In the fast-moving world of payment processing, staying ahead requires more than just a good rate. Our latest roundtable brought together three industry heavyweights to discuss the shift from commodity sales to technology-driven partnerships.
The Great Software Debate: Proprietary vs. Agnostic
A central theme of the discussion was whether an Independent Sales Organization (ISO) should own its own point-of-sale (POS) software or remain “agnostic” by partnering with various providers.
- The Commodity Trap: Adam noted that if you only sell a terminal, a merchant can switch processors simply by changing hardware. To protect residuals, you must sell “tech” and features that add real value to the business.
- The Moat Strategy: Kermit argued that being agnostic is often a temporary state. He believes in proprietary or exclusive processing relationships because they create a “moat” around the merchant, making the relationship much harder to sever.
- Solution-First Thinking: Steven emphasized that ISOs must be solution-based. Instead of just picking a partner because they are in a specific vertical, agents must learn the actual pain points that the software solves for the merchant.
Mastering the “Three Pillars” of Success
Adam introduced a foundational framework for surviving in merchant services:
- Technology: Providing tools that help the business run, not just a way to take money.
- Service: Being available and reputable so the merchant trusts you.
- Pricing: Staying competitive without playing games, such as using dual pricing or cash discounting compliantly.
“Merchants want simple. When there is confusion in the buying process, they won’t buy. A confused mind says no.” — Adam
Evolution of a Leader: Working “On” the Business
Both Kermit and Adam discussed the necessity of evolving from a solo salesperson to a business leader.
- Time Allocation: Adam revealed that he spends 30% to 45% of his time researching new software partnerships and analyzing market fits.
- Scaling Teams: Kermit transitioned from doing everything himself to managing a team of W2 and 1099 agents, allowing him to focus on higher-level strategy and new verticals like auto-repair shop management.
- Continuous Education: Steven likened the industry to professional sports, noting that leaders must be “lifelong students” who constantly watch the “game tape” of the industry to stay competitive.
Recruiting and the 4% Rule
Building a sales team in this industry is notoriously difficult. Steven and Adam shared their “tough love” approaches to finding talent:
- The Vetting Process: Steven often tries to talk potential recruits out of the business. If they can be discouraged easily, they likely won’t survive the rejection of daily prospecting.
- The Success Rate: Adam uses the “80/20 rule twice”. Out of 100 people recruited, only about 20 will ever close a deal, and only about 4 will turn it into a lifelong career.
- The Residual Growth Plan: To filter out those who aren’t serious, Adam requires new agents to complete a “five-minute exercise” mapping out their financial goals for the next 13, 37, and 61 months. If they won’t take five minutes to plan their future, they won’t do the work to build a portfolio.
AI: The New Teammate
Finally, the group discussed the rise of AI in 2026. While AI is a powerful tool, it hasn’t replaced the “handshake”.
- Back-End Efficiency: AI is currently used for risk management, underwriting, marketing newsletters, and cleaning up complex data spreadsheets.
- The Human Touch: Kermit and Steven were adamant that AI should not replace human support or sales. Merchants dealing with their money want to speak to a human being, not a chatbot.
- Prompt Engineering: Adam encouraged all ISOs to treat AI as an enhancement tool, emphasizing that the most successful people are those who learn how to “prompt” AI to get the best results.
“Enhance, don’t replace.” Whether it’s through new technology or AI, the goal remains the same: provide better service to the merchant while protecting your long-term residuals.