't scaling his business at runway payments, he's anxiously watching UFC fights on a Saturday night or running on a beach early in the morning somewhere. I also hear you like to surf, Jason. Is that true?

SPEAKER_00:

I do a little bit, yes.

SPEAKER_02:

Nice.

SPEAKER_00:

So cowboy.

SPEAKER_02:

Yeah, I love that. And I didn't know you were into UFC either. I've actually never really watched any of those fighting events, but I know they're pretty fun and exciting.

SPEAKER_00:

It's... I wouldn't call it my life, but it's my pride and joy on Saturday nights. It's a good hobby. Definitely. Thanks for having me on. I appreciate the kind words.

SPEAKER_02:

Yeah. Well, we're psyched to have you here. And by we, I mean me, since it's just me.

SPEAKER_00:

Thank

SPEAKER_01:

you.

SPEAKER_02:

So, Jason, you've worked at a registered ISO in the past, and you work with these acquiring banks as well for the last few years. So I know you've seen the ins and outs of payment processing from an ISO's perspective or from that merchant bank perspective. So today I want you to tell us a little bit from what you've observed, what are the biggest benefits for merchants who are working with a payment consultant rather than trying to figure out the payments landscape on their own?

SPEAKER_00:

Yeah, it's definitely a good segue into the broader conversation here. Again, I appreciate you having me on. Yeah, the last couple of years, having been on the processor side, it was certainly difficult. In some cases, working with what I would call more kind of like agent resellers, if you will, kind of companies that were a little bit more focused on just trying to find merchants and wing them over to the processor. I would advise most merchants or all merchants, especially when they have a business online, they work with a payments consultant, someone like you or someone like myself that really understands the landscape, knows the lingo. I don't know if we'll get into some of the different terms, but everybody seemingly has a different definition for all of these different terms and lingo that you'll hear in payment processing. So I think just navigating, knowing what to say, when to say it, is extremely beneficial. And we're also looking at a real shift in the way that banks, so these are blue chip, large banks, and then smaller, more specific fintech and sponsor banks and payments, the way that they're looking at specific verticals. And that regulation can change seemingly overnight. Credit policies can change. And so I think just having the guidance of a consultant is extremely important. And just kind of having that security when you're focused on just building the business, that somebody has an eye on your accounts receivable really, which is what your payment processing is, is extremely important.

SPEAKER_02:

I remember to your point about kind of different trends that are happening in the banking world and as banks kind of change their risk tolerance. I remember a couple of years ago when CBD sales became a big thing. There was only one processor who was really handling them. And all of a sudden, they decided, this is too risky. We want to get out of this space. They pulled the plug on thousands of merchants across the country. And all these merchants were scrambling, looking for solutions. So none of them knew where to go. And the ones who were working with me, I was able to help them find backups and find additional solutions. So I think that's a great example of why it could be really beneficial for a merchant to work with a payment consultant rather than trying to figure everything out on their own because what most of the merchants received was just a notification from the bank, hey, your account has been terminated, good luck. And they were like, I don't know what to do now. So that's where experts like us can come in and help.

SPEAKER_00:

Yeah, and I think, you know, can a merchant navigate this space? Sure. When you start looking under the hood and you realize, first off, the amount of, let's call it, all of them institutions that are involved just when a credit card is run and all of the different institutions that are paying just to authorize that credit card then you start looking at all the different providers that are there the gateway companies and then the processors what sponsor banks are the processors matched up with and then that will help determine their credit policy you know what ability do the processors have to take on certain merchant types can they take registered merchants are you in a business type that the the that Visa and MasterCard are looking to either make registered, which they've done recently with gaming. Visa looks differently at gaming now, so they're looking at verticals essentially that were, let's call them, kind of in the gray area. And it's okay to say that I think the card brands and the banks are looking at ways of staying in certain verticals longer in the way for them to do that is to monetize it. And so having redundancies, you know, as a consultant, having multiple processor relationships, being able to work with another processor, if you experience an issue at one is extremely important and not having, you know, as a merchant, not having to, you know, deal with issues with the business and then, oh, I got to go navigate the payments ecosphere.

SPEAKER_02:

Well, that's actually why we named my business Pay Diverse because we want to help merchants diversify their payment solutions and not have all their eggs in one basket to avoid that very situation where once a bank decides they're not interested in playing in that space anymore and they drop out and then a merchant, if they don't have backup solutions, is stuck without the ability to collect payments. And that can be a big problem, especially if they're paying for advertising or paying to get those sales to their website. They're not able to process the payment They're just bleeding money.

SPEAKER_00:

For sure. I completely agree.

SPEAKER_02:

You mentioned registering with the card brands, and I have a feeling a lot of our merchants might not be familiar with what that means. Can you just give us a brief kind of overview of what that is?

SPEAKER_00:

Yeah, there's certain business types where the card brands require that you're registered with the card brands. They have what are called high brand risk registration programs that essentially put what let's call a more watchful eye on the business and the transactions that the business is putting through. The processor that your consultant is going to be working with, their sponsor bank, will be responsible for actually submitting that registration. So there's nothing that the merchant or the consultant is actually doing, but the processor is going to guide post-approval that that's registered with both Visa and MasterCard. And generally, the Visa registration programs are$950 a year, MasterCard's$500 a year. It used to be$500 a year for both. So when I say we, I think consultants and just the industry as a whole expect MasterCard to at some point probably go to$950 as well. And I don't know if Visa will look at changing those rates. But once you're on that list, it's not that you're on the bandwidth to be able to do what you need to do it's just you have a more watchful eye right so if there's issues that you start experiencing that's where managing that having a consultant to kind of see things before they happen and just deal with the processor that's where it's really helpful so knowing and how to navigate you know different verticals you know I used to in the past we'd work with consultants that are more focused on let's say retail brick and mortar and And then every once in a while, you know, they'd work with, you know, an account that was maybe in a tougher space and navigating that for them was a little bit difficult. So you see where it, I don't want to say it pays to, but it helps obviously to have the guidance and the experience of navigating the processor where there's regulation to hand, you know, to deal with. You're in a registered vertical, how to communicate that with underwriting. and then also how to long-term create some longevity with the risk team, how to manage business as you scale. And I'm sure we'll get into that too, but there's a big onus, as I would say, is put on the merchant as well to just simply communicate their plans for growth. That is, I'm sure you've dealt with this before and you know where I'm

SPEAKER_02:

going with that, huh? I sure have, yeah. And we're actually, my next question for you is going to be about chargebacks, but just to kind of wrap up the card brand registration piece. So essentially, there are certain verticals that can be deemed by the card brands like Visa and MasterCard as very high risk, and Visa and MasterCard will require merchants in those particular verticals, which are typically in a gray space, which could be something like adult or gaming, for example, or maybe crypto-related business, vape-related business.

SPEAKER_00:

Telehealth, telemed.

SPEAKER_02:

And what it means to be registered is that the merchant has to pay an annual fee that's pretty steep, which is about$1,500 for Visa and MasterCard. And then they have to renew that every year, and there's advanced scrutiny on them from the card brands. So they have to keep an eye on their performance and their chargebacks.

SPEAKER_00:

Yeah, and working, I think something that I didn't I forgot to mention earlier, and maybe it's obvious just as the kind of conversation was coming together. The processor, not all processors can work with registered merchants. And the card brands over the last couple of years have added new and different balance requirements at the bank level. And so what they're doing is the banks are going to the processors and saying you can only have a certain amount of registered merchants as a proportion to the remainder of your portfolio. So processors are also having a little bit of a difficult time, or let's say a more difficult time, kind of treading through working with those verticals. Again, just the benefit of having a consultant that has relationships with these processors and sponsor banks that have been built up over time. As this regulation gets introduced, they're going to be less inclined to push business like that away when there's a big relationship that's there. And then when there's a trust there, they know that there's an ability to manage kind of the, the ecosphere here.

SPEAKER_02:

Right. So, um, consultants like us, we have great relationships with our ISO partners who have great relationships with their banks and being able to leverage those relationships can really benefit those higher risk merchants. So let's talk about chargebacks a little bit because we know chargebacks are always a hot topic, especially in this high risk space that we work in. And typically as a merchant's business grows, they often experience more of these cardholder disputes or chargebacks. So from an ISO's perspective, ISO is doing the underwriting and kind of managing the risk for that merchant bank. What kinds of red flags will the risk team see that are triggered by chargebacks? Like how does a merchant get on that risk team's list of merchants that they need to keep an eye on and monitor?

SPEAKER_00:

Yeah, that's a good question. It's broad, so I'll try to kind of hit on a few points. I think first, if you have a startup brand or a company that doesn't come to the processor or you're working with your consultant on something that's new with no processing history, I think everybody would agree it's going to be a little bit more difficult initially to kind of spread your wings. Not that you can't process and scale, but you're going to want to be really careful. I would always tell merchants and consultants that we would work with when I was at the processor, you just try to communicate with us. When you're submitting the application, there's a reason why processors have to set volume limits on things it's not because you know there's a ceiling that they want to put but you know there's only I mean look how many businesses there are how many businesses are there in the United States 50 million and there's 150 processors so just by means of numbers there's got to be some system that manages things but communication is key and then obviously as you start to scale depending on the vertical some processors will be a little bit more, they'll have a bigger appetite for allowing volume to process through what the approved volume was on the application. The difficult part of this conversation is that it's all in the context, right? Based on the vertical, there's going to be certain verticals that processors are just going to say it's okay when they're scaling because there's not too much liability there. And then there's going to be other verticals, other MCCs where the processor is probably going to put the clamps down especially when they start to see chargebacks and disputes come through and you know I kind of was alluding to this earlier with how visas change their and I say visa visa really is sets the standard for card regulation in the US when they change their regulation on registered merchants they also change their regulation or the way that they see chargebacks so they really are extremely focused on count so in a lot of times we would have merchants that would be at a 1.5% ratio, but they have two or three chargebacks because they're not running that many transactions. We want to make sure that that's handled and that it's not getting any worse and that we start to see that number decrease. Where count becomes an issue is obviously when you start to do a lot of transactions. That's where you can then go on Visa's dispute monitoring program and then their Visa for fraud monitoring program. And then that's where similar to kind of a registration program. It's another registration program that merchants can be on where visa will then mandate that you have an amount of time to start to see a decrease. So you could lose your potential merchant account. And so having a consultant, that's just kind of seeing all these things and avoiding before they happen. And there's remedies you can put in place like RDR and, you know, dispute management remedies to, to, to help with this. But

SPEAKER_02:

so, So you're saying basically that if a merchant's chargebacks go over a certain level, that will kind of trigger the risk team to start looking at them and consider maybe some preventative measures to stop the chargebacks from coming in. So they could potentially pull the plug on the merchant's account and say, oh, you're not allowed to process any more transactions, and we're going to hold on to all of the funds that we've collected from your customers until you fix this problem or you provide an explanation for this increase in chargebacks. And something else that I heard you say is that the metric that they're primarily concerned with is the count of chargebacks. So what that means is, and I explained this in my last episode actually of this podcast, is there are two ways to measure chargebacks. There's by count and by volume. So by count literally means the number of chargebacks that you get in. And it's calculated by looking at the ratio of chargebacks to total transactions. So if you get one chargeback and you've run 100 transactions, one chargeback divided by 100 is 1% chargeback ratio. Then you have chargeback by volume, which just means the dollar value of those chargebacks as compared to the total volume that was processed in that monthly period on that merchant account. And banks will sometimes look at that, but for the most part, it's that count that they're mostly concerned with.

SPEAKER_00:

Yeah. And the, uh, the, the, when you look at chargeback volume, that's really where there's immediate, what I would say like financial risk, right? That's where a processor is going to be a little bit more concerned because they may see chargebacks for larger tickets that are coming through and they're going to want to make sure that you've, you know, the merchant is able to cover potentially that or more disputes. And then that can obviously be the end result of a big chargeback count situation. So as I say, it's all in the context.

SPEAKER_02:

Right. So typically if a merchant is selling a higher ticket item, like let's say$1,000 transaction, obviously there's a lot more risk with that being charged back than a merchant who sold something for$32. So that's when they're going to be taking a look at the volume as well. If the volume of the chargebacks is high, then that is a red flag as well.

SPEAKER_00:

Yeah. When you see some of those quickly, it's less likely that's the bank or the card brands that are getting involved or even from a regulation perspective. The processor is going to see that, right? And they're going to get concerned. And the processor, when they see that, they're going to reach out to the consultant that sent them a deal and they're going to ask them what's going on and they're going to want them to paint them a picture about what's going to happen in the future and how they're going to limit that.

SPEAKER_02:

Yeah. So it sounds like what you're talking about is like a chargeback mitigation plan, which I've seen banks request before. This is basically when I'm merchant does start to get a lot of chargebacks coming in and the bank gets spooked. So they basically tell the merchant, listen, we're not going to cut you off completely, but we need you to explain to us exactly why you're getting all of these chargebacks and what you're doing to prevent this from happening in the future. Yes.

SPEAKER_00:

And work, find a processor first off that has good reporting and good chargeback reporting. Because I'll just... This is not secret sauce. If you see chargebacks that are starting to mount, you probably are not seeing it before the risk team, but you have an opportunity to get involved before the risk team decides that they need to get involved. It's something that's already on their radar. There's no way. You don't have AI and these risk tools that these processors are using. I just guarantee it. So if you see chargebacks and you have a system that allows you to actually consultatively manage your merchants it's okay you're not like admitting guilt you know and showing up to the police station with your hands up if you submit a chargeback or a mediation plan say hey listen I saw a merchant was having some issues with whatever there is some fulfillment problems or I don't know whatever the problem is whatever the and maybe it's not even a problem it's just a little bump in the road deal with it right

SPEAKER_02:

it's okay to right I always advise my merchants to that we need to be honest and transparent and proactive with all of our banking relationships. Because like you said, there's no hiding it. These underwriters and risk teams, they really are good at their jobs. They have access to data. They know what they're doing and they know what to look out for. So it's always better to be proactive and say, hey, for example, if a merchant has a really high transaction size out of the norm, we always tell merchants, Let us know that in advance before you process it so we can give the bank a heads up. Because a lot of times that will trigger in the risk system a red flag like, whoa, all of a sudden this merchant is doing a really big transaction or they're attempting one. This could be fraud. Hold their funds. Put everything on hold until we get an explanation. But if that merchant is able to be proactive, give us a heads up in advance. Hey, I'm going to run this large transaction. Here's a copy of the invoice. the risk team will take a note and they love that. Risk team loves when we give them a heads up and are proactive about things because like I said, otherwise it can flag an issue in their system and then they have to be proactive to try to stop any potential issues. So another example of that is an increase in chargebacks. If a merchant sees a bunch of chargebacks come in, they realize, oh shoot, my fulfillment company will like really messed up something and now it's causing all these issues or oh we had a really bad traffic source and now that's causing a lot of chargebacks like yeah tell us that be proactive let us know and we will get it fixed but if you are going to try to hide it or be sneaky then the risk team is going to catch you and they're going to disable your ability to process payments and they're going to hold all your funds

SPEAKER_00:

and they've these risk teams they've seen it all and they've heard it all so there's no benefit in trying to as I would say there's no benefit in trying to be cute with what you're telling the risk team. Just, just look, if something happened and it was a situation where if it were to happen again in the future, you could have done something different to help avoid it. And then you would have been able to communicate it with the risk team. Fine. Just do that in the future. If you missed something and it just is what it is, it's fine, right? That's okay to just be communicative about it. And, you know, it was, it was funny when we would, you know, I, just have seen situations in the past that just crack me up. There's some stuff that I really can't really talk too much about, but just thinking about times where people could have communicated a lot better, I think about, again, what can you do on a daily basis to just kind of manage the business a little bit better? Look, I've thought about this with runway payments a little bit. As I start scaling the business out more, how am I able to properly manage all these businesses because you know my big thing as a consultant I believe is my differentiating ability to consult be empathetic understand the different verticals manage and deal with the different processors right but if you're not managing those relationships and you're not keeping an eye on the transactions you're not doing as we say you know trying to knit or nip these problems in the bud before they become real big problems at some point you know you'll start to see attrition um That's not good. And I know with consultants as well, there's a few good ones out there, but there's a lot that are vying for business. So you missed the ball for a minute, especially having worked at a payment processor before this, where we were grateful to have worked with so many different consultants in the industry. You see something, you drop the ball on something and that merchant, they can get blacklisted.

SPEAKER_01:

Yeah, correct.

SPEAKER_02:

Yeah. Um, we are always, uh, working with our merchants to keep their communication with the bank open and transparent, um, because it really behooves them to do so.

SPEAKER_00:

So

SPEAKER_02:

tell me a little bit about the relationship between the acquiring banks or the merchant's bank and the card brands. like Visa and MasterCard. The way I understand it is that Visa and MasterCard are kind of up top. They work with all of these banks under them. And if they start to see chargeback issues coming from one bank partner, then they're going to apply pressure to that bank to fix it. Because usually the chargebacks mean the merchant is doing something that is not pleasing their customers. And that's a problem. So the card brands kind of take responsibility for getting that fixed. So how does that relationship work and how do ISOs kind of navigate keeping the card brands happy while also keeping their portfolio of merchants to be happy and healthy?

SPEAKER_00:

Yeah, I mean, I think most processors today really are just focused on risk and underwriting. Some have good onboarding, but they're really focused on risk and underwriting. because the card brands as you mentioned that kind of sit at the top of the upheaval they can essentially just go to any point in the chain and say you're doing something wrong but generally you know if some if a merchant were to cause an issue with a processor or a registered merchant were to have some sort of inquiry it would come from Visa to the sponsor bank and then from the sponsor bank to the processor so Just to clarify,

SPEAKER_02:

sponsor bank is the acquiring bank. The acquiring bank, yes. And the processor that you're using this term is also the ISO. Correct. The same thing. And in one of my previous episodes, I went through all the terms and terminology and we talked about how it's used kind of interchangeably, processor, ISO, bank. They do have different roles, but it is commonly, we use those terms interchangeably. interchangeably. So just so everyone understands where you're talking about the processor, you're talking about the ISO in this case.

SPEAKER_00:

Yeah. And, and not, not to go on a tangent too much, but I mean, quickly when a, when a credit cards run, you know what happens? I mean, there's the issuing bank that issued that credit card. I mean, you could have a chase issuing a visa card. So chase issuing is being pinged and, you know, we say it's important to make sure you've got the right merchant category code because the There's data that's running through that authorization system immediately to that issuer based on the size of the ticket, the transaction, what type of business it is, what they do. It all pings that together and then runs all the way up through the card brands at the point of every transaction. So they ultimately decide really what happens. And Frank, I'm sure you've also experienced this too with American Express. with certain merchants potentially that when they process over a certain amount of volume, American Express, who's actually really kind of set up as a bank, more VCMS card or more networks, they could come in and say the merchant has to establish a relationship directly with us for their merchant account. So really the card brands really show... I've actually

SPEAKER_02:

never seen that, but that's crazy.

SPEAKER_00:

Yeah, they can. They'll just say it and the processor and the... acquiring bank, just that's it.

SPEAKER_02:

Wow. They just grabbed the account. Yup. Interesting.

SPEAKER_00:

Yeah.

SPEAKER_02:

Um, so this is kind of a fun question for you. Um, I want to hear some horror stories that you've seen from risk teams. Obviously don't need to name any specific merchants or any, any situations, but I'd love to hear about, um, maybe an example of when a merchant really does the wrong thing. and how it impacts the bank and then maybe an example of a merchant doing the right thing and kind of successfully navigating over this issue.

SPEAKER_00:

Yeah, so obviously I got to be careful with details, right? But having worked at a major payment processor, I would tell you the amount of times that a merchant has had some sort of organic, whether it's an organic or inorganic issue, right? Whether they chose for this to happen and it was a perpetuated fraud that the processor got stuck in or they didn't mean for it to happen maybe COVID and there was big inventory shortages and they had a bunch of chargebacks it legitimately happens where a merchant will just shut their bank account down when a bunch of disputes are rolling in and then all of a sudden the processor has to eat it and that happens the ISO takes

SPEAKER_02:

a

SPEAKER_00:

loss

SPEAKER_02:

then

SPEAKER_00:

the ISO literally takes a loss And so when we talk about the chain of working with merchants, that consultant who's had a relationship with that ISO for a long time, potentially consider that relationship strained. I mean, look at the situation and you never know. So there's impacts downstream and upstream.

SPEAKER_02:

Cascading issues, right? Like the merchant now is impacting the agent's relationship with the ISO. It's now impacting the ISO's relationship with the acquiring bank and the acquiring bank's relationship with the card brands. So merchants, I find a big part of my job as a payments consultant is helping merchants understand understand how this whole thing works because a lot of times they take things personally. They think the risk guy has a personal vendetta against them. That's not how it is. You can't take it personally. You have to understand how this works. Your business has a direct impact on the ISO and their relationship with the acquiring bank. And if the acquiring bank sees a lot of chargebacks coming in across other verticals, then they're going to apply pressure with the ISO to get it fixed. And that's where the risk team comes in and has to really lay down the law. And sometimes it seems unfair, but if you understand the bigger picture of how everybody is impacted downstream, like you said, then you can maybe navigate it with a more rational mind instead of getting emotional and assuming someone's got it out for you.

SPEAKER_00:

Yeah. And it's like, I would, I would always tell merchants, it's like, you're like the VIP at the bank. You know, you're walking in there with a big briefcase and the senior vice president's there to greet you every time. And that's the type of relationship you want to have with your bank. So for some reason, it's kind of acceptable and understood that, you know, if you're going to have a checking account, you know, with Chase, you know, you're going to, you know, you want to, you want to be cool with the bank, right? You want to be cool with the processor. Yeah, you really do. The ISO, I'm sorry, these link, the lingo, the terms, you want to be cool with the ISO. You need to manage

SPEAKER_02:

a

SPEAKER_00:

good

SPEAKER_02:

relationship with them.

SPEAKER_00:

Yes. you do and we were talking about it earlier where you know processors their job is to manage risk for these acquiring banks these acquiring banks which as we were talking about earlier blue chip banks and some smaller banks that really are not focused on payments they may be focused on some other fintech stuff they may be focused on loans they may be focused on mortgage whatever it is checking accounts they're not focused on payments so they expect the product to manage things a particular way. So having and being cool with the processor, the ISO, and then subsequently your consultant is extremely important for longevity.

SPEAKER_02:

Right, and I mean, this is where having that payments consultant relationship can be really helpful because in a way, my ISOs are like, I'm like one of their clients. I bring that I'm a lot of business and I help bring them revenue. And so they're gonna be more inclined to work with me to help fix a problem with the merchant than they might be on their own. If a merchant is just working directly with them, the bank or the ISO might not really have that much sympathy or that much motivation to help them. There's thousands of merchants out there. So a lot of times a bank isn't gonna bend over backwards to accommodate a merchant's request. It's just easier for the bank to say, sorry, we're closing account and we're done. We've got plenty of other good merchants out there who are not going to give us a headache that we can work with. And a lot of times, merchants don't understand that.

SPEAKER_00:

Yeah, they don't. There are times too that I would tell you, at the processor, getting calls late at night, someone needing to get something done. So that's common too. And again, I think as the merchant, having a good track record and just responding to inquiries when they come up, it's good. Because inevitably, I can think about... A little case that I had a couple years ago at a company before my last company actually was more of a sales office and this merchant was shut down from Stripe and right before Thanksgiving and it was the Wednesday before Thanksgiving so Black Friday obviously being the next day after that. Knowing the processor's not gonna be open on Thanksgiving, there's no way to get this merchant account spun up on Black Friday and it was a big beauty brand and they were running a big sale and they had a ton of traffic on YouTube channel beforehand and yada, yada, yada. And, you know, I was newer to the industry at the time when this happened, but thankfully, you know, I had a good enough relationship as the consultant with one of our ISOs that we were working with. And the owner of the company that I was working with, you know, he got on the phone and said, listen, we need a favor. And we had a good track record. And so that helped too, right? So also, again, you know, making sure that, you know, you'll get the sense as a merchant, I would always say too, because there's a lot of consultants out there when you're speaking to a consultant it's not just about selling there's this connection kind of thing that I would say that's going to have to be forged at some point because if you're going to be working together long term it's the same way like I call my banker or he and I text yeah right text him like hey I got a wire coming in blah blah blah that's how you should be with your consultant so if you don't get that vibe either and that's not going to be available long term I would look elsewhere

SPEAKER_02:

absolutely I love when I'm working with any sort of vendor that I can just text them and ask a question and it's not this complicated. Send an email, wait 24, 48 hours to get a response. They don't respond on the weekends. To my own detriment, I am always checking my messages, always responding with merchants. They either have me on a messaging app or even on iMessage and I'm here for them if they need something. So I think that's kind of the difference between different quality of consultants like you said and it's always good to have someone who you know has your best interest in mind I think again a big part of our job as these payment consultants is helping merchants to understand the big picture and how everything is affected by it by any issues that you might have and how to get it resolved a lot of times I might explain to a merchant how the underwriting process works and they get mad at me and say, well, you need to reconsider my application. Listen, I'm not the one who's underwriting your application. I'm here helping you to navigate this process, and you have to understand how the bank is looking at this. These are the questions they're going to be asking. I'm not the one who's telling you no. I'm just trying to help you achieve success here. So that's the benefit of working with a payment consultant. We can help explain what's happening and how to solve solve problems and get them resolved quickly.

SPEAKER_00:

Completely. Full service, right? Making sure that you're taking care from the very beginning, through the application, getting through underwriting, and then as we've talked about, just managing scale, dealing with the risk teams, if and when that needs to be dealt with.

SPEAKER_02:

Chargebacks, getting your volume increased, helping you get your bank account changed, billing descriptor issues, All these things we help our merchants with every day. I always tell my merchants, if you're not making money, I'm not making money. Helping getting you approved is just one part of my job. I don't even get paid for doing that. My job is to help you manage that account once you've got it approved and keep it healthy and keep your relationship with your bank healthy so that you can continue to collect payments.

SPEAKER_00:

I think that's kind of the good part about how the economics work out in payment processing as well right where ultimately you know I think long term the benefit for everybody is as we just continue talking about is good communication up and down the stream you know make sure you kind of have a good understanding of like ecosystem you're entering into if you're a merchant or if we're talking to the consultants here

SPEAKER_02:

communication is key communication is That's key. Yeah. So that's what I was going to ask you. Like what are some kind of final takeaways or advice that you might have for a merchant on how to kind of maintain the best possible relationship with their bank partner?

SPEAKER_00:

Yeah. First off, have your documents in order. A lot of times if you're working with a consultant, like as Frank was just saying, they're more so during underwriting, they should consultatively be driving you through underwriting, but they're also playing the role of messenger. So a lot of times there will be stuff that they probably think is, for lack of a better word, silly. Right, unnecessary. Why do they need my tax return? Yeah. But then that's where they start driving through underwriting. Okay. Yeah. I, it's probably silly. Here's why, or at least I've dealt with this in the past. So it actually makes some level of sense. Right. I guess. And to be

SPEAKER_02:

clear, tax returns are not required for every application package to get through underwriting, but that's just an example of an additional document that could help get you your application approved a lot faster rather than waiting for the bank to look at your bank statements so you don't have that much cash on hand and wonder why you're asking for a quarter of a million dollars in processing volume when you only have$1,000

SPEAKER_00:

in your bank. On that, another piece of advice, too, is when you start noticing trends with underwriting, when you submit certain verticals and they start asking for certain documents, and you have opportunities in those verticals in the future, right? This is the consultant. The consultant should be asking up front for the documents.

SPEAKER_02:

We know underwriting is going to

SPEAKER_00:

need this. As the merchant, you may be thinking, why early before we even submitted this to underwriting are we talking about tax returns and bank statements and processing statements and yada, yada, yada? I'm sure most merchants who have operated businesses before know how underwriting can go sometimes right so having documents in order being able to communicate that to the consultant when the consultant is communicating that from the processor and then wanting to drive that through underwriting that all being cohesive there helps it makes things a lot smoother

SPEAKER_02:

I always tell my team because I have a team of admins who help me to manage all the applications that we submit to our bank partners I always tell them your job is to make underwriting job as easy as possible yeah we want to have the files named clearly what they all are. We want to make sure we're providing all of the things that we know underwriting is going to need and any explanations. If we notice this merchant is a startup merchant, however, they have authorized.net, a payment gateway, is debiting their bank account for some reason. Well, if they're a startup, why is authorized.net charging them? So I just had this with the merchant the the other day and he said, you know what? I have no idea why they're charging me. He said, I applied for a merchant account directly with authorized.net and it wasn't approved and he sent me some screenshots showing that there's no payment processor associated with their authorized.net account and an email saying, sorry, your application was declined. So now we have this explanation upfront and when we submit this merchant's package to our bank, we're going to proactively tell the risk team. FYI, there are deposits or debits from authorized.net on the bank statements. Here's the explanation. Here's the screenshots. We're anticipating your question and we're answering it ahead of time.

SPEAKER_00:

Yeah. Or, you know, if you, your consultant asks for bank statements, um, there's a couple of different ways to look at that. First off, you know, processors and ISOs are going to look at and risk teams are going to see ending balance. They're going to want to make sure in context, is that going to be able to handle whatever amount of volume you're asking for, the high ticket that you need for your transactions, so on and so forth. It's also sometimes easier to find out if a merchant has processing by just looking at their bank statements because you're going to see deposits in there on their bank statements as well. So a consultant generally should be looking at your bank statements and also just looking through. I would look through there and say, okay, I see merchant services, you know, bank card, whatever, deposit in there. There's a deposit here for me. I want processing statements for all those. We need the processing statements. Because if not, what's going to happen? You're going to get the application submitted to the processor and you're going to be waiting there because you need more volume. And then it's going to take them two, three days. They're going to look at the bank and they're going to say, oh, I see other processing statements in there. So having the documents, I mean, all the documents available and ready when you have an on the ball consultant, it's very cohesive. it helps things get through a lot easier and once you establish that foundation from the start it's just communications easy handling again any potential risks scenarios that may come up later becomes very easy

SPEAKER_02:

yes and it's a fine line between I always tell my team we need just the minimum mandatory docs we need to get this application into the underwriting queue let's get that in as soon as possible to get in the line to get on And in the meantime, we can continue to follow up with the merchant to get the more optional docs like the tax returns or things like that that we anticipate will probably be needed, but are not the bare minimum needed just to get the application on underwriting's desk. So we're always trying to help expedite the process. We'll ask you for the things that we know underwriting's gonna need, but we're also gonna push you through to get that application looked at and underwritten as soon as possible.

SPEAKER_00:

For sure.

SPEAKER_02:

Awesome. Well, Jason, it has been such a pleasure. You're my very first guest on my podcast. So this has been really cool. And I think you shared a lot of interesting insights from the ISO or the processors perspective for our merchants to just kind of peel back that curtain and help merchants understand the bigger picture of how all of this is working in this payments ecosystem. So thank you so much for taking the time.

SPEAKER_00:

Definitely. Thank you for having me. I appreciate it. And, uh, I guess a little quick plug of Runway Payments, if you don't mind. So Runway Payments was launched last week. Congrats. If you're ISO, agent, reseller, advisory, and dealing with merchants and businesses directly on, as we kind of discussed today, helping them you know, process payments, navigate the, the payments ecosphere. So I, uh, I really appreciate, uh, you having, you having me on.

SPEAKER_02:

Yeah. So check out, uh, Jason's new business runway payments. He's a great resource for anyone looking to get insights from an industry insider or help you with merchant accounts. And then of course there's my business. I'm Frank Senna and my business is pay diverse and we help connect merchants with payment solutions. So, um, We're here to help. And thank you guys for listening. And we hope to see you next time.

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