Thoughts on Fee Income: Merchant Processing Services
Virtually every bank I speak to feels the pressure to increase earnings. In advising banks on such matters, I try to focus on items that are relatively easy to implement, and will generate a stream of earnings with minimal ongoing effort. Merchant Processing Services fall into this category. It’s this simple, really: every one of your business customers that accept debit and credit cards (and digital wallet payments) need this service. Too many banks have the attitude of “we can provide that if they need us to” instead of very intentionally trying to be the primary provider of such services.
It is exactly this type of thinking that prevents you from collecting all the fee income you should. Begin now to assess your current program in terms of pricing, functionality, and marketing support. If it is not what you need to be competitive, look at renegotiating with your current vendor, or evaluate alternate vendors. Get a program in place that you can be proud to offer. Then, incorporate this service into all your sales training, calling officer preparation, and marketing materials. Leverage the relationships you have to sell more Merchant Services to your existing customers, and make the product you offer a selling point for prospective customers as well.
Properly executed, this plan will generate fee income in two ways: signing bonuses for new accounts, and per transaction fees monthly. A third benefit is a stronger, more exclusive relationship with your business customer. These benefits alone should make you invest the time to focus in deploying a Merchant Processing Services program.