PDX Sales Agent Training Manual 08212009

©PDX Enterprise Solutions Proprietary and Confidential 8/21/2009

PDX SALES AGENT

TRAINING GUIDE


TABLE OF CONTENTS

Introduction Section 1 Bankcard 101 Section 2 Pricing Section 3 Introduction to Products Section 4 Terminals Section 5 Touch Tone ARU Processing Section 6 IP Processing Section 7 Value Added Services Section 8 Underwriting Guidelines Section 9 Merchant Forms Section 10 Selling Successfully Section 11 Getting Started Section 12


SECTION 1

Introduction


THE COMPANY OVERVIEW PDX Enterprise Solutions is a comprehensive credit, debit, and check card payment systems provider dedicated to the service and profitability of our Clients. PDX Enterprise Solutions enables our Clients to become “business consultants” with the goal of building long-term relationships with their customers through a comprehensive suite of services and quality processes, complimented by proactive, professional and experienced people whose goal is the success of our customers. Our Mission The people of PDX Enterprise Solutions believe there are two customers to serve in bank card processing – our Clients and their merchants. Our employees are dedicated to supporting the product and service needs of our customers, enabling our Clients to consistently win and retain more business than any other acquiring provider. Our Values and Beliefs We the people of PDX Enterprise Solutions believe in...

• our constant commitment to providing the industry's best service • integrity, both ours and of our Clients • the never ending search to provide a competitive edge for our Clients • the profitability and welfare of our Clients and their merchants • providing the best in class solutions and systems, enabling all of our customers to make the most of every

opportunity Our Management Team With well over a decade of experience at all levels of bank card processing, the management team of PDX Enterprise Solutions brings exceptional expertise and an entrepreneurial spirit to every facet of merchant bankcard sales and support. PDX’s unique approach and insight enable the company to deliver the products, services and processes that our Clients need to make the most of each and every sales opportunity. Michael Hass – President/Chief Executive Officer

Michael has been dedicated to the Bankcard industry since 2004, serving in roles that include technical development, sales, sales management, and operations. Prior to forming PDX ENTERPRISE SOLUTIONS, Michael was a Group Development Manager within US Bank’s credit card division (3rd largest merchant account provider), a group that acquired over 250,000 new cardholders and generated over $1.2B in net revenue. Michael was responsible for leading the application development team in acquiring new cardholders (via the Internet on US Bank’s website as well as partner and affiliate sites), project management, application development, quality assurance, and being a liaison to internal groups in an effort support US Bank’s efforts. Michael is a graduate of the University of Victoria and currently resides in Portland, with his wife.

Jon Herkenrath – Director of Sales & Marketing

Jon is a 5 year veteran in the merchant processing industry. He has served in such roles as Independent Sales Agent, Marketing Director, Inside Sales Director and Outside Sales Director for various organizations. Most recently Jon was the VP of Sales for Proverbs Merchant Services, a registered ISO/MSP of Global Payments. He was responsible for all aspects of Sales, including the Call Center, Inside Sales, Outside Sales, Agent Support and the communication between these departments and back end operations. Jon managed a team of over 50 employees and increased company revenues by 50% in


a few short months. He has a proven success record of team development, project management and product/service delivery.

Jon is a native of Portland, Or and studied Psychology and Business Management at Southern Oregon University. He currently resides in Portland, with his fiancé.

Our Processing Platform PDX Enterprise Solutions, LLC, based in Portland, OR, was founded in 2009, by Michael Hass. PDX Enterprise Solutions was formed to provide an opportunity for Sales Agents, Associations, and Community Banks to offer integrated credit and debit card payment processing to their customers. PDX Enterprise Solutions also offers related hardware and software products and value added services to merchants through their affiliation with various vendors across the U.S. Processing platforms are provided through a partnership with Priority Payment Systems. PDX’s comprehensive suite of products and services positions our Clients to provide expedient and customer-friendly management of their merchant accounts. Every aspect of the merchant experience is supported by proven “best-in-class” products and a never-ending commitment to service that is unparalleled in the merchant bankcard industry, enabling our Clients to clearly and effectively differentiate themselves. PDX offers:

• Products and services tailored to specific industry needs • A single point of contact that is knowledgeable in all aspects of the industry and who will work to get

issues resolved quickly • 24x7 online access to all of the information you need to sell and service your customers

PDX’s industry specific solutions include the following:

• Retail • Restaurant (including Quick Service Restaurants) • Mail/Telephone Order • Internet • Business to Business • Supermarket • Lodging • Car Rental

PDX offers your merchants the ability to accept all forms of payment:

• Visa • MasterCard • American Express • Discover • Pin-based Debit • Electronic Gift Cards • Check Guarantee with Conversion • EBT

With competitive card rates and unparalleled service, you will stand apart. Our certification program ensures the Point of Sale terminals and software that you sell exceed the quality and feature function requirements of your customers. PDX has partnered with industry leaders to bring you a


comprehensive range of terminals, PC software, and mobile/wireless terminals, all complimented by PIN pads, check readers and check imagers. Merchant Exchange (MX), PPS’s proprietary web-based system, provides you 24x7 access to your customer’s information, enabling your business to be responsive and professional. MX allows you to:

• Enter new merchant applications and track status • Enter requests for additional products/services • Make changes to merchant information • View merchant demographic information, daily activity, profitability • All reporting in a Real-Time environment

A History of the Bankcard Industry Charge cards date back to 1914 when Western Union provided metal cards giving free, deferred payment privileges to some customers. These cards came to be called “metal money”. In 1924, General Petroleum Corporation issued the first metal money for gasoline and automotive services to employees and select customers. These were later offered to the general public. In the late 1930s, American Telephone and Telegraph (AT&T) introduced the “Bell System Credit Card”. Soon, railroads and airlines introduced similar cards. Credit cards grew in popularity until World War II when “Regulation W” restricted the use of these cards during the war. This temporarily suppressed the growth of this new payment alternative. After the war, people were beginning to acquire more costly modern conveniences for their homes, such as kitchen appliances, washing machines, and other electronic appliances. Modes of travel were more advanced and more accessible to the majority of people, so travel became more popular. These demands on the budget made the concept of credit more popular – people could buy things with credit that they could not afford to buy with cash. In 1946, a New York banker developed a credit system called Charge-It. When customers charged local retail purchases, the merchant deposited the charge slip at Biggins Bank and the bank reimbursed the merchant for the sale. The bank later collected payment from the customer. In 1951, customers of New York’s Franklin National Bank could submit an application for a loan, were approved for credit, and were given a card they could use to make retail purchases. The merchant copied the customer information from the card onto a sales slip and called the bank for approval of transactions over a certain amount. The bank would credit the merchant’s account for the funds minus a fee to cover the cost of providing the loan. Consumers liked the convenience and line of credit offered by the new cards. Merchants found that these customers usually spent more than customers paying with cash. Handling a bank-issued card was safer for the merchant and, even with the fees that the bank charged, was less costly than maintaining their own credit program. By 1959, many banks were offering the option of revolving credit, which allowed customers to make regular payments on the balance owed rather than having to pay off the entire balance at one time. Bankcard Associations began in 1965 when Bank of America formed licensing agreements with other banks. This enabled them to issue a BankAmericard and interchange transactions among participating banks. By 1966, fourteen banks formed an association call Interlink with the ability to exchange information on BankAmericard transactions. In 1967, four California banks formed the Western States Bankcard Association and introduced the MasterCharge program to compete with the BankAmericard program. As the


credit card industry grew, banks interested in issuing bank cards became members of one of these associations and issued either BankAmericard or MasterCharge. The members shared card program costs, making the bankcard program available to even small financial institutions. BankAmericard and MasterCharge developed rules and standardized procedures for handling the paper flow in order to reduce fraud and misuse of cards. The two associations also created international processing systems to handle the exchange of funds and information and established an arbitration procedure to settle disputes between members. In 1977, BankAmericard became VISA, and in 1979, MasterCharge changed its name to MasterCard. Both VISA and MasterCard are publicly traded organizations who set and maintain the rules for processing. Board members are mostly high-level executives from their member financial institutions. As credit card processing became more complicated, outside service companies began to sell processing services to VISA and MasterCard association members. This reduced the cost of programs for both Issuing Banks and Acquirers and increased the size of the bankcard industry. You are now at the start of entering into the world of the bankcard industry!!


SECTION 2

Bankcard 101


Types of Cards Since the inception of credit cards, many different types of cards have been added. There are now Consumer Cards, Corporate Cards, Check Cards, Stored Value Cards, and a variety of other payment methods that are accepted as alternate forms of payment to cash. Let’s begin with the 2 basic references to card types: Bankcard and Non-Bankcard. We will go into more detail on each one later on. A Bankcard:

• Is issued by a financial institution and will have that bank’s name on the card • Allows purchases or cash advances to be taken from the cardholder’s available funds without having to

write a check. • Allows a balance to be carried over from month to month. The issuing bank assesses the cardholder an

interest charge on the unpaid balance to offset the cost of carrying a balance. • Typically refers to all Visa and MasterCard products.

A Non-Bankcard:

• Is not issued by a standard financial institution • May require that the balance be paid in full each month. Some non-bankcards, such as American

Express, have various types of cards that may allow balances to be carried over from month to month. • Is sometimes referred to as a “T&E” card (Travel and Entertainment) because of its original focus on the

business traveler and use at hotels, restaurants, airlines, and car rental agencies. The major brands of cards that are currently accepted at most retailers are: VISA Visa cards, a product of Visa USA, are distributed by financial institutions around the world. A Visa cardholder is issued a card that is tied to a line of credit at a bank. The bank charges interest on any percentage of the balance that is unpaid each month. The issuer may assess other monthly or annual fees for use of the card. Visa account numbers always begin with the number “4” and are 16 digits in length. The digits are divided into sets of 4-4-4-4. The first six digits of the account number are the Bank Identification Number (BIN) that identifies the specific bank that issued the card. MASTERCARD MasterCard, a product of MasterCard International, is also distributed by financial institutions around the world. Like VISA, a MasterCard cardholder borrows money against a credit line and repays those funds with interest if the balance is carried over from month to month. A MasterCard account always begins with the number “5” and has 16 digits divided into sets of 4-4-4-4. MasterCard also uses the first 6 digits as the Bank Identification Number (BIN) and also has a 4 digit number that usually appears just under the embossed numbers that represent the Interchange Card Association (ICA). AMERICAN EXPRESS The original American Express cards were intended for T&E (Travel and Entertainment) use and were predominantly used by companies for business purposes. They were considered to be a charge card meaning that the balance was to be paid in full each month. American Express allowed for large purchases to be split into


monthly payments through their Extended Payment program. In the 1990’s, American Express began offering the Optima Card as a true credit card issued by their own Centurion Bank who also held the receivables. Since American Express issues their own card, through their own bank, they are not considered to be a true bankcard. In recent years, American Express won a lawsuit against MasterCard and Visa that allowed American Express to join with standard financial institutions to issue cards to that bank’s customer base. The accounts issued by American Express always begin with the numbers “34” or “37”, and contain 15 digits that are divided into sets of 4-6-5. DISCOVER Discover began as a division of Sears, Roebuck and Co. In 1995, NOVUS Financial Services bought part of Discover and it became Discover/NOVUS. In the spring of 2000, the company again changed its name and signage to Discover Financial Services. Additionally, in 2008, Discover released their Full Acquiring Program to Acquirers which allows Discover rates and fees to be set by the Acquirer and full settlement to be done by the Processors. Discover allows a balance to be carried from month to month against an established line of credit. Interest, monthly, and annual fees may be charged to the cardholder. It is not considered to be a bankcard because it is not issued by a standard financial institution. Instead, the receivables are held by Greenwood Trust, a wholly owned subsidiary of Discover Financial Services. One of the earliest promotions of the Discover card was the use of a cash back incentive to the cardholder on a percentage of the amount spent. Discover accounts always begin with the number “6011” and contain 16 digits that are divided into sets of 4-4-4-4. DINERS CLUB/CARTE BLANCHE In April, 2004, MasterCard acquired all Diner Club cards issued in the United States and Canada. These cards are being reissued with standard MasterCard numbering with 16 digits and card ranges 510000 to 590000. These cards will appear with both the Diners Club and MasterCard logo on the front. Any merchant accepting MasterCard will be able to accept these cards with no special processing. Diners Club cards issued outside the U.S. or Canada will continue with continue to begin with “36” and have 14 digits. When these cards are accepted at a merchant location within the U.S. or Canada they will be processed as MasterCards. Merchants outside the U.S. or Canada must have Diners Club acceptance. JAPANESE CREDIT BANK (JCB) JCB is a credit card issued in Japan. Its use has become more widely accepted in the United States in recent years due to the growing number of Japanese business people who work and travel in the U.S. It is most commonly seen in T&E businesses (hotels, restaurants, etc) or in areas with a higher concentration of Asian users. JCB card numbers begin with “18” or “21” and are arranged in sets of 4-4-4-4


OTHER CARD TYPES

• Private Label Cards – A private label card is issued by a retail outlet and contains the logo of that retailer. Only the retailer who issued the card accepts it for payment. A bank or card-issuing management company with which the retail store has partnered holds the receivables for the Private Label cards. Examples of this type of card are department stores such as Macy’s or Nordstrom’s, or gasoline companies such as Shell or Amoco/BP.

• Co-Branded Cards – In recent years it has become more and more popular for retailers to join with the

various card issuers to issue co-branded cards; cards that have both the retailers name and the card association. For instance, instead of having a private label Macy’s card, useable only at Macy’s, you can now get a Macy’s Visa card. Or, a Shell MasterCard. These cards can be used at those specific retailers or anywhere a Visa or MasterCard is accepted. Co-branding encourages the use of the card at the retailer whose name is on the card. Who would think of shopping at Neiman-Marcus and using a Macy’s Visa card?

• Affinity Cards – An Affinity Card is a MasterCard or Visa designed for groups with a common interest

or relationship. Groups such as alumni associations, fraternal orders, professional organizations, etc., may offer their members the opportunity to obtain a card with the group’s logo on it. Sometimes, a percentage of the purchases made on the cards is given back to the group that sponsors it. An example of an affinity card is the Major League Baseball team cards issued by MasterCard.

• Rewards Cards – Initially rewards cards were tied to “points” or incentives earned to be redeemed by

or for a certain retailer’s product or service. The American Express Delta card gave the cardholder frequent flier miles based on the amount spent on the card for purchases at any retailer who accepted American Express. MasterCard and Visa have offered cards in conjunction with various hotels that provided points to be redeemed for free stay at that hotel. In 2004, Visa and MasterCard aggressively redefined their Rewards programs so that the incentives are not limited to a specific retailer or service but can be redeemed through the issuer for a variety of products, services, and even credit towards outstanding balances.

• Corporate Cards – A corporate card is issued in the name of a business for use by its employees. The

card will have both the name of the company and the user embossed on the front. Depending on the preference of the company, the employee/user or the company may be responsible for the activity and payment of the card.

Corporate cards also include a category referred to as Purchasing Cards. Purchasing Cards can be set up so that they are accepted only at certain types of businesses, allowing the company to have control over how the cards are used by employees. For instance, a Purchasing card may be set up to allow use at an office supply store but not at a hair salon. Additional information is required at the point of sale and is provided to the corporation on their statements. The advantage of a Purchasing Card over a regular Corporate Card is this additional reporting capability and the ability to control the use of the card.

• Smart/Chip Cards – Recent technology of cards advanced from having the magnetic stripe on cards

containing the card data to a computer chip embedded in the plastic. When read by a special terminal designed to interact with the chip, the card can perform a number of functions or access data stored in the chip. These cards can be used as a cash card or as credit cards with a preset spending limit. Chip cards are widely used by colleges, universities, and large corporations who issue them to be used for identification, access to facilities, purchases at bookstores and cafeterias, etc. Because of the special


reader required in the terminal, chip cards have been somewhat slowly accepted in the standard retail market.

• Contactless/Tap Cards – The latest advancement in credit card technology includes cards with

microscopic transmitters embedded in the card. Special terminals that have microscopic antennae or receivers are able to “read” the card data when the card is held within a short distance range. This technology allows for greater speed and security of the transaction since the card does not have to leave the hands of the cardholder and does not have to be fully inserted into a point of sale device. Acceptance of these cards is currently being tested in various markets across the U.S. and predominately focuses on fast food, movie theatres, and toll road environments. As part of the pilot, Chase Bank is issuing their “Blink” cards in 5 major U.S. cities.

• Electronic Gift/Cash Cards – Electronic gift cards allow a merchant to sell cards redeemable for store

merchandise or services. These cards not only enhance the merchant’s cash flow, but also increase customer awareness and loyalty. Electronic gift cards were designed to replace existing paper certificates while reducing costs and increasing sales. Most cards are purchased for a specific value, loaded and activated by the merchant at the time of purchase. This reduces the merchant’s exposure to having paper certificates stolen or replicated. In addition, once used, the cards can typically have additional value added on to the same card allowing multiple use of the plastic.

DEBIT CARDS Debit cards allow a purchase amount to be deducted directly from the Cardholder’s checking or savings account. Therefore, the availability of funds are determined by the balance in that account. There are two types of Debit Cards: ATM Cards are issued to customers of a financial institution for access to their account at an Automatic Teller Machine. A true ATM card does not have to have the MasterCard or VISA logo on it but will have the name or logo of the financial institution and one of the ATM Networks (Cirrus or Plus) and one of the Debit Networks (Maestro or Interlink). ATM cards can be used to do the following:

• Withdraw cash from checking or savings accounts • Make deposits to checking or savings accounts • Get balance information on accounts • Make purchases at merchant locations who subscribe to one of the same debit networks indicated on the

card as pin-based transactions (more about that later in this section) Check Cards are issued to the customers of a financial institution and in addition to having the Bank logo, ATM Network, and Debit Network logo will also have a MasterCard or VISA logo on the front. It can be issued in addition to or instead of an ATM card. A Check Card allows the customer to all of the functions previously listed for an ATM card and also allows the card to be used by any merchant who accepts MasterCard or VISA. Check cards can be used at a merchants location in one of two ways:

• On-line or Pin-Based transactions require the use of a pin pad in conjuction with a point of sale device. The pin pad allows the cardholder to enter their 4 digit PIN (Personal Identification Number) as the indication that they are the authorized user of the card. The transaction is processed through either a regional or national debit network. The funds are directly debited (usually on a real-time basis) from the cardholder’s checking or savings account and the merchant is charged the appropriate transaction fee.


Again, no signature is required from the Cardholder but the card must be swiped through a magnetic stripe reader.

• Off-line or Signature Based transactions occur through a standard point of sale device at the merchant’s location. The Cardholder must sign the sales draft indicating authorized use of the card. The transaction will be processed through the MasterCard or VISA networks the same as a standard credit card. The funds will be directly debited (usually within 24-72 hours) from the cardholder’s account. The merchant will pay the applicable discount rate as would be charged on a credit card transaction. Signature based check card issuance and usage has grown at tremendous rates over the past 5 years.

To accept a “check card”, the merchant must:

• Accept the same regional or national debit network that appears on the card and/or accept MasterCard or VISA

• Have a Pin Pad device facing the cardholder to allow for the entry of a PIN number of the customer wishes to use the card as a Pin-Based (on-line) transaction

• Have an electronic printer to produce a receipt

The Players Now that you know the card types that merchants accept it’s time to know who is involved and what role they play in the process of getting that payment from the point of sale to the merchant’s checking account. The Associations MasterCard and VISA are publicly traded organizations whose board is composed of member financial institutions. They provide the branding and network to the Issuing Banks. MasterCard and VISA set and enforce rules and regulations governing their bankcard, such as operational procedures, Interchange rates and qualification requirements, and the base networks through which all transactions are approved and settled. They create advertising and promotional programs to support their brands and develop new products to serve banks and consumers. The Issuing Bank The Issuing Bank is the bank that provides the card to the consumer (cardholder). An Issuing Bank is a licensed member of MasterCard and/or VISA and can also be an Acquirer (defined later). The Issuing Bank solicits, screens, and approves the Cardholder for a specified credit limit. When the Cardholder uses the card, the Issuing Bank approves or declines the sale, bills the Cardholder for charges made to the card, and collects the payments from the Cardholder each month. The Cardholder The Cardholder uses the credit card given by the Issuing Bank to purchase goods and services or to obtain cash advances. The Cardholder is expected to sign the back of the card and limit its use to only authorized users, stay within the assigned credit limit, and pay the Issuing Bank all or a minimum amount of the balance by the due date indicated on each monthly statement.


The Merchant The Merchant provides goods and/or services to consumers and businesses. MasterCard and VISA require that the merchant be financially responsible and of good repute and adhere to all rules and regulations set forth by the Associations in regards to accepting their cards. PDX Enterprise Solutions requires that the merchant adhere to the Merchant Processing Agreement (contract) signed with PDX. The merchant is required to complete a Merchant Application providing information about the ownership, type of business, and method of conducting business. The merchant will also be provided with documents that detail the rates and fees to be paid in conjunction with the merchant account. The Sales Agent The Sales Agent is the person who originally presents the Agreement and pricing to the merchant. The Sales Agent may also sell or lease/rent processing equipment or software to the merchant. Merchant accounts may be sold by employees of the Member bank, a registered Agent bank, a registered ISO (Independent Sales Organization) or MSP (Member Service Provider) on an Independent Contractor working for any of these above. The Sales Agent must always present him/herself to the merchant showing the relationship to the Member bank and not as an employee of MasterCard, VISA or the Member bank. The Processor or Acquirer In order to facilitate the transactions between the Merchant and the Cardholder, a Processor or Acquirer is required. The Processor may also be referred to as the Back End Processor or Merchant Accounting System. They provide the payment link between all of the parties involved in the transaction process. Many Processors or Acquirers also provide back-office functions such as:

• Customer Service • Chargeback support • Risk Management and Security of card data • Terminal or PC Software to be used at the Point of Sale (POS)

The Member Bank MasterCard and VISA require that the Financial Institution behind the merchant accounts be a primary Member of each Association. All of the payment of transactions to the merchant must originate from the Member bank. The Member bank also acts as the Sponsor Bank to any Agent Bank, or ISO/MSP relationships. While all of the parties mentioned above are required in the transaction process there are other parties that may be involved. These may include:

• An Independent Sales Organization (ISO)/Member Service Provider (MSP) - MasterCard, Visa, and many banks have realized that allowing third parties to sell and/or provide different services will increase the exposure of their product. ISO is the term used by Visa and MSP is the term used by MasterCard. They are, in essence, the same thing but must be registered with each Association through a Sponsor Bank. PDX ENTERPRISE SOLUTIONS is a registered ISO/MSP with BancorpSouth Bank, Tupelo, MS.

• The Front End Network – this is the network that carries the transaction to and from the POS terminal. The Front End Network, or Front End Processor, will “auth and capture” the transaction data.

• The Voice Authorization Center – each Front End Network will provide an 800 number service for the merchant to call in the event that the POS terminal is not functioning or the response to call for voice authorization is given.


• The Depository Bank – each merchant must have a checking account or Demand Deposit Account (DDA) to receive electronic credits and debits for deposits and fees.

THE TRANSACTION PROCESS Each time a credit or debit card is used there are several processes that must be accomplished to complete the transaction. These processes involve each of the players that were previously described. The three processes are Authorization, Settlement, and Billing. We will walk through the flow of each of these in the order in which they occur. The Authorization Process

The Authorization is the permission of the Issuing Bank to accept a card for payment. Obtaining the Authorization on a card does not guarantee payment or that a chargeback may not be initiated at some later point Step 1. The transaction begins when the cardholder purchases goods or services using a credit card. The merchant must obtain an approval code from the Issuing Bank that acknowledges that the card is a valid card and the amount of funds requested are available from the cardholder’s line of credit.

Step 2. Front end Network routes transaction to VISA or MC. Step 3. Association determines Issuer and routes to that Bank or Processor

Step 4. Transaction is approved or declined and passed back to Association to return to Front End Network

Step 1. Merchant enters card date to begin transaction. Step 5. Front End Network returns response to Merchant’s POS terminal


The transaction can be done as a Card Present or Card not Present transaction,

• A Card Present transaction begins when the cardholder is face to face with the merchant and presents the card for payment. The card is then swiped through the reader on the terminal or PC that will read the data encoded in the magnetic stripe on the back of the card. That stripe includes the card number, card verification data, and other identifying information. In the event that the magnetic stripe on the card is damaged or the terminal reader is not able to read the data, the merchant must make a physical imprint of the card to prove that it was present at the time of the transaction. The card number and expiration date can be keyed into the terminal manually to obtain the authorization.

• A Card not Present transaction is typically initiated by the cardholder via telephone order, mail order, or Internet. Neither the cardholder nor the card is present at the merchant’s establishment. Because the identifying data on the magnetic stripe cannot be used to validate the user, the POS terminal may prompt the merchant to enter in additional information for AVS (Address Verification Service) or CVV (Cardholder Verification Value). AVS verifies the street number or zip code entered by the merchant with what the Issuer has on file as the cardholder’s billing address. CVV verifies the 3 or 4 digit number printed on the signature panel on the back of the card at the end of the account number.

While AVS or CVV are not required when the card is not present, doing both of these provide benefits to the merchant through reduced Discount rates and chargeback protection. We’ll discuss how AVS helps to reduce the fees paid by the merchant in the Interchange Section.

Step 2. The POS terminal sends the transaction information through the Front End Network to a Host computer that will verify the Merchant Identification number (MID), determine from the card number what type of card, and route the message so that it gets to the correct Card Association, i.e. MasterCard, Visa, Discover, etc. Step 3. Once connected with the correct Association, the transaction is routed to the proper Issuing Bank or their designated stand in processor for the authorization. The Issuer determines whether the credit card transaction can be approved or declined. The Issuer will send back one of the following responses:

• Approval Code – this response indicates that the card is valid and has sufficient funds available to complete the sale. The approval code is recorded on the sales draft. An approval code is not a guarantee of payment.

• Decline – this response indicates that the Issuer will not approve the transaction. There could be many reasons for a decline – the charge may exceed the credit limit, payments are past due on the card – but the reason is not displayed or known to the merchant. The merchant should ask the cardholder for another form of payment. The cardholder should be instructed to contact their bank for specific information regarding the account.

• Pick up Card – this response is given when the Issuer wants the card returned for some reason. The merchant is not required to retain the card – it should only be kept if it can be done so safely. The cardholder should be instructed to contact their bank for specific information regarding the account. If the merchant does keep the card there is generally a reward. The card should be cut lengthwise across the magnetic stripe and sent to the Security Dept of their Processor.

• Referral or Call Auth Center – this response indicates that communication other than just an electronic approval is required. The merchant should call the number given by the Processor for voice authorizations. The Operator may ask for additional information regarding the transaction or the cardholder. An approval code or decline will be given by the Operator. If the transaction is approved, it will need to be re-keyed into the POS terminal to be included with the batch.


Step 4. When the transaction, with the Issuer response, is passed back through the Association, a “snapshot” of that transaction is taken. This is important for the purpose of qualifying the transaction later for the proper Interchange category which in turn affects the merchant’s discount rate and fees paid on that transaction. The Association routes the transaction back to the Front End Network who may also store the transaction data to be used during the settlement process, Step 5. The Front End Network returns the transaction, including the response code and a reference number, to the merchant’s POS terminal. If the merchant has an electronic printer a receipt will print with all of the transaction data and a place for the cardholder’s signature. If a manual imprinter is used the approval code should be included on the sales draft. In a Card not Present environment, a transaction receipt or sales draft may not be produced but all of the transaction data must be retained by the merchant. Remember, obtaining the Authorization on a card does not guarantee payment or that a chargeback may not be initiated at some later point. This entire process usually takes less than 10 seconds, depending on the Front End Network and POS terminal used by the merchant. In order for the merchant to receive payment on these transactions, he/she must now “settle the batch” or “batch out”. That’s our next section.

The Settlement Process We just learned that the Authorization process is done to verify the card data and availability of funds. Now, the Settlement process will route those transactions through two processes; 1) send a credit to the merchant’s DDA and 2) bill the cardholder for that transaction.

The first part of the process involves paying the merchant for the transactions:


Step 1. The merchant’s POS terminal and Processor has stored all of the transactions the merchant has done since the last settlement. Those transactions are called a batch. Depending on the POS terminal and software application closing or settling the batch may be initiated manually by the merchant or automatically by the POS terminal. Step 2. The batch is transmitted to the Front End Network host computer who creates a file containing the merchant’s MID, all card data, transaction data, authorization responses, and the total amount in that batch. Step 3. That file is sent to the Back End System, sometimes referred to as the Merchant Accounting System. This system contains a master file on the merchant with information such as the discount rate and fees that the merchant will pay, the address and type of business of the merchant, and the designated checking account information to credit the deposits of transactions and debit the fees owed. The Merchant Accounting System also creates the merchants statement each month. Step 4. The Back End System will create an ACH file that is sent through the Automated Clearing House system that all financial institutions are a member of. The ABA (American Banking Association) number, sometimes referred to as the RT (Routing Transit) number is what identifies the specific bank. This is how the funds get credited or debited from the merchant’s checking account. Step 5. The merchant’s bank will post the credit or debit amount to the checking account. These funds are typically posted to the merchant’s designated account within 2 banking days from the date that the batch was settled. The merchant is given credit for the full batch amount and the discount rate and fees are debited monthly. Exceptions to the funding time period and the payment of fees may occur in special merchant circumstances. The second part of the settlement process occurs between the Back End System and the Issuing Bank to charge the cardholder. Step 1. The Back End System, or Merchant Accounting System, will prepare a file to submit to each Association (VISA, MasterCard, Discover, etc.) to be process through their Interchange systems. Step 2. Each Association has different requirements of a transaction that will determine the Interchange category and cost of the transaction. This Interchange cost is deducted from the amount of the transaction. During the Interchange process, the transaction data that the Association recorded during the Authorization process is compared to and combined with the data sent in the Settlement file. A single file is then prepared to submit to each Issuing Bank with the transactions on their cardholder accounts. Step 3. The Issuing Bank posts the transactions to each cardholder’s account. The cardholder typically sees a transaction posted 2 banking days after the merchant settled the batch. This overall settlement process follows the basic accounting rule that for every credit there must be an offsetting debit, or visa versa. In this case, each time the cardholder uses a card for a purchase, it results in a credit to the merchant’s account and a debit to the cardholder’s line of credit.

The Billing Process We have just completed how a transaction begins with the merchant and the cardholder, receives an approval from the Issuer, and is then processed by the various systems to ultimately pay the merchant and charge the cardholder. There are additional processes that also occur by both the Acquirer/Processor and the Issuer that involves billing the merchant and the cardholder for fees associated with the use of the card.


Merchant Billing is generally done monthly after a designated cycle or time period. Most Merchant Accounting Systems will run their cycle on a calendar month. Each merchant is quoted a Discount Rate or a percentage of each transaction. This rate typically ranges from 1.50% to 5% of the transaction. The Discount Rate is designed to cover the cost of Interchange, Association fees, processor fees, and other fees incurred for handling a transaction. The Discount Rate can vary based on merchant type, the Interchange category and cost that the transaction cleared at, or other factors in processing the transaction. We will discuss more about Discount Rates and Interchange costs later. Merchants may also be billed for various other fees such as authorization expenses, statement fees, monthly fees, or debit transaction fees. Monthly minimums are usually billed to a merchant only when the Discount fees are less than the quoted minimum. The merchant will receive a monthly statement which has a summary of activity (batches, authorizations, etc.) and shows the discount rate calculations and other fees charged. The total fees owed by the merchant are debited from the merchant’s designated checking account. Since the Acquirer/Processor has incurred expenses all month long in processing for the merchant, there is a certain amount of risk taken by the Acquirer/Processor that the funds for the merchant billing will not be available at the time of debit. In some situations, the Discount Fees may be calculated and deducted daily on a merchant’s account. Likewise, the Cardholder Billing is done monthly by the Issuing Bank. Cardholders are charged an Interest Rate or percentage of the outstanding balance on their account. These rates are typically based on the Prime Rate set by the Federal Reserve plus other fees associated with the card. Many Issuers may have promotional rates that are less than 5% but may charge upwards of 20% interest on others. In addition to the interest owed on the outstanding balance, most Issuers also require a Minimum Payment, usually 2%-4% of the outstanding balance. The cardholder statement will show all transactions that posted during that cycle, the Finance Charge (interest owed), and the minimum amount of payment required to keep the card in good standing. Some Issuers may also charge fees for late payments, over the limit fees, or even fees for paying the balance in full each month. Annual fees are also very prevalent among card Issuers. In addition to the fees that are paid by the cardholder to the Issuer, the Issuer also receives the Interchange fee that was charged on each transaction. Remember Step 2 of the second part of the settlement process? When the transaction was sent through the Association Interchange process the cost of Interchange was determined and debited from the amount of the transaction. This Interchange fee is paid to the Issuer and deducted from the amount settled back to the Merchant Accounting System. For instance, the original transaction amount was $72.00. The Interchange cost was $1.25. The Merchant Accounting system only received $70.75 credited back while the Issuer received the full debit of $72.00 (to be posted to the cardholder) plus the $1.25 in Interchange. The Acquirer/Process then receives the Discount rate from the merchant at the end of the month to recoup the $1.25. We will discuss how to establish merchant Discount rates and fees in a later section.


SECTION 3

Pricing


Interchange

Interchange is the clearing and settlement system where transaction data is exchanged between the credit card Acquirer/Processor and the Issuer. Interchange sends transactions that occur at the merchant level to the appropriate bank for posting to the cardholder account, sends funds to the appropriate Acquirer for payment to the merchant, and assigns a qualification level for each transaction. The qualification level determines what rate the merchant will pay for the transaction. This Interchange level, or category, and its cost is at the very base of determining the merchant’s Discount Rate. Qualification Levels Think of the Interchange levels, or categories, as rungs on a ladder. There are over 100 different Interchange categories identified by MasterCard and VISA. Each category requires certain transaction data and criteria based on the type of merchant and their method of doing business. In some cases, it is not the type of merchant that determines the requirements but the type of card being used. The higher the transaction climbs on the ladder (more transaction data) the lower the Interchange cost. These 100+ Interchange categories are typically grouped into four tiers referred to as Offline Debit, Qualified, Mid-Qualified, and Non-Qualified. Offline Debit – the transaction was a debit/check card. The cardholders Personal Identification Number (PIN) was not entered during the transaction. Qualified – indicates the transaction has met all of the requirements for the best possible category for the merchant’s industry and or a card type. The merchant will pay the lowest Interchange, or best Discount rate, on the transaction. Mid-Qualified – the transaction has met some but not all of the specific requirements for the merchant’s industry and/or card type. The merchant will pay a higher Discount rate for the transaction. Non-Qualified – the transaction has not met any of the data specific requirements and the merchant will pay the highest Discount rate quoted. So, how does MasterCard and VISA know the merchant’s Industry type? And just what are these different requirements? Let’s find out.

Merchant Industries Over the years, the bankcard industry has identified 4 main industry types based on the way those merchants conduct business. The industry in which the merchant operates determines the transaction data requirements that must be met.

• Retail • Restaurant • Lodging/Car Rental • Mail, Telephone, Internet

Here is a brief overview of the assumptions and requirements that have been set:


• Retail – the card and the cardholder is present at the time of the transaction. The complete magnetic stripe data is read by the POS terminal and a signature is obtained. The original authorization amount matches the final settled amount. The batch must be settled within one day of the authorization date.

• Restaurant – the card and the cardholder is present at the time of the transaction. The complete magnetic stripe data is ready by the POS terminal and a signature is obtained. A variance for tip adjustment is allowed between the original authorization amount and the final settled amount. The batch must be settled within one day of the authorization date.

• Lodging/Car Rental – the card may or may not be present. Cardholder’s signature is obtained on sales draft or registration/rental agreement. Incremental authorizations are permitted as long as the original authorization request includes the duration of the stay/rental. The final settled amount must be within 15% of the last authorization amount and the batch must be settled within 1 day of the checkout date. The check in/check out date and the folio/contract number are included in the settled transaction.

• Mail, Telephone, or Internet – neither card nor cardholder is present. The authorization request should include an AVS (Address Verification) request. The authorization date must be within 7 days of the transaction/shipping date. One authorization adjustment is allowed. The merchant’s customer service phone number, and order or invoice number, and the final transaction amount must be included in the settlement transaction. The batch must be settled within 1 day of the transaction/shipping date.

The requirements for each industry are designed primarily to combat credit card fraud and protect both the cardholder and the merchant. The more information transmitted with each transaction, the more assurance the Issuer has that the authorized user of the card is participating in the transaction. The more assurance, the lower the Interchange cost. MasterCard and VISA have recognized different Industry Types as being “new” in the card payment world. Special Interchange categories, rates, and requirements have been developed to specific industries to encourage the acceptance of cards. Some examples of these special programs are:

• Supermarket – requires certification from MasterCard and VISA, a special SIC/MCC code and an “S” code to be transmitted with the authorization and settlement.

• Quick Payment Service – requires certification from MasterCard, a special SIC/MCC, and a “Q” code to be transmitted with the authorization and settlement.

• Automated Fuel Dispenser (AFD) – requires magnetic stripe to be read but no cardholder signature and a special SIC/MCC code.

• Emerging Markets – includes Insurance companies, Cable TV providers, Schools and Government (VISA) and Insurance companies, Cable TV, and Telecommunications (MasterCard). Transactions must have an “R” code and have a Recurring Payment Indicator with the authorization and settlement.

• Utilities – includes electricity, natural gas, water, and sanitation. Must have a special SIC/MCC code, an MVV code from VISA, an “R” code from MasterCard transmitted with the authorization and settlement.

A more detailed listing of the Interchange categories, rates, and general requirements is included in your training material. Forms for registration with MasterCard or VISA for any special programs are available from PDX ENTERPRISE SOLUTIONS.

SIC/MCC Codes In order for Visa and MasterCard to determine the industry type, codes have been developed and are assigned to each merchant. VISA calls them Standard Industry Codes (SIC) and MasterCard refers to them as Merchant Category Codes (MCC). These codes are 4 digit numbers that are part of the transaction data. Each code identifies not only the Industry Type but the specific type of merchant business. For example, code 5251 indicates a Retail Hardware store while code 5661 indicates a Retail Shoe store.


Each merchant will be assigned the appropriate SIC/MCC code based on the information provided in the merchant application. The SIC/MCC code is included with the transaction data at the time of authorization and settlement.

Card Types In recent years, MasterCard and VISA have developed different Interchange rates and/or requirements for credit cards versus check cards and consumer cards versus corporate cards. Credit cards and check cards typically have the same transaction data requirements but have very different Interchange rates. Consumer cards are now divided into Classic cards and Rewards cards. Rewards cards carry certain benefits and perks for the cardholder and carry higher Interchange rates for the merchant. No additional data is required. The transaction will be automatically be assigned a higher Interchange rate based on the identification of the Rewards card by the first 6 digits of the card. Corporate cards typically require some additional data regarding the transaction. Both MasterCard and Visa have developed 3 levels of data required:

• Level One – merchant street address, state, zip code, and federal tax ID must be passed with the settlement transaction. This is typically done by the Processor with no additional data entered by the merchant at the time of the transaction.

• Level Two – includes all of the information in Level One plus the sales tax amount and the customer code (assigned to the cardholder). This information must be entered by the merchant at the time of the transaction.

• Level Three – includes all of the information in Levels One and Two plus a detail of the items purchased. This information must be entered by the merchant at the time of the transaction and usually requires that the merchant have special PC software.

As previously stated, the Interchange cost makes up the largest part of the merchant’s Discount rate. Now that we have some understanding of what affects the Interchange cost and what those rates are, let’s see how we apply this to determine the Discount rate and other fees that the merchant will pay.

Merchant Pricing Discount Rates Merchants pay fees for the processing services provided. These fees are debited from the merchant’s checking account and appear on the merchant’s monthly statement. The primary fee is referred to as the Discount Rate. The rate is agreed upon before a Merchant Agreement is signed. These rates are designed to cover the basic costs of processing the transaction such as Interchange, authorization or network fees, processor fees, and, of course, a profit for the Sales Agent. Discount rates are assigned as percentages, also referred to as Basis Points. A basis point is one hundredth of a percent. For example, the percentage is shown as 1.75%. In basis points this would be shown as .0175. In learning to calculate discount rates it is important to know how to calculate dollars into basis points and basis points into dollars. We have already seen that Interchange costs include both basis points and cents. MasterCard and VISA also have Assessments in the form of basis points that are calculated on each sales transaction. PDX Enterprise Solutions has other Processing Costs that are applied as cents per item. All of these together are sometimes referred to as the Buy Rate. Once all of these items are known, it is possible to determine the Effective Rate


for any transaction. Think of the effective rate as the wholesale price. Here’s a sample calculation on a VISA CPS Retail transaction: Basis Points Cents Interchange 1.54% $.10 Assessments 0.0925% $.02 PDX Processing Fee 0.035% $.07 Effective Rate 1.6675% + $.19 From here the Sales Agent can determine how much profit is to be added to the Effective Rate to become the Discount Rate quoted to the merchant. For example, a Discount Rate of 1.89% plus $.25 per transaction may be quoted to the merchant. Think of the Discount Rate as the retail price. These calculations are for demonstration purposes only. Converting Basis Point and Dollars To be able to understand how much the Discount rate is going to cost a merchant or how much profit will be made by the Sales Agent, the basis points and dollars must be inter-changeable. To be able to do this, you must know the sales volume of the merchant (usually quoted on a monthly basis), the number of transactions, and the average ticket (or average transaction amount). If the monthly volume and average ticket is known, you can determine the number of transactions by dividing the volume by average ticket. If the monthly volume and number of transactions is known, you can determine the average ticket by dividing the volume by number of transactions. Basis points can be converted into dollars by multiplying the average ticket by the discount rate percentage. Dollars can be converted into basis points by dividing the per transaction fee by the average ticket. Let’s say the merchant has a monthly sales volume of $7500.00 and an average ticket of $67.00. From that we can determine that the number of transactions will be approximately 112 per month. Based on the example above, the merchant will be paying 1.89% plus $.25 per transaction. How much is the Discount rate going to cost the merchant per transaction? $67.00 x 1.89% (or .0189) = $1.2663 or $1.27 Added to the $.25 transaction fee, the merchant will pay approximately $1.52 for that $67.00 transaction. The other side of that would be to convert the $.25 transaction fee into basis points. $.25 / $67.00 = .003731 (or .37%) Added to the 1.89% rate, the merchant will pay approximately 2.26% for that $67.00 transaction. Based on the monthly volume, the merchant would pay would be approximately $170.00 in discount. Variances are due to rounding. $7500.00 x 2.26% = $169.50 or $1.52 x 112 transactions = $170.24


Now that we know the cost per transaction in both basis points and dollars, we can calculate the profit or Residual that the Sales Agent would see. We had said that the Effective Rate was 1.6675% plus $.19 per transaction. Here’s the conversion: $67.00 x 1.6675% (or .016675) = $1.117225 or $1.11 Added to the $.19 transaction fee, the effective rate is $1.32 for that $67.00 transaction. Since the retail price is $1.52 and the wholesale price is $1.32, the residual made on that transaction would be approximately $.20. Or, we can convert that effective rate to basis points. $.20 / $67.00 = .002985 (or .30%) Added to the 1.6675%, the effective rate is 1.98%. Since the retail rate was 2.26% and the wholesale rate is 1.98%, the residual made on that account would be approximately .28%. How does that look over a monthly time frame? The Sales Agents residual would be approximately $23.00 per month. $7500 x .28% = $21.00 or $.19 x 112 transactions = $21.28 Continue playing with variations of the Interchange cost. What would the effective rate be on a MasterCard Merit III check card transaction? How about an Internet merchant using a Visa card? The attached General Requirements sheets in your training material will give you an idea of the requirements of each Interchange category. Keep these in mind when talking with your merchant about his/her type of business and method of doing business, what types of cards will be accepted, and other factors. The Tiered Discount Grid chart shows the various industry types and where each Interchange Category falls as an Offline Debit, Qualified, Mid-Qualified, or Non-Qualified transaction. PDX ENTERPRISE SOLUTIONS has developed a “calculator” that will help you determine the effective rate and estimate your monthly and annual profit on an account. There are various assumptions that can be changed to reflect the percentage of credit versus check cards or rewards cards, the industry type, and your buy rate. PDX Enterprise Solutions Residual Program PDX Enterprise Solutions pays residual income each month. Residual is calculated based on all income (merchant billing) applied against expenses and revenue share as outlined in a commission plan. Residuals continue to be paid on existing merchants plus new merchants added. Payments continue as long as a Processing Agreement is in effect and there are active merchants in the portfolio. Here’s an example of how a portfolio and residual can grow. The average merchant processes $10,000.00 per month in bankcard volume. The average spread (profit margin) on a merchant of this size is approximately .50% (50 basis points). That equates to an average of $50.00 per merchant. Statistically, the higher the merchant volume is, the lower the average spread may become. A merchant processing $40,000.00 per month with a spread of .30% will yield a monthly residual of $120.00. PDX’s competitive pricing structure and low per item fees make high volume merchants attainable. For instance, a merchant processing $250,000.00 per month in bankcard volume at a spread of .15% will add $375.00 per month to the residual payment.


How quickly can a portfolio grow? The chart below shows estimated residual and portfolio growth based on adding 10 merchants per month, and using a mix of the various volumes and spreads referenced above.

6 merchants @ $10,000.00 per month with a .50% spread = $300.00

3 merchants @ $40,000.00 per month with a .30% spread = $360.00

1 merchant @ $250,000.00 per month with a .15% spread = $375.00

Active Merchants

1 mo 2 mo 3 mo 4 mo 5 mo 6 mo 7 mo 8 mo 9 mo 10 mo 11 mo 12 mo

120 $12,420 110 $11,385 100 $10,350 90 $9315 80 $8280 70 $7245 60 $6210 50 $5175 40 $4140 30 $3105 20 $2070 10 $1035

While this illustration includes assumptions, it represents a model of how residual based compensation programs can grow based on the sales efforts made. Actual results may vary based on merchant volumes and profit margin spreads.

Other Types of Fees Discount rates are the main source of income for a Sales Agent, but income is also generated in a variety of other ways, only some of which are listed below. Space to indicate these fees is on the merchant application. Verify with PDX ENTERPRISE SOLUTIONS before quoting any other fee types to make sure that the Merchant Accounting System can accommodate it. Annual Fee – Charged to some merchants once a year to offset regular expenses associated with maintenance of the account. Internet Monthly Fee – Charged for the access through a gateway when using Internet software/wesbite. Minimum Discount Fee – The minimum amount determined to be charged if the total of the merchant’s discount fees are less than the minimum applied. This is charged as an “either/or”, the merchant will pay the discount fees or the minimum whichever is the greater. Monthly Service Fee – A monthly service fee that can be a “generic” fee to cover costs that are not elsewhere defined. Per Transaction Fee – Charged on settled credit or check card transactions. NOTE: debit cards have a higher Interchange cost than credit cards. PIN Debit Authorization Fee – Charged on each authorization attempt on PIN-based debit transactions in addition to the Debit Network Pass Through.


PIN Debit Access Fee – Charged monthly for providing the merchant with PIN based Debit. Authorization Fee – Charged on each authorization attempt based on the method used. Batch Header Fee – Charged each time the merchant closes or settles a batch. Statement Fee – Charged monthly for providing the merchant statement. Set Up Fee or Training Fee – Charged as a one time fee on the first merchant statement.

Wireless Network Fee – Charged each month for the GPRS service used by mobile devices. PCI Fee – Charged monthly for the upkeep of security on the encrypted networks. Merchant MX Fee – Charge monthly to allow merchants online access to the Merchant MX website where they can access their merchant account activity. PDX Enterprise Solutions operates with honest & integrity and as a result we provide our clients with honest pricing. We discourage our agents from hiding fees, not disclosing fees or bundling rates. We highly recommend your educate your merchants on our industry. This keeps them happy and a long term customer.


SECTION 4

Introduction to Products


Product Choices Merchants may use various Point of Sale (POS) devices to process their credit card transactions. As in many of today’s technologies, there is hardware and software that is necessary. The merchant has the choice of using a terminal device or a PC. The software, or application, within the hardware is what defines the operational function. We have seen some of the different requirements that Visa and MasterCard require for different industry types. It is important that the application used by the merchant meets the needs for his/her business type. Software Formats There are 3 main types of software application formats: Terminal Based In a Terminal Based application, all transactions are captured and stored in the point of sale device, then transmitted to the processor when the merchant closes the batch. The POS device controls all of the functions, including the time and date and reporting capabilities. Transaction capacity is limited by the amount of memory available in the POS device. Because all of the transactions and data reside in the terminal, the merchant has a wide variety of reporting that can be run at the POS. Since all transactions reside in the POS device until the batch is closed, customer service is somewhat limited. The merchant is the only one that can create transactions or close the batch. Most PC softwares are terminal based. Host Based In a Host Based application, all transactions from the merchant’s POS device are captured and stored with the Front End Network host. The Host has the ability to control all functions of the device including changing the date and time or settings within the application. Transaction capacity is unlimited. Since the transactions are stored at the Host, reporting is usually limited to a summary of activity instead of detailed transactions. Any customer service provided by the Host has the ability to “see” each transaction that is done and help the merchant if needed. The batch is closed by the Host eliminating the need for the merchant to do so. Interactive Interactive applications provide a blend of Terminal and Host based features. Complete transaction data is stored at the Host and enough transaction data is passed back to the POS device to allow for more detailed reporting. Transaction capacity is generally higher than a Terminal based application but is limited by the device capacity. The transactions can be reviewed by the merchant or by customer service provided by the Host. In an Interactive application, the batch can be closed by the merchant or by the Host.

Communication Methods Dial up Connection When a POS device utilizes a standard telephone line to communicate this is referred to as Dial Up. POS devices utilizing dial up connections do not generally require a “dedicated” phone line. However, when the phone line is shared between the device, a telephone and fax machine, there may be delays in processing a transaction. A typical dial up connection takes about 9-15 seconds to process the transaction and provide a response back to the POS device. Most credit card terminals and standard PCs have dial up connection modems. Internet Connection When a POS device utilizes an Internet Service Provider (ISP) to communicate through the Front End Network, this is called an Internet Connection. You may see some materials refer to it as Ethernet or IP. A typical internet connection takes about 3-5 seconds to completely process a transaction. While some software and Front End


Networks are designed to operate via the Internet, the merchant may still have to dial out to make contact with the ISP. Most PCs and newer terminal hardware is designed for use with Internet connectivity. Wireless Connection Some merchants may operate their business where no phone line is available. Mobile merchants, such as pizza delivery, home repair, and limousine or taxi service must take cards on site. Merchants in temporary locations such as seasonal mall kiosks or stadium concession stands may not have access to a phone line. These merchants need a POS device that allows them to transmit transaction data through a wireless network similar to wireless phones. Because wireless communication methods may be faster than regular dial up, some merchants in fixed locations prefer this method. Processing time is generally about 6-10 seconds. Make sure that the “wireless” device is also wireless when it comes to power. Terminals that are designed to be mobile should also have battery power supplies. Various companies offer wireless communication and it is important to make sure that the wireless network has been certified by the Front End Network.

Closing Methods Depending on the software format and POS device, the merchant may have options regarding closing the batch and running reporting. Auto Close Auto close is generally offered only on a Host Based application where the Host has stored all of the transaction data and can batch those transactions at its own designated time. This method is used among smaller merchants who do not have a large number of transactions to verify before closing the batch. This method is very beneficial to making sure that all transactions are settled in the proper time frames for the best qualification level. Auto close cannot be used in any type of restaurant or hotel environment that may require the original transaction amount to be altered for tips or additional data elements. Merchants must remember to get any reporting from the POS device before starting a new batch. Manual Close This method puts the merchant completely in charge of getting reporting and closing the batch. The POS device will generally have a series of prompts to guide the merchant through reviewing the transactions, verifying the batch total, printing reports, then transmitting the batch. This method is popular with restaurants, hotels, or mail/telephone order merchants that want to verify that all data (tips, ancillary charges, shipping fees) have been added to the original transaction before the batch is settled. The merchant must remember to close the batch prior to the Host system settlement to ensure that transactions are processed in the best time frame for qualification. Terminal Auto Close Like an Interactive based application, Terminal Auto Close is a blending of Auto and Manual Closing. The internal clock in the POS device is pre-set to dial to the Host at a designated time to close the batch. Reporting is automatically generated and is waiting for the merchant before they start the next batch. Terminal Auto Close must be established as part of the functions during the building of the application or changed by the Host afterwards. Most newer terminals have this function available.

Wireless Processing 101 What is wireless processing? Wireless processing enables merchants to perform electronic point-of-sale (POS) transactions virtually anywhere, anytime using both point-of-sale terminals like the Lipman NURIT 8000 or mobile phone solutions like the CellTrek® Mobile Merchant application found in the Audiovox® SMT 5600 and the Motorola MPX 220™.


Wireless Technologies There are numerous wireless technologies available and all are often referred to as “wireless”.

• Mobile Wireless - this is by far the most widely used in the industry and is accomplished using mobile networks /technologies referred to as “GPRS”, “Motient”, “CDMA”, “Mobitex”, etc. Carriers such as Cingular, T-Mobile and Verizon use these networks to move voice and data nationwide.

• WiFi (Wireless Fidelity) Wireless – it’s really just wireless Internet access - allows you to connect to the

Internet without wires. Wi-Fi-enabled point-of-sale (POS) terminals (Omni 3750 WiFi, VeriFone Vx610),etc. use radio technologies to send and receive data anywhere within the range of a base station or wireless router. The coverage in the WiFi market is limited to the wireless base station, generally 300 feet. Cities like Atlanta are currently making WiFi available across the entire city by increasing the number of WiFi “hot-spots” that are available.

• Bluetooth® - Bluetooth technology is how mobile phones, computers, and personal digital assistants

(PDAs), can be easily interconnected using a short-range wireless connection. Mobile phones like the Audiovox® SMT 5600 use a secure Bluetooth signal to communicate with the Citizen CMP-10 printer. The coverage for Bluetooth is generally around 30ft.

Mobile wireless is the generic “wireless solution” when it comes to processing POS transactions with First Data. The remainder of this document will focus on mobile wireless.

Wireless Marketplace Who needs a wireless POS solution? Everyone and anyone! It’s not just for taxi’s anymore! The wireless marketplace can be broken down into two main segments, mobile and fixed. Traditionally, wireless solutions are sought for the mobile markets:

Wireless mobile markets

− Transportation (taxi, limousine, shuttle bus, etc.)

− Delivery (pizza, rentals, in-city couriers, etc.)

− Service (plumbing, HVAC, carpet, etc.) While the mobile market is still the prevalent market, going wireless in a fixed market requires a change in one’s paradigm.

Wireless fixed markets

− Transportable (stadium vendors, concession stands, sidewalk sales)

− Restaurant (pay-at-the-table, QSR /small-ticket, etc.)

− Retail (Kiosks, brick and mortar, etc.) Today, traditional merchants are paying their local phone companies anywhere between $40 - $60 per month for each additional phone line in the merchant’s location. Merchants are limited on the location of their checkout lane (s) and are unable to bring the solution to the customer.


Going wireless in the fixed markets allows you to collect additional revenue and offer your merchants a less-expensive and portable POS solution.

Service Average Monthly Cost to Merchant

Money in Your Pocket

Single Phone Line $40 - $60* $0*

Wireless $35* $10* * Pricing listed here is for illustration purposes only.

Wireless Security Are my wireless transactions secured? Absolutely! You’ve heard of SSL or Secured Socket Layer. SSL is a protocol developed by Netscape for transmitting private documents via the Internet. SSL uses a cryptographic system that uses two keys to encrypt data - a public key known to everyone and a private or secret key known only to the recipient of the message. The wireless world uses a similar infrastructure called WTLS. WTLS (Wireless Transport Layer Security) is the security layer of the WAP (Wireless Application Protocol), providing privacy, data integrity and authentication for WAP services. Simply put, WTLS is the SSL of the wireless world. See below:


Wireless Providers In order to process wireless POS transactions, a connection from a wireless provider to First Data must be established. There are quite a few connections in place today, some more ideal than others. First, some history on some legacy connections: First Data’s original direct connections were between Bell South’s Mobitex network and a connection to a wireless gateway, called US Wireless Data. A wireless gateway was and is an ideal solution because a wireless gateway can connect to multiple networks to First Data with one physical connection, as opposed to multiple connections, multiple pricing structures multiple maintenance. US Wireless Data allowed First Data to accept wireless POS transactions from networks such as Motient and CDPD (Cellular Digital Packet Data), run by AT&T. Since then, many changes and acquisitions have occurred in the wireless marketplace. Bell South’s Mobitex network was acquired by Cingular and then acquired by its current owner, Velocita Wireless. First Data still maintains a direct connection to Velocita and their Mobitex network today. Transactions Network Services (TNS, Inc) acquired the majority of the assets of U.S. Wireless Data. First Data still maintains a direct connection to TNS for network connections to Motient. The major CDPD wireless carriers (AT&T and Verizon) have since discontinued CDPD service, as of December 2005. Preferred Provider* First Data has since partnered with a wireless gateway called APRIVA. Using the preferred APRIVA wireless gateway, First Data can accept POS transactions from Motient, Velocita’s Mobitex network and Cingular’s GPRS (General Packet Radio Service) network. Again, the benefit of using a wireless gateway allows you offer wireless solutions to your merchants at a known fee, regardless of the network or coverage area your merchant may reside in. Using APRIVA allows you to offer merchants such wireless solutions as the Lipman NURIT® 8000 POS terminal and unique phone solutions as the Audiovox® SMT 5600 and the Motorola MPX 220™.

Alternate Provider* First Data has also established a direct connection with a company called eProcessingNetwork. Using solutions provided by eProcessingNetwork, merchants can securely process credit card and check transactions with Java™-enabled cell phones, such as the Motorola® i85, etc. Please visit your eProcessingNetwork training guide for more information. * = The appropriate network to use (for coverage) can be determined by checking the ‘coverage area’, this is done by typing in the zip code of the merchant location. If the network in question does not have coverage in that area it will suggest you choose another alternative. Coverage areas can be verified at any of the wireless providers websites.


Wireless Solutions So what should my merchants be using? Well, that all depends on their business model and what need you are trying to solve for. For merchants in the fixed markets such as:

− Transportable (stadium vendors, concession stands, sidewalk sales)

− Restaurant (pay-at-the-table, QSR /small-ticket, etc.)

− Retail (Kiosks, brick and mortar, etc.) The Lipman NURIT® 8000 Secure terminal (pictured below) is an ideal solution that can be worn on a belt, taken from table to table, or brought outside for a sidewalk sale. For merchants in the mobile markets such as:

− Transportation (taxi, limousine, shuttle bus, etc.)

− Delivery (pizza, rentals, in-city couriers, etc.)

− Service (plumbing, HVAC, carpet, etc.)

Omaha, North, Nashville

Retail, Restaurant

Features − Multi-merchant - Omaha only − Store and Forward − Debit /DUKPT − Account Number Truncation − Expiration Date Masking − Recurring Payment − e-Commerce Indicator − Retail w/tip on Nashville − Electronics Benefits Transfer on Omaha − GPRS via APRIVA™ Wireless Gateway


Phone solutions such as the Audiovox® SMT 5600 (pictured below) and the Motorola MPX 220™ on the APRIVA wireless gateway or the Motorola® i870 using eProcessingNetwork, may prove to be ideal mobile solutions. For more information on wireless POS solutions for your merchants, please consult with Relationship Manager.

Omaha

Retail

Features − Retail w/tip, Offline Debit − Store and Forward − Bluetooth to Citizen CMP-10 (30ft)

mag stripe capability secured to the phone

− PCI Compliant − Card swipe and key-entered − GPRS via APRIVA™ Wireless

Gateway


SECTION 5

Terminals


From low memory to high speed Internet, PDX Enterprise Solutions has programs for most existing terminals in the marketplace. And, because of our processing relationship, terminals proprietary to First Data Commercial Services platforms are easily reprogrammed. Listed below are several terminal solutions for new merchants or merchants wanting to upgrade equipment. Download Instructions and Quick Reference Guides are available for all terminals on Omaha and Nashville platforms on the PDX Sales Portal.

Omni 3750/VX 570 – this multi application multi merchant terminal from Verifone delivers fast processing speed and quiet printing with ATM style functionality. Widely popular because of its ability to do “Retail with Tip” processing, this terminal comes with dual modems for both IP or dial communication.

Nurit 8000 – a wireless terminal solution from Lipman provides flexibility for mobile merchants that may not have access to a phone line.

Omni 3730le/VX 510– a low cost terminal solution from Verifone that provides basic credit/debit card functionality. The sleek design and small footprint make it appealing for merchants with limited counter space. The LE can only support ONE application. Merchant who require credit card processing and gift cards (2 applications) can not use the LE. The VX 510 can support multiple applications.

T7Plus – definitely a “plus” to the popular line of terminals from Hypercom featuring an extended keypad for easy key driven functionality.

Nurit 8320 – an IP capable terminal from Lipman featuring fast transaction speeds and large, easy to read displays made popular by Lipman

Eclipse – designed by First Data this credit card terminal also offers a full check imager for processing Telecheck services such as electronic check acceptance.

Hypercom Optimum T4100 – an IP or Dial Up solutions from Hypercom. These terminals feature an oversized paper roll and self diagnostic capability.

LinkPoint AIO – a First Data proprietary terminal offering an integrated printer and pinpad. The AIO lives up to its name as the All In One solution.


There are hundreds of different terminals on the market today. All have an incredible range in pricing, memory, functionality and ease of use. Some of the most commonly seen terminals include; Hypercom T7, Hypercom T4100, Nurit 2085, Verifone VX 510 and 570 and the FD100 and 200 from First Data. There are also generally more then one for each type of terminal. Meaning a VX 510 may have several different versions for use on different networks, type of modem, amount of memory and many other options. Proprietary Terminals and Software Many companies have what is referred to as proprietary equipment or software. These are pieces of equipment that only work with that particular company. This means that if you run into a merchant that owns one of these types of equipment you will not be able to reprogram that terminal. To understand how a terminal can only work with particular companies you need a basic understanding of networks. Each processing company uses a network to send and receive the processed information for the transactions. For example Global Payments uses there network Global East. Where as First Data has several networks they use. First Data has a line of terminals called the FD’s. The FD100 and the FD200. These are proprietary to First Data’s Network. This means that any company using any other network will not be able to reprogram an FD terminal. Mercury is another company that utilizes proprietary software for use on there network only. You will see this software used frequently at restaurants. This again means that no one can reprogram the software. Fortunately with software some companies have what is referred to as a plug in for proprietary software. This is not a true reprogram, but the plug in captures the information as it is being sent and sends it to the correct network. This gives you the ability to use some proprietary software, but there are usually fees that coincide with using the plug ins. QuickBooks QuickBooks is a great tool for small businesses. It has many functions to help you run your business including; accounting, payroll, inventory, and much more. One function some versions of QuickBooks offers is credit card processing. Intuit knowing how helpful it is for a small business owner to use QuickBooks and have all of there processing information automatically entered into there accounting has made their processing service very expensive. It is a great convenience for merchants; however QuickBooks Processing feature is proprietary to a processing company called Intuit. Only with a QuickBooks plug-in can you process transactions through QuickBooks.

Nurit 2085 – an easy to use and very cost effective terminal solution from Nurit.

Hypercom Optimum T4205 – a compact option from Hypercom. It’s small, light weight and boasts an impressive 24MB of memory for the use of multiple applications.


e-Processing Network (EPN) is the only PCI certified QuickBooks software plug-in that allows merchants to bypass processing through the highly expensive Inuit network. Authorize.net offers merchants a download option. This allows for the merchant to download all of the transaction information that was run through the gateway to be downloaded into there QuickBooks Software. Free Terminal Program Many companies in the U.S. are now offering free equipment to there merchants. This can be a great tool to close a difficult sale. Terminals can cost hundreds of dollars and merchants are aware of this. If you offer to give a merchant a free piece of equipment it can not only add great value to working with you and PDX, but also instill a sense of trust in your business relationship. Keep in mind that PDX’s Free Terminal Program, like most programs out there, does not give ownership of the equipment to the merchant. It is for use by the merchant for as long as they use our services. In the event that the merchant chooses to cancel service the equipment must be returned to PDX Enterprise Solutions. A free terminal can be an excellent sales tool. However not all tools are used for all jobs. Giving a merchant a free piece of equipment has one major draw back to you as a sales person: LESS MONEY. The more you sell the more money you make. Not only does taking advantage of this program lose you the chance to sell that very piece of equipment but you may also miss out on some of your bonuses. Refer to the Free Terminal and Bonus sections of your contract and welcome guide or visit the PDX Sales Portal for more detailed information. Nevertheless, you have this tool at your disposal and we want you to succeed!


SECTION 6

TOUCH TONE ARU Processing



SECTION 7

IP Solutions


Payment Gateways 101 Point of Sale software and Internet Transaction Gateways are an ever growing part of the payment landscape. Whether a home based business, traditional retail, or full website selling an array of products, many merchants are utilizing computers and the internet to replace traditional terminals for payment processing. PDX Enterprise Solutions offers certification of over 100 Third Party Processing Gateways and 200 Vendor Software applications via various platforms. What is a payment gateway? A payment gateway is a portal that facilitates communication of transactions from the merchant’s location to the payment processor via the internet. It must be Payment Card Industry (PCI) compliant and use the latest in encryption technology for maximum data security. Why use a gateway? A payment gateway gives a merchant the ability to utilize the Internet for processing transactions. In addition to providing an extra layer of data security, gateways are a centralized location for transaction data storage and for reporting. It is accessed by a POS application running on your PC which gives it a very user-friendly interface, easily upgraded, and eliminates the need to purchase specialized, single purpose terminals. It requires no more space than that which is already occupied by one’s computer. Benefits of Internet processing Securely processing transactions over the Internet saves a merchant time and money. Since the Internet connection is “always on”, transactions are immediately transferred when the data is entered. It does not require a dedicated telephone line as it utilizes the same DSL modem as one’s Internet connection. What is the difference between a Virtual Terminal and an Online Terminal? Nothing, it’s a matter of semantics. Both require the merchant to log onto a web site to enter the order information (transaction type, amount, payment method, etc.) and receive an online approval or decline. Gateway Reports Regardless of how the transaction is initially processed (online, shopping cart, wireless terminal, etc.), transaction data is available through a payments gateway. This data is easily accessed for current and historical reporting, locating past transactions from a customer, and recurring payments information. Some gateways even offer the ability to download these transactions into QuickBooks and/or to an Excel spreadsheet for easy accounting reconciliation and analysis. Types of Merchants Internet payment gateways, like e-Processing Network, are not just for Internet merchants anymore. ePN has POS applications designed for retail, chains, wireless, and (of course) Internet merchants. ePN Products and Services (*see the ePN Solutions and ePN TPS Guide for detailed information on each product)

Retail, Chain stores: ePNJPOS with multiple mag stripe readers and printer combinations - PIN debit and signature capture options , Online terminal with optional card reader Wireless: ePNMobile, Way Systems, Commericant Internet: ePNCart, ePNShip, ePNAuthenticate, Order Form Generator, all major 3rd party shopping carts


Others: ePNPlugIn for QuickBooks™, Gift/Loyalty, ePNRecur

Listed below is a comparison chart showing 3 of the more popular Gateways that offer Virtual terminal, Mail/Telephone, and E-Commerce processing solutions.

Merchant Type Features Authorize.Net PayPal

e-Processing Network

Check Services √ √ Customize Pos Form √ √ √

Web Fraud Protection √ √ √ Recurring Billing √ √ Shopping Cart Compatible √ √ √

Shopping Cart Included

√

Check Services √ Fraud Protection √

Retail Pos Solution Compatible √ √ Recurring Billing √ Keyed and Swiped √ Check Services √ √ Fraud Protection √ √

MOTO Individual Username & Passwords √ N/A Recurring Billing √ √ √ Number of Users N/A 1 N/A Check Services √ Wireless Setup √ √

Wireless Provides Wireless Terminals √

Wireless Accessories √

Authorize.net Authorize.Net is a payment gateway service provider allowing merchants to accept credit card and electronic checks payments through their Web site and over an IP (Internet Protocol) connection. Authorize.Net claims a user base of over 212,000 merchants, which would make them the Internet's largest payment gateway service provider. Authorize.Net sells its services to merchants both directly and indirectly through re-sellers, and a merchant wishing to use Authorize.Net's payment gateway services can contact either Authorize.Net or a reseller. Authorize.Net offers two ways to integrate their payment gateway services into a merchant's Web site. The first method is called the Simple Integration Method (SIM). As the name implies this method is the less


technically complex of the two. Using the Simple Integration Method a merchant would send the customer to the Authorize.Net website where a secure order page will capture their transaction information. Upon completion of the transaction the customer is returned to the merchant's Web site. This method is usually preferred by small businesses who do not have the technical capabilities to do a more advanced integration. The second method of integration is called the Advanced Integration Method (AIM). This method of integration is more complex but more powerful than the Simple Integration Method. The Advanced Integration Method utilizes the Authorize.Net API to process a transaction without the customer leaving the merchant's Web site. The customer is unaware of how the transaction is processed and the checkout process is seamless to them. This method is usually chosen by larger businesses that wish to present their Web site in a professional manner. A common misperception about Authorize.Net is that they are a merchant account provider. Authorize.Net currently does not offer merchant accounts as a service. To use the payment gateway offered by Authorize.Net a merchant will need to establish a merchant account through PDX. Authorize.net offers a variety of services including eCheckNet and Fraud detection. Learn more about these important services on our Agent Portal website. Authorize.Net's large user base makes them an ideal target for hackers and extortionists. In September 2004, Authorize.Net's servers were hit by a Distributed Denial of Service (DDoS) attack. The DDoS attack lasted for over one week and caused a virtual shut down of the payment gateway's service. The attackers demanded money from Authorize.net in exchange for stopping the attack. On July 2nd, 2009, 11pm, the entire web infrastructure for Authorize.net (main website, merchant gateway website, etc) went offline and stayed down all morning July 3, 2009. None of the over 200,000 merchants who use Authorize.net payment gateway were able to process credit cards. Authorize.net's phone numbers were closed July 3rd because of the July 4th holiday as previously announced on their website (though the website was down at the time). Other companies that have nearby offices have reported to the media that there was a fire. Authorize.net started a twitter account that morning, but did not update their phones to give notice to customers until July 5th when they reopened phones. e-Processing Network (EPN) The eProcessingNetwork Payment Gateway enables merchants to securely Process and Control their Internet, Mobile, Point of Sale, Recurring and Business Financial Software transactions. eProcessingNetwork enables merchants to accept credit cards on a secure, real-time basis from their Web site, through Mobile devices and directly from their place of business. The latest, most sophisticated digital encryption is used to transmit information, and direct communication lines are used to obtain real-time authorizations, ensuring the accuracy and validity of each transaction. Plus, merchants get the added convenience of having funds deposited directly to their bank account. Address Verification and Card Verification Value (CVV2) Services are performed to reduce the chance of fraud and charge-backs. Merchants can limit the number of times Internet customers can attempt a transaction, and can configure their eProcessingNetwork account to accept transactions only if the customers' AVS and CVV2 data was entered correctly.


The entire process is simple and convenient to use. eProcessingNetwork offers reliable and secure credit card transaction processing services and professional support every step of the way. eProcessingNetwork enables merchants to accept and manage gift cards from our easy to use gift card manager. This feature allows real-time management of gift card transactions from the web to the store front. Gift cards are a great way to increase sales and create return business. Gift cards can be activated at time of purchase and the value decreases as they are used. Our unique management system puts the merchant in total control making accepting gift cards as easy as taking any major credit card. EPN offers a wide variety of solutions for merchants:

• Internet • Mobile • Point of Sale • Recurring • Financial Software

Learn more about EPM on our Agent Portal. Benefits of EPN over Authorize.net

1. EPN does not sell its services to merchants. 2. Merchants need only one EPN account for either Retail or MOTO. 3. EPN offers an encrypted and secure retail card reader. 4. Lower set up costs for the merchant. 5. Smaller company with less hold time (1 minute vs 30 minutes). 6. QuickBooks plug-in. 7. Virtual desktop terminal. 8. iPhone and Blackberry support.

PayPal Some online merchants use PayPal for processing their credit, debit and check transaction online. PayPal is convenient, easy to use and consumers know and trust it. There are some major draw backs to using PayPal as your processor. One is that they have very high rates. Generally speaking merchants can shave a good percentage off of their monthly bills by using a gateway provider like the ones above. The second draw back to using PayPal is the protection of the consumer. PayPal specializes in protecting the consumer at all cost rather then protecting the merchant. Let’s look at an example. If Frank goes to TV’sRUS.com and purchases a $1,400 plasma screen T.V., but he neglected to tell his wife. Franks wife is upset and makes him cancel payment on his card, but the T.V. has already been shipped. TV’sRUS.com is now out their $1400 and the T.V. until they are able to recoup one or the other. If this happens a few times this can devastate a small business. A processing company goes to bat for the merchant to help protect them from situations like the above. Will this example happen frequently? Probably not, but if it were to happen it could have devastating effects on a business. Why gamble. Save money and protect yourself by not using PayPal.


Here is a quick comparison to show how PayPal compares to EPN: Feature PayPal Virtual Terminal** ePN Virtual Terminal Set Up Fee $0 $ You Set Monthly Fee $30 $ You Set Per Trans Fee $.30 $ You Set V/MC Discount, based on monthly sales volume

3.1% $0 to $3,000 2.7%* $3,000 to $10,000 2.4%* $10,000+

No volume restrictions + you set the discount rates.

*Merchant must complete a PayPal application for approval by PayPal. Chargeback Fee $20 $ You Set AVS and CVV2 $20/month & $.05/trans Included Recurring Billing $30/month $ You Set Card On File Maybe Yes Purchase Card level 2 No Yes Gift/Loyalty Cards No Yes QuickBooks Integration Through 3rd party software; download

transaction batches only Process credit, debit, check sales within QB or download transaction batches

Wireless Terminal Support Through 3rd party software Yes External Swiper No Yes Cross-Promote Your Competitors to your customers

Yes No

Who owns your customer’s data? PayPal Merchant **Must also apply for a PayPal Business Account

e-Processing Network also supports iPhone & Blackberry users, has a store & forward device, web and desktop applications. PayPal Virtual Terminal Agreement: http://www.paypal.com/cgi-bin/webscr?cmd=xpt/UserAgreement/ua/PolicyProVirtualTerminal-outside


SECTION 8

Value Added Services


Gift and Loyalty Cards

How Can Gift Cards Increase Profits Gift Cards represent the single most profitable item you can sell in your business. A recent survey showed that 139 million people—64 percent of the U.S. population—purchased or received a gift card in the past year. Single Most Profitable Item There are two significant ways that gift cards bring profit to a merchant. Over half of consumers spend more then the value of there card. This is referred to as Ticket Lift. The majority of consumers who did not spend the total amount on there card never redeem the remaining balance. This is referred to as Breakage. Advertising Benefits Bob purchases a gift card at the PDX Café. He then gives the PDX gift card to his friend Frank for his birthday. Frank has never been to the PDX Café, but takes his wife in for dinner to use his gift card. Frank loves the French Dip sandwich. Him and his wife start coming in to PDX Café once a month to have there French dips. The PDX Café purchased a very inexpensive card so that they may utilize there own customer base to advertise and gain new customers. The most powerful form of advertising is word of mouth and the cards themselves are profitable. What are Loyalty Cards Loyalty cards are simply a card that allows a merchant to offer incentives to consumers for being a regular customer. Examples of loyalty cards include; Safeway Club Card, Fred Meyers Rewards Card, Albertsons Preferred Card or even a punch card at your favorite coffee shop or pizzeria. Why Use a Loyalty Card Gaining new customers can be costly. Advertising mediums are expensive and explaining to your target market who you are, what you sell, where you are and why they should shop with you can be very difficult. Increasing the frequency and ticket sizes of your current clients is much less costly. Your current customers already know who you are, what you sell, where you are and why they should shop with you. They simply need an incentive to visit you more frequently and spend more money. Loyalty cards supply that incentive. How Does a Loyalty Card Work A loyalty program is defaulted to a points program. The merchant enters the dollar amount of a cardholders purchase and the system converts the dollars into points. The default ratio is $1.00 = 1 point, i.e. a $25 purchase earns 25 points. The ratio can be set to whatever the merchant would like. The program will then accumulate points until the merchant redeems them using the redeem points prompt on the terminal. The merchant can determine what a cardholder receives for each and any point level attained. The program also has an automatic feature whereby a pre-set point level will throw off either a. value to the gift card side, or b. a short message on the receipt (e.g. Free Coffee). The program can also be used as a frequency card (like a punch out certificate). Our two Gift Card & Loyalty Program vendors are: TenderCard and ValuTec.


About TenderCard Get with the Program We call ourselves the best in the business; but what makes TenderCard so different? Years of Experience Started in 1997, we helped to create the gift card industry. Out products and programs are time-tested and proven to work. Strong ISO Relations Every company talks about service, TenderCard delivers it. Our staff is here with solutions for you and your clients. Comfortable With Merchants of all Sizes TenderCard brings Madison Avenue to Main Street. All of our merchants receive the same level of service and over all quality in there gift card program as that of the major national retailers. Program Flexibility One of our greatest strengths is the depth and breadth of our programs. TenderCard offers something for every merchants needs.

♦ Classic Gift ♦ TC365 Annual Gift Card Program ♦ Chamber/Association Program ♦ Intra-Program Settlement ♦ Private Label ♦ Integrated Processor Program (IPP) ♦ Loyalty

Many Card Options The start to any effective gift or loyalty card program is a top quality card. We have a wide range of cards to choose from and a design team to assist in the design of your merchants’ cards.

♦ One Color Pre-Designed ♦ One Color Custom ♦ Four Color Custom ♦ Platinum Starter Cards

User Friendly Card Quantities Smaller merchants don’t require as many cards as national chains. To that end, we accept pre-designed orders for quantities as low as 100 cards and custom card orders as low as 250 cards. Short Delivery Time on Card Orders The first question every merchant asks after placing their order is “When will I get my cards?”. Our Delivery time for proof approval for pre-designed cards is 3-5 business days. For custom cards 12-15 business days, on most orders.


About Valutec Who We Are Valutec Card Solutions is a full service gift & loyalty card solutions provider. For over 10 years, we have served as an industry leader in pre-packaged and custom gift card programs and merchandising tools. Our focus is on maximizing the return on investment for each merchant program by providing the right tools for the job and the information needed to make your program a success. Card Design and Printing: Every successful gift card program needs a great card design. Valutec simplifies the graphic production process so you get the most effective design and the highest quality card card for a very affordable price. Product Merchandising: Marketing the program is one of the most important factors determining success. Valutec has developed a line of merchandising tools to do just that. From card racks and hangers to window signs to a full variety of card carriers, Valutec has it. Can we design and produce a custom item just for your business? Absolutely. Transaction Reporting: Visibility into program performance is key for any merchant. That’s why Valutec offers a variety of report options via our website or email. Whether you require transaction data for daily batch reports, or customer demographic data as part of your loyalty rewards program, we have you covered. Program Execution: From the printing of your card design to the installation of your equipment and training, Valutec is there to help you. Our dedicated customer service team will give you the tools that you need to get your program up an running quickly and efficiently. Management Team: Valutec’s management team brings over 85 years of industry experience to our merchants and partners. Our company leaders have spoken at industry events and have authored articles focusing on industry trends, technology and gift card marketing. To learn more about our company leadership, click here.

Check Services Check processing services are used by a wide variety of merchants from your grocery store to car dealerships. There are two major types of check processing. Check Guarantee Why sell Check Guarantee?

• YOU WILL MAKE MORE MONEY! • Completes your non-cash service arsenal • Merchant retention tool • Versatile sales tool • Easy to prescribe


• Merchants need it “50 million adults in the United States do not have credit cards. Of those who do, 40% are within 5% of their credit limit.” How does it work?

• Customer elects the option to pay with a check. • Merchant reviews ID and writes the required information on the check. • Merchant obtains approval number through their terminal, the internet, or by phone. • Merchant deposits the check manually into their merchant bank account. • If check is returned, merchant mails it to Check Center, for processing within thirty days • Allows merchant to accept virtually every check.

Check Conversion Plus Benefits

• Makes a check like a paper credit card! • Saves time! • Deposits/accounting • Saves money! • Bank Fees, Returned Item & Deposit • Business checks converted • Free web check register • Extensive with access 24/7/365 • Business Office Conversion • Converts mailed in checks too!

How does it work?

• Customer elects the option to pay with a check. • Merchant processes the check by running it through a check reader connected to their POS device. • Once the check is read, the approval process is complete. • A receipt prints for the customer to sign. • Check is stamped Void and the merchant retains the paper check • Merchant receives funding for the check amount 48-72 hrs later.

Multiple Check Program

• Gives the merchant the capability to offer flexible payment terms without added risk! • Buy now, pay later!!! • 2-4 checks for single purchase, deposited over a period of time • Great up-selling tool!

Works Best For: • Auto Dealers—New and Used • Automotive Tire • Auto Body/Paint • Furniture stores • Auto Repair


• Building Materials • Funeral Homes • Sporting Goods • Veterinary Clinic/Hospitals • And other high ticket item merchants

Our check services vendor is CrossCheck.

About CrossCheck

CrossCheck, Inc. is the third largest check approval and guarantee company in the nation. CrossCheck provides payment solutions to thousands of merchant outlets and auto dealerships across the country.

Founded in Sonoma County, in 1983, CrossCheck is headquartered in Rohnert Park, California with an additional office in Dallas, Texas. The company markets its services to merchants throughout the U.S., US territories, and Canada through a direct sales channel, over 1400 independent sales offices and 117 partners. In addition to check approval and guarantee services, the company has developed patent-pending technology for electronic check conversion and wireless transaction processing.

CrossCheck’s payment services benefit both merchants and consumers. Guarantee services enable merchants to increase sales by safely accepting checks from more than 180,000,000 individuals who have checking accounts. Merchants are protected against losses on checks approved by our authorization center because CrossCheck agrees to reimburse, at face value, checks which have been approved, up to the maximum approval limit. Consumers benefit through easier and faster check acceptance.

CrossCheck’s services offer increased sales, improved customer service and convenience to a variety of businesses and are especially suited to new car dealers, auto aftermarket, building supply stores, specialty retail, home furnishing stores, medical offices and small businesses. Industry specific premiums and innovative technology sets us apart from our competition.

In addition to its proprietary endeavors, CrossCheck continually invests in new technology to ensure its products and services help merchants stay ahead of today's continually changing retail environment.

Capital Advance

What is a Merchant Capital Advance?

A Merchant Capital Advance is a form of receivable factoring- not a loan. With factoring, money is advanced to the merchant based on the credit and payment history of the clients they serve. PDX Enterprise Solutions has teamed up with a partner to provide you with the ability to sell capital advances, to be paid back by the merchant with a percentage of their daily credit card deposits.

What can a merchant do with an extra $25,000?


Every business owner could use some extra capital. What if there was a way to receive a capital advance quickly and easily for $150,000 without interest. Wisely invested into a merchants company, it could take their business to the next level. Think of the possibilities:

• Build an addition to their current business location. • Pay Off Bills • Launch the Marketing Campaign they have been planning • Purchase much needed equipment or hire personnel

The Best Part!

• No collateral • No complicated paperwork • No fixed payments • Get paid within five to seven business days

Websites PDX’s management team has a long history in technology and websites are no expection. We have partnered with LiteHouse Technologies to provide in State development resources for all website and technology work our merchants need. All work is done domestically and PDX will act as the project management team to ensure quality and timely completion of all projects. Please refer to our Agent Portal in the Pricing section for complete details on the services and merchant prices from LiteHouse.

Supplies PDX is pleased to be able to offer all our clients wholesale pricing on paper and terminal accessories. Every new merchant will receive a special ID and CODE to access our shopping portal. You can also find a flyer for this on our Agent Portal.

Equipment Leasing PDX is pleased to be able to offer equipment leasing through Lease Finance Group. The Lease Agreement can be found on the PDX forms site. It is a very quick and easy to fill out form. Most of the information needed is already on the merchant application. Simply add the terms, monthly amount, merchant initials and your form is complete. Leasing is a great option that allows merchants the ability to accept electronic forms of payment without the hassle of purchasing upfront an expensive piece of equipment. Refer to the Equipment Pricing section on the PDX Sales Partner Portal for the Cap amounts on various equipment.


LEASE PAPERWORK FLOW 1. Agent sells the lease option to the merchant. 2. Agent explains the terms and conditions to the merchant. 3. Agent sends signed merchant application (which includes the lease information) and voided check to

PDX ENTERPRISE SOLUTIONS as usual. PDX will forward to leasing company. Leasing Operations reviews the leasing paperwork submitted by Agents. PDX will notify agent of any paperwork rejects via email.

4. Once credit tier identified to PDX, PDX will inform agent. LEASE COMMENCEMENT PREREQUISITES

1. Receipt of lease agreement. 2. Voided Check. 3. Approved Merchant ID Number. 4. Delivery and Acknowledgment Form. 5. Verbal Verification, call verification department when equip installed

FUNDING PROCESS FLOW

1. Completed lease paperwork is received by PDX ENTERPRISE SOLUTIONS office no later then 2:00 PM EST. Lease is delivered to leasing company for keying and credit approval.

2. Lease is commenced. Agent is notified via email, with tier and commission is ACH’d. Example: lease commenced on Monday will be ACH’ed on Wednesday. There is a $15.00 per application fee. If no ACH, then a Check will be issued and shipped for an additional $29.00 fee.

You have the option to submit a lease on the Merchant Account Application, or to use a stand alone application after the merchant has been activated.


SECTION 9

Underwriting Guidelines


Underwriting Guidelines and Procedures Our underwriting goal at PDX Enterprise Solutions is to provide the most aggressive, responsible and profitable approval process in the industry. Please review these guidelines thoroughly and follow them as closely as possible. With a thorough understanding of these policies, you will ensure your enduring success in submitting applications to PDX. The process is simple:

1. Understand the PDX underwriting policy. 2. Provide all the necessary supporting documentation.

Applications received by PDX Enterprise Solutions will be assigned a status within 3 business hours from the time the application is received electronically. Every merchant application sent to PDX must be as complete as possible for our staff to review. Completing the appropriate fields on the application such as “product sold” is very important in avoiding pended files. It is the agent’s responsibility to provide underwriting the additional information requested in order to deliver a speedy and accurate decision. It is the responsibility of PDX to provide speedy and accurate updates regarding every application submission. The PDX underwriting department will review applications Monday through Friday from 9:00am EST until 7:00pm EST. Any completed applications received prior to 4:00pm EST that meet underwriting criteria, which always includes a copy of the voided check, have the potential to be “live” the following day by 12:00pm EST. All Documentation can be submitted at the time of application entry via the “New Account Fax Cover Sheet” provided with your package. Completed applications received after 4:00pm EST will be considered accounts received on the following business day.

Primary Decision Factors Does the business actually exist? Applications sometimes come to PDX from falsified

businesses or from individuals with falsified identities. PDX Underwriters are required to verify the principal’s identity and the validity of business on every application. Some of the tools they use in their investigation are:

• Personal Credit addresses, employment history • White/Yellow pages • Networksolutions.com • Better Business Bureau • Federal tax ID will be required in all cases

The information that may be requested if the Underwriters investigation does not bring favorable results includes:

• Completed site inspections • Articles of incorporation/Partnership agreement/business license • Copy of social security card or drivers license • Copy of valid customer or supplier contract • Copy of valid Drivers license • Copy of recent phone/Utility bill from business or home address. • Marketing Materials or business card


Who? What? When? Where? This information is vital to a speedy approval process. There are specific areas on the merchant application such as “Product Sold”, “Comments”, and “Shipping/Billing Policy” that if completely and accurately completed should ensure less pending accounts.

• Who? 1. Accurate addresses and personal information 2. Accurate phone numbers (Cell phone #’s are not permitted) 3. Accurate web addresses 4. Who fulfills orders? Accurate fulfillment info

• What? 1. Product/service sold must be clear

• When?

2. Seasonal Account 3. Weekend only or one time sale 4. Hours of operation 5. How long from time order is received to when it is fulfilled?

• Where? 1. Trade Show/Flea market merchant 2. Internet merchant 3. Home Based Merchant 4. Where is product shipped from?

Is the owner and/or the business financially solvent? PDX must be sure that the person(s) personally guaranteeing the account can financially support the requested volume and the potential liability associated with their business. PDX REQUIRES A PERSONAL GUARANTEE ON A PDX ENTERPRISE SOLUTIONS APPLICATION IN EVERY CASE EXCEPT NOT-FOR-PROFIT COMPANIES, UNLESS EXCEPTION IS MADE ON A WELL ESTABLISHED CORPORATION PRIOR TO SUBMISSION. Use general comments field on application if no Personal guarantee will be submitted, the underwriter will then determine if additional documentation will be requested due to this omission. Documentation used to determine financial solvency includes:

• Personal Credit Profile • Personal Tax returns and/or business checking statements • Business financials/Tax returns and/or Dunn & Bradstreet report

Three Underwriting Programs Card Present Program: This program will consist of Retail, Restaurant, or Service where more than 70% of transactions are swiped through a terminal or manually imprinted. The product must be fulfilled at the point of sale. Information needed to underwrite the application consists of the criteria as stated in the card present merchant guidelines. These applications will be approved if all primary decision factors AND underwriting criteria have been met. MO/TO Internet Program: This program will consist of internet, telephone order, and mail order business where more than 30% of transactions are keyed or Internet based. It is highly recommended to include a cover letter with the application (especially on higher volume MO/TO and Internet accounts) explaining in detail how the business operates. Include any information that will clearly outline the business to the underwriter. This will help clarify questions that may arise had we not received the cover letter. In addition a “Card Not Present” addendum will be required on merchants in this category.


Risk Based Program: This Program consists of all merchant types listed in the Underwriting Guidelines section as Risk Based. The Guidelines set forth in the Card present or MO/TO Internet programs will apply in addition to the specific guidelines set forth for these higher risk/liability businesses. These business types will be subject to more stringent personal credit requirements. All of these businesses will require a personal guarantee. There is a higher probability that a reserve or daily discounting will be required on merchants in this category. A reserve may be requested when a merchant falls into a higher risk category. This will be based on the business type in conjunction with the size of the average ticket and monthly volume, personal credit, bankcard history, fulfillment time-frame, and potential for charge backs. These accounts may require a reserve in the form of an up-front deposit and/or a percentage collection reserve, until the required reserve amount is met. When a reserve is required on an account, PDX Enterprise Solutions will require that the merchant sign the “Reserve Acknowledgement and Acceptance form” included with your package. It will be more common in this program than in the Card present or MO/TO Internet program that an account with a certain credit profile may call for additional risk based pricing in order for PDX to be willing to bear the risk.

Underwriting Guidelines Although these are only guidelines based on what underwriting will most likely need in order to make a decision, please remember that it is better to provide more information than not enough. Card Present Merchants

Retail, Restaurant or Service where more than 70% of the transactions are swiped through a terminal or POS device...

Product or service is fulfilled at point of sale. Not a Risk Based or Ineligible listed merchant type


Card Present Merchants Supporting Documentation

LEVEL ONE $0 - $100,000 Average Monthly Volume

• Signed, completed and accurate application • Voided Check that reflects DBA • Bankruptcies must have proof of discharge. (ch 13 and 11 considered if

currently in repayment, must provide documentation) • No active Federal Tax Liens • 1 month current processing statement (If applicable) • Site verification documentation (Either copy of Utility bill, business license, or

signed site survey)

LEVEL TWO $100,001 - $300,000 Average Monthly Volume

All Level One requirements plus: • 3 months current consecutive months of processing statements (If applicable)

LEVEL THREE $300,001 + Average Monthly Volume

All Level One and Two Requirements plus: • Provide marketing materials and a product/service price list. • Three months of business banking statements. • Copy of valid driver’s license or government issued ID/SSN Card. • Most recent personal, and/or corporate tax returns. • Partnership: Partnership agreement Corporation: Articles of Incorporation Non-Profit: IRS Proof of non-profit status.

*(All Non-Profits may require business financials if no PG is provided.) • Completed Site Survey with Photos


MO/TO and Internet Merchants

A storefront merchant that keys more than 30% of their transactions or a swiped merchant in which the product/service is not fulfilled at the point of sale.

Any MO/TO or Internet merchant. Not a Risk Based or Ineligible listed merchant type

MO/TO and Internet Merchants Supporting Documentation

LEVEL ONE $0 - $50,000 Average Monthly Volume

• Signed and completed application • Voided Check that reflects DBA • Bankruptcies must have proof of discharge. • No active Federal Tax Liens • Marketing materials with refund policy clearly stated (If MOTO) • Need active website with refund policy clearly stated (For Internet) • Selling, shipping and billing method must be clear. • Three current consecutive months of processing statements (If applicable) • MOTO questionnaire with Visa mandated language signed by merchant • Site verification documentation (Either copy of Utility bill, business license, or

signed site survey) LEVEL TWO $50,001 + Average Monthly Volume

All Level One requirements plus: • Copy of valid driver’s license or government issued ID/SSN card. • Describe advertising method and provide a price list. • Three months of business banking statements. • Site inspection, including photographs of storefront signage and inventory. • Most recent personal, and/or corporate tax returns. (2 years may be required) • Copy of customer contract or invoices • Partnership: Partnership agreement Corporation: Articles of Incorporation Non-Profit: IRS Proof of non-profit status. *(All Non-Profits will require business financials if no PG is received) • At least 2 Trade References upon request • Documentation showing PCI compliance per VISA may be required at high

levels of transactional volume


Risk Based Program Any merchant on the below listing of Risk Based Merchant types

All applicable requirements as set forth by the Card Present and MO/TO Internet programs apply. These requirements are in addition to those guidelines for these merchant types at ALL VOLUME LEVELS.

Risk Based Merchants Supporting Documentation

Possible Statuses

• Approved – Account is approved for processing with PDX Enterprise Solutions • Conditionally Approved – Account is approved for processing but with additional documentation

needed to complete our file. This documentation must be received within 5 business days. Settlement setup will be suspended until documentation is received. This status will be utilized at discretion of Underwriter.

• Pending – Account is held for additional documentation to support approval or due to incomplete paperwork. Notes online will hold details on the hold reason. Typical hold reasons are as follows;

o Missing ________ from application o Provide more details on mode of transaction o Need active website or website printouts showing product and policies o Provide Reserve letter for _____ amount o Please forward signed application and/or voided check o Need current financial statements and/or tax return o Need prior processing statements o Provide addendum letter agreeing to price change or term change o Need copy of utility bill/business license/signed site inspection

Risk Based Merchants

• Copy of supplier invoices or customer contract (If Applicable) • Delivery must be within 90 days of payment • Letter to limit future delivery risk to less than 90 days may be requested as

determined by underwriter • More stringent credit requirements will apply • Reserve letter will be likely

RISK BASED PROGRAM - MERCHANT TYPES Catering Internet Service Providers Limousine/Taxi Services Long Distance Service Providers Fine Jewelry Sales Virtual Auction Houses Computer Sales Discount Coupon Book sales Software Sales (Non-Swiped) “New” herbal Supplements Furniture Sales Charter Yachts/Buses Seminar Insurance Policy Issuers Average tickets over $2000 Advice on sporting events Health/Sports Club memberships Flea Markets Pawn Shops “How to” Publications Flooring Sales Sports Memorabilia Construction Contractors Ticket Brokers Custom made Merchandise Used Auto Dealers Merchants with Substandard Credit


o Need Card Not Present addendum o Need marketing material and/or product price list

• Declined – Account is not accepted by PDX Enterprise Solutions for processing due to inherent risks in business type, financial profile of merchant, or some combination of both. Typical reasons for decline are as follows;

o Ineligible business type o Excessively derogatory credit o Insufficient financial strength o Excessive future delivery exposure o Excessive exposure

• Cancelled – Account is withdrawn by agent/ISO prior to approval

Ineligible Accounts

PDX Enterprise Solutions will not accept merchants listed on the MATCH. PDX Enterprise Solutions will not accept merchants listed as ineligible PDX Enterprise Solutions will not accept merchants with an active Bankruptcy (CH. 13 & 11 under

repayment will be considered for Card Present merchant types) DISCOUNT METHOD : THE STANDARD DISCOUNT METHOD FOR PDX ENTERPRISE SOLUTIONS IS DAILY DISCOUNT – THIS

MEANS THAT THE MERCHANT WILL HAVE THEIR QUALIFIED DISCOUNT DEDUCTED ON A DAILY BASIS OUT OF EACH BATCH. ALL ADDITIONAL DISCOUNT, AUTHORIZATION AND OTHER FEES WILL BE DEDUCTED DURING NORMAL MONTH END BILLING. THE MERCHANT AND/OR AGENT MAY REQUEST THAT THE MERCHANT BE PUT ON MONTHLY DISCOUNT BY SELECTING

MONTHLY ON THE MERCHANT APPLICATION. HOWEVER, IF THE UNDERWRITING DEPARTMENT DETERMINES THAT THE

MERCHANT PRESENTS A CREDIT RISK, DAILY DISCOUNT WILL BE APPLIED IN THE SOLE DISCRETION OF THE NDERWRITER. IN THIS

CIRCUMSTANCE, THE MX ONLINE SYSTEM WILL BE NOTATED WITH THIS DETERMINATION AT THE TIME OF APPROVAL FOR THE

AGENT TO VIEW AND INFORM THE MERCHANT.

Excessive Contingent Liability Escort Services Firms operating “Get Rich Quick Schemes” Furniture Sales (Non-Swiped) “How To” publications with less than 1 yr in business Illegal Products Investment Opportunities Jewelry Sales (Non –Swiped) Mail Order Coins Magazine Subscriptions Mortgage reduction services Non-FDA outrageous claim weight loss products Psychic Network Pre-paid Phone Cards Pyramid sales programs (Multi Level Marketing) Factoring Organizations Sexual Enhancement Products Travel Agencies Tour operators that take prepayment Time-share sales/Rentals Travel Certificates Wire Transfers (MOTO Money orders) Online/MOTO Sales of Prescription drugs

Any merchant prohibited by Visa/MasterCard Any high risk merchant as defined by Visa/MasterCard: • Audio Text • Inbound/Outbound telemarketing • Audio/Videotext • Airlines • Export Adult Industry (All types of business including retail) Annual Memberships (not including trade associations) Bail Bonds Bankruptcy/Collection Attorneys Check Cashing Establishments (Non-bank cash advance) Collection Agencies Companies engaged in lotteries, raffles or gaming Computer Sales (Non-Swiped) Credit Card Protection Credit restoration or repair agencies Dating Services (Non-Swiped) Discount travel clubs/ subscriptions Discount Medical Cards Downloadable Software Drug Paraphernalia of any form (Non-Prescription) Keyed/Internet Cigarettes/Tobacco


SECTION 10

Merchant Forms


Merchant Applications All current forms for submitting merchant applications can be found in the PDX Agent Portland under the Applications section. Please make sure you are always using the version posted on our portal as documents are updated periodically. Your merchant application package should contain, at minimum, the following documents:

• Application Cover Page • Completed and signed Merchant Application • Signed Program Guide Confirmation Signature Page • Voided Check • Previous Processing Statements (see Underwriting Guidelines for number of months)

Applications must be submitted through to PDX via email or fax. Additional documents found in the Applications Documents section are:

• Merchant Program Guide • Request for Next Day Funding Program • Change Request Form • Value Added Service Applications • Donation Election Form

You will receive 1:1 training on the merchant application. PDX Charities We strongly believe in giving back to our community and we’re created a program that allows merchants to select one of four national, and well run, charities for us to donate a portion of our profits from their account. This is an excellent selling tool for you. Many merchants want to work with companies that care about their community and surroundings. Use our good deed to help you! Here is the list of charities PDX supports:

1. Ducks Unlimited 2. Habitat for Humanity 3. Juvenile Diabetes Research Foundation 4. Make A Wish Foundation

Ducks Unlimited: Ducks Unlimited conserves, restores and manages wetlands and associated habitats for North America's waterfowl. These habitats also benefit other wildlife and people. Ducks Unlimited achieves this by:

• Restoring grasslands - around wetland grasslands are home to much wildlife • Replanting forests - replanting hardwoods and mimicking historical flooding increases winter homes

for many waterfowl • Restoring watersheds - water quality is a priority con the conservation of wetlands


Habitat for Humanity: Habitat for Humanity works in partnership with people everywhere, from all walks of life, to develop communities with people in need by building and renovating houses so that there are decent houses in decent communities in which every person can prosper. Through volunteer labor and donations of money and materials, habitat rehabilitates simple decent houses alongside their homeowner families. New homeowners pay a small down payment and an interest free mortgage to help found more homes. Juvenile Diabetes Research Foundation: DRIVEN by the needs of people with diabetes, the mission of the Juvenile Diabetes Research Foundation International is to find a cure for diabetes and its complications through the support of research. JDRF works to accomplish their goals by finding and funding the best and most relevant research to help achieve a cure for this devastating disease through restoration of normal blood sugar levels, avoidance and reversal of complications and prevention of diabetes and its recurrence. Make A Wish Foundation: We grant the wishes of children with life-threatening medical conditions to enrich the human experience with hope, strength and joy. Make a wish relies on donations of items, money and time from professionals in many fields to fulfill the wishes of terminally ill children.


SECTION 11

Selling Successfully


Before we can begin to sell the products and services in the bankcard industry, we must first discuss the approach to selling, which is the staple of your success. The following material is a culmination of tried and true efforts that have proven to be effective. Many of the techniques you are about to learn are useful as an independent sales agent or for a large sales force. Following a complete understanding of the concepts and techniques you will be successful in selling PDX ENTERPRISE SOLUTIONS.

Four Basic Steps “Selling” is getting a signature on the dotted line to “buy” your product. “Successful selling” involves focusing on your customer’s needs and providing the product or service that will fill that need. The process of successfully selling can be broken down into three basic steps. Retaining that customer’s business is the fourth step and the key to long term success in this business. 1. Networking and Prospecting Here you develop a variety of sources for qualified leads, otherwise known as “suspects” and “prospects”. Leads can come from various sources including your network referrals and cold calls. Turning a suspect into a prospect is a key turning point in making a sale. 2. The Selling Process The selling process consists of 4 aspects:

Engage – First we must learn how to approach our suspects/prospects. Different customers have different agendas and we must learn to adjust depending on their agenda, not ours. The goal of the engage phase is to gain permission for a Discovery Meeting. Discover – Once we have gained permission to talk with the prospect, we must determine their needs before a proper solution can be suggested. We can do this through the use of a Discover Matrix that we will look at later. Build Value – Once we identify the needs and concerns of the prospect, we can make a proper recommendation. We need to be able to build value in the products and services we are selling by showing how it will address their needs. We need to build value in ourselves and PDX ENTERPRISE SOLUTIONS by showing them what sets us apart from our competitors. Objections and how we handle them is a large part of building value. Gain Commitment – Once we have addressed all of the merchants concerns, built value in the product, ourselves, and in PDX ENTERPRISE SOLUTIONS, we are ready to gain commitment from the prospect. We should always ask for the sale here or re-visit any needs or concerns that may still be lingering.


3. Follow-Up Keep in mind that this merchant only knows PDX ENTERPRISE SOLUTIONS through you. Don’t leave them hanging. Let the customer know what to expect and where to turn with questions. Be sure to leave the customer with your card, important telephone numbers (i.e. your primary and back up contact #s, customer service #s, etc.) Let them know if they will be receiving anything in the mail and when to expect it. Also, provide them with the names, dates and times if someone other than you will be contacting them for training. A follow up call with the merchant is essential after they have received the product and/or training. 4. Retention Most “sales” people think their job is done with step 3. Custom care of your merchants is what will build and maintain a relationship with the merchant. Remember, the retention of the merchant’s business is a key factor in your residual growth. In addition, this relationship could pay off in future referrals and cross-sell opportunities. 1. Networking and Prospecting What is our sales objective?

• Increase our revenue by meeting all of the customer’s needs • Build customer loyalty by exceeding the customer’s expectations

Once we realize our objective, we can begin to build an existing foundation for recurring business and referrals. There are at least three important sources for referrals: Ask your current acquaintances. Your existing acquaintances are an ideal source of prospects. These may be acquaintances on a business or personal note. Don’t hesitate to ask them for the names of companies that would be interested in our products and services. If you are given a lead, ask your acquaintance if you can use his or her name when contacting the prospect. It adds authenticity to your approach, and prospects are always impressed if you mention the name of the person who gave you the recommendation. Ask non-competing sales people. Become acquainted with different suppliers and vendors in your area. For example, contact food wholesalers for restaurant leads or corporate offices for franchise locations. Ask them about new opportunities they have uncovered for their services and reciprocate by providing them with leads. Attend Referral Network Groups. Become a member of one or several groups. These groups consist of business owners or representatives from local businesses who supply each other with prospects and use each others services. Not only is it a great way to uncover great prospects, but you can obtain good deals on products and services you use as well. In order to be successful, you will need to have prospects coming from many sources. You will need an effective way of organizing and contacting prospects. Remember: Sales is a numbers game. The more prospects you have the more opportunities you have, the more sales you will close. It’s that simple. Your referral network will ultimately determine your level of success.


Gathering Prospects When we talk about prospects, what we are usually doing is gathering a list of suspects. We have already talked about networking with known acquaintances as an essential method of prospecting. Start with the obvious – people and businesses that you know:

• The dry cleaner, the hair salon or barbershop, your auto mechanic? • Do you know anyone who owns a business or is married to a business owner? • Who among your social contacts might own or manage a business? • How about business cards you may have collected?

Here are some other good sources:

• Chamber of Commerce meetings • City or county business license notifications • Yellow pages • Advertisements, newspapers, mailers • Realtors or leasing agents • Attendees at trade shows • Trade magazines • Alumni Association • Service clubs (Lions Club, Kiwanis, Rotary)

Once you have gathered a list of suspects, set up a plan to organize your leads.

• Set aside a time each day or week to work on your prospecting list. • Identify potential customers where your products and services can best satisfy their needs, wants,

and requirements. • Develop a prospect book divided into sections by Industry Type or by geographic location

Now, decide on the best method to communicate with the suspects.

• Sending out letters or mailers is a good introduction to your services and will “warm up” suspects for your phone call. The best time for your mailings to arrive is on a Tuesday, Wednesday, or Thursday.

• Develop a calling schedule. If possible, try to make calls between 9:30 and 11:30 in the mornings or 2:00 and 4:00 in the afternoons on Tuesday through Thursday. Don’t be shy about asking to set up an appointment.

• Develop a 30-60-90 day plan. Contact previous suspects that may have declined your services. Many factors affect a company’s needs and wants and they can change over time. Let the merchant know that you would like to check back with him at a later date.

Cold Calling is another tool in your arsenal to gather prospects. When cold calling there are several things to keep in mind to do this successfully.

• Keep organized. Always maintain solid lists of who you call. When you called them and exactly what happened in the conversation.


• You will always get large quantities of merchants who will ask you to call them back at a later time. Keep detailed logs of these call backs. The majority of your good solid leads will come from these call backs.

• Stay Positive. When cold calling you will be denied. You will have people be rude to you. You will have people hang up on you. Don’t let this lower your spirits. If you feel yourself start getting down, take a break. Remember it’s a numbers game. Every hang up is a step closer to a meeting.

When cold calling it is important to have a plan of action rather then simply calling and seeing were it goes. ♦ The first step with any call is to announce who you are and who you represent. ♦ Explain why it is your calling. What is your angle? Are you calling to save them money on the

processing? Are you calling to talk to them about gift/loyalty card programs. Are you calling to offer consulting services to help them lower their businesses overhead costs?

♦ Keep in mind that what you are selling is the ability to save money. Every merchant wants to lower overhead costs. If someone tells you they don’t want to save money or are not interested in your services it is an indication that they do not trust you. The difference between a sale and being hung up on is trust. Find a way to relate to who you are talking to and truly convince them that you want to help with their individual needs.

♦ Always work step by step. Don’t sell credit card services. Don’t sell equipment. Only sell an appointment. They may not believe that you can help, but they can at least give you a few minutes of their time to see if you can.

The first step in making a sale is turning a suspect into a prospect. 2. The Selling Process Here we will define and explain each part of the selling process previously mentioned.

• Engage • Discover • Build Value • Gain Commitment

Making sure that you understand and practice each component will allow you to enter into the selling process with a plan which in turn will give you more confidence in your approach. Remember, no two prospects will respond exactly the same. As you become more comfortable with selling, you will be able to adapt each component to fit you and your prospects better. Engage The first step in the selling process is to Engage with the merchant. You must first introduce yourself, introduce PDX ENTERPRISE SOLUTIONS, explain the purpose of your call or visit, and make it clear why the merchant should take the time to talk to you. This is not the time for presenting, or selling, or even discovering needs. The goal at this stage of the sale is to bring the prospect into the open and gain commitment to a Discovery meeting. There are certain aspects of every greeting which should be in place to enhance the rapport, trust and credibility that you want to start building with the prospect. These aspects include:


Using their name – Everyone wants to feel special, everyone wants to feel unique. How many times have you been introduced to someone with whom you have a conversation and then you wonder if the person will remember your name? Try to use a person’s name at least 3 times in the conversation. Be sure to use their name the way it was introduced to you. If they say their name is Bob, call them Bob. If they say their name is Bob Smith, call them Mr. Smith unless they indicate otherwise. If the name is unusual, ask them for the correct pronunciation and then make sure you pronounce it correctly. Confirming the Introduction – Let them know why you have called – someone gave you their name, you are following up on a mailing, or you are calling on merchants in that area. If the merchant was referred to you, give them the person’s name who gave you the referral. This will make for a warm introduction and the prospect will be more willing to enter into the Discovery phase. Gain Permission – Always ask permission before moving into ANY step. The prospect should ALWAYS have the opportunity to let you know when and if they are ready to move on. Make sure that this call is at a convenient time for them. By asking permission we gain points in trust, credibility and rapport. Serve – Let them know that you are here to serve THEM. Demonstrate this by making sure you have their permission to ask questions about their needs – but resist the temptation to begin selling Transition – a prospect must know what’s in it for them. If you let them know that their needs are your top priority that help PDX in making recommendations, they will be more likely to open up to you and help you make an assessment during the Discovery phase. Make sure that the prospect knows that the focus is on them, not on your product. Many times this will only be a prelude to the Discovery meeting rather than moving directly into the Discovery during the initial call. Your prospect’s time is valuable. Therefore, you want to take that into consideration while using these tools. Utilize the introduction time wisely. Many people use the “30 second elevator” techniques. Visualize you and your prospect in an elevator. He has agreed to listen to you until reaching his destination floor. Create a 30 second commercial using these important tips. Remember to give enough information about yourself, PDX ENTERPRISE SOLUTIONS, and the products/services to entice your prospect to want to talk with you further.

• Smile – even if you are on the telephone. Your prospect should be able to “hear” your smile or see that you are happy to be talking with him/her.

• Introduce yourself and, very briefly, your company. Be very careful to enunciate your name and the name of your company. Since you know what you are saying and you say it all the time, you may get sloppy. Make sure it is clear to someone who has never heard it before.

• State the reason for your call, including the benefits. Do you talk with strangers if you don’t know why they are calling? Tell the person how he/she will benefit from the call.

• Ask if this is a good time to talk. If not, get a commitment to talk later at a specific date and time. • Don’t respond negatively even if your prospect does. You may have caught them on a bad day or a

bad time. Stay friendly. This will help you avoid feeling rejected or angry.


Discovery By now we have gained permission from our prospect to proceed to the discovery meeting. Our goal is to align and uncover the needs of the merchant and determine a recommendation. It is also imperative at this point to ensure that we are heard. Too often, overeager sales people rush at the prospect with a particular product or service and lose the sale, simply because the customer had something else in mind. The information gathering stage is essential because it allows you to uncover your prospect’s needs so that you can suggest products to fit those needs. Let the merchant tell you what he or she wants to buy. Once a prospect has agreed to meet with you, it is safe to assume that he/she is interested in something you have to sell. The Discovery phase begins with asking some probing questions. Why ask questions?

• To establish an atmosphere of control. You know the questions to ask and can keep the focus on the discovery meeting

• To determine the customer’s cooperation. Paying attention to the detail of the responses to questions will help you determine if the merchant is excited about meeting his needs or just being polite.

• To determine the knowledge level and opinions of the prospect. The first few questions should tell us on which level we should be speaking and how much detail to discuss. In addition, you can rule out or focus in on certain products by getting their opinion.

• To save time on proposals. You can save a lot of guesswork when it comes to making a proposal and make the decision much easier for the merchant by properly identifying and addressing their needs with the proper solution.

• To build Trust and Rapport. Your questions are an indication that you are TRULY interested in determining their needs and finding a proper solution.

What format should I use? There are two basic types of questions that should be used. This will make sure that the merchant has the opportunity to tell us all of their concerns and ensure that you fully understand. The two formats should be:

1. Opening questions – these should be open-ended questions which cannot be answered by one or two works. Key words to being these sentences may be “Tell me about…” This should be the first question you are asking. Keep in mind; you should really give a reason why you are asking questions. Generally, the prospect will know it is because you are trying to find a fit between your product and their need, but it is not always that clear. Give the merchant a reason to answer the question completely and thoroughly. For example, “Susan, to see if our service even makes sense for you, tell me about how…”

2. Clarifying questions – these should be closed-ended questions that you will use to eliminate assumptions. They can be used to help a merchant frame a response. For example, “If you were choosing the 3 things most important…” Be sure to allow silence after each question to allow the prospect time to think. They will eventually say something. When we don’t allow silence, we are saying “My talking is more important that you giving me an answer.” Don’t offer answers. They will generally agree with you but will feel like you really don’t want to hear what their need or opinion is because you already have your mind made up about what you want to sell.


Keep in mind that you should never try to sell during this phase. If you do, you have not uncovered and understood all of the customer’s needs and concerns. This could hurt your trust and credibility. Also, know what questions you want to ask before your meeting. Looking unprepared can also hurt your credibility. Discovery Matrix Seven different areas have been identified in which we need to target our questions to get the pertinent information needed to make an appropriate recommendation. These have specifically been geared to the bankcard industry. Although these pieces of information need not be obtained in any particular order, it is important that all areas are covered. Category Examples Current Equipment

Tell me about the equipment you currently have? What are some of the special features that you like and some that you would change?

Business Profile

Type of Business? Mobile? Internet? Type of Customers – consumers or businesses? What card types are accepted? How many locations?

Volume Total sales? Credit card sales? Average ticket? Number of transactions? Plans Do you plan to add additional locations? When or how? Web-sites? Current Vendors

Who is currently handling your processing? Why have you not taken cards in the past? What are your current costs? Special Software?

Decision Maker

Will anyone else be involved in determining the services? Any one else to include in the meeting? Who will sign or need the application?

GAP Questions

Do you have additional fees or hidden charges? How do you do your reporting for your 3 locations? Is your software prompting you for additional info on these cards?

1. Current Equipment – these responses will help us understand what type of equipment they have, is it

ready to be replaced, upgraded, what features they like. 2. Business Profile – this can open a whole world of opportunities. What types of services? Method of

doing business (card present or not present). Who are his customers (consumer cards versus corporate cards). How many locations and how many employees will need to be trained? All of this will help determine the paperwork and underwriting concerns, special software prompts, rates, etc.

3. Volume – this will also help determine the pricing and how the merchant will fit the Underwriting Guidelines.

4. Plans – this will help select the proper equipment and services that will help the merchant down the road or with cross-sell opportunities.

5. Current Vendors – this will let you know who the competition is to be able to point out the features and benefits that you can offer that their current vendor can’t. It may also indicate why the merchant is looking to make a change, for the good or for the bad. If they have not been accepting cards, this is a good opportunity to point out the benefits of taking cards and processing through PDX ENTERPRISE SOLUTIONS.

6. Decision Maker – you can talk and listen until you are blue in the face but if it is not with the right person it may not matter. Don’t belittle the person that you are talking with, but let them know you would be happy to explain this to another person instead of that being on their shoulders. Just ask if there is someone else who will take part in the decision making who should be a part of the conversation.


7. GAP Questions (Get At the Problem) – these questions can led the prospect to realizing some underlying concerns or needs that may not be immediately apparent. By making some suggestions of things they have not thought of it shows you are really in tuned to helping them.

Build Value We have uncovered the merchant’s needs and concerns. It is now time for us to determine a proper solution for the merchant and build value in that decision. Obviously, what we build value in must reflect the concerns and needs uncovered through the Discovery. There is not point in building value around something that the merchant never discussed or, worse yet, is contradictory to what the merchant explained. This shows whether or not you were paying attention, truly have the customer’s needs in mind, and exactly how the customer can trust you. There are 4 ways to Build Value:

1. Benefit Statements Keep in mind the merchant is always asking “What’s in it for me?” (WIIFM). When we buy Certs mints, we are not buying them because it has “RETSYN”. We are buying them because Certs gives us fresh breath. The Retsyn is the feature of Certs, the fresh breath is the benefit of Certs. Focus on the benefits, rather than the features of the product or service and of you and PDX ENTERPRISE SOLUTIONS. The benefits must be relevant to the merchant’s needs uncovered during Discovery. 2. Examples Use success stories from past sales or similar situations. If you have none, create a visual picture of what their business will be like with you and your product. Create the need in the mind of the merchant that they want to be part of that successful picture. 3. Strong Statements Make a statement as fact. Be confident. Eliminate “maybe”, “might be” and “probably”. Don’t use words like “I think” or “I hope”. Use strong words and statements. “ I know”, “It will”, “I can” will build credibility much more effectively. 4. Unique Customer Benefit What is it that sets PDX ENTERPRISE SOLUTIONS apart from the other processors? Why are YOU so special? What can you offer the merchant that no one else can? Handling Objections As with any sales position, there will occasionally be objections to deal with. In many cases it is not truly an objection but a need for clarification or further value. It is important to handle an objection properly the first time. This can be done by watching “CBS”. Clarify that you understand their concern to ensure that you respond properly Build Value in the feature and benefit that will address that concern most effectively Six (Check your Six) from the military term that means to make sure your wingman is with you. Make sure that the customer understands what you have explained and that the objection/concern no longer exists.


By addressing the issue and re-building the value properly, you should be able to move forward to gain a commitment or handle another objection. This could be an ongoing process, until there are no longer any concerns left for the merchant. Tip: the more thorough the Discovery meeting the fewer objections there will be. Here are some other tips to handle or avoid objections: Acknowledge the customer’s point of view. Just because you acknowledge does not indicate that you agree with their point of view. It shows your interest in it. Prepare examples/responses for every common objection you may engage. This will help express your confidence in the value and will feed into your credibility and trust. Introduce common objections before they arise. Again, building on your trust, by letting the customer know about negative information or objections first gives you the characteristic of honesty. Summarize the customer’s MAIN concerns to avoid allowing minor concerns or trivial objections from getting in the way. Make them realize that their main concerns have been addressed.

Gain Commitment Once you have determined the proper fit and we have addressed all of the needs and concerns by building value and handling objections, it is time to close the deal. Just as everything else, the customer will drive this initially. You need to know what to listen for, when to speak, and when to ask for the sale. Timing is the most important factor, not technique. You need to know WHEN to ask for the sale as opposed to HOW to ask for it. Recognize when the prospect is at the commitment level.

• Look for buying signals. They are frustrated with their existing service. They are asking questions about the paperwork involved. Or when they can be up and running.

• If you are unsure or not recognizing any signals, indicate that the time may be right. o Typically, the next step is to fill out the application. Is there anything else we need to

discuss before we do that? o If we get the paperwork filled out today, when would you want to be ready for the

training? Be proactive and set a specific goal for advancement. Every time you meet with or talk to a customer you should have a specific, reachable goal in mind. Your goal may be to get check back after they have had time to discuss with another decision maker, or to pick up the completed application, or just to have a follow up meeting if they are not ready to make a change at this time. The merchant is always going to wonder if they are making a wrong decision. Your job is to reduce the risk to the merchant and make him/her feel as comfortable as possible about the decision. Providing references of satisfied customers is a good way for the merchant to feel satisfied with the decision. If price is an objection, there are two things that can be done. Either lower the cost or increase the value. No one wants to lower the cost since this will affect the potential commission you make. Wouldn’t it be better to increase the value of the product or service and show the maximum return to the merchant? What are you saying about the product/service or yourself if the price is lowered? Helping the merchant to visualize what their business would be with or without the product will give them a clearer picture of the value regardless of the cost.


After spending this amount of time and building this type of rapport, never erode the foundation you have built with the prospect. In other words, don’t put the customer in a win/lose situation by forcing them to make a decision before they have all of the facts and before all of their questions and concerns have been addressed. Confirm the commitment with the customer. Let them know what they have decided and what the next steps will be. Use definitive words like “I will be back tomorrow to pick up the voided check and Articles of Incorporation.” “You will receive a call when your equipment has been shipped.” Be sure to provide a warm and sincere thank you to the customer for their time. Congratulate them on their decision, make them feel as if they have made the best choice possible and they have a great business sense. 4. Follow up Don’t abandon the merchant. Let them know they have somewhere to turn until they are up and running. Provide phone numbers to the merchant in case they have any other questions. They may need reassurance of their decision and to know that you are keeping your commitments to them. Once the customer has signed, the sale is not complete. Your commissions will not begin until the customer has been approved and installed. Here are some things to do to make sure that your customer is happy.

• Be sure that the application is properly filled out and complete. There is nothing more frustrating than winning a hard-fought sale only to have the application needlessly pended or returned to you. Make sure that the merchant provides all information and documents to you. Continually having to contact the merchant with more questions is a sign that you were not fully aware of your job. Many sales have been lost this way.

• Make sure that you explain a timeline to them. Tell them how long to expect for the underwriting process, when to expect deliveries of equipment or welcome kits.

• Follow up on deliveries. Check with the merchant to make sure they received everything that you told them would be coming. Don’t wait for them to call you to complain.

• Follow up on training. Whether you do the training yourself or someone else trains the merchant, make sure you know when and call the merchant within a day or two after that. Make sure that they were trained on the features that you specifically discussed as having the greatest benefit to them.

• Don’t strand the merchant. Make sure the merchant has a point of contact after you leave. He should have your number, a Customer Service phone number, and an open door to call any time with needs or concerns.

5. Retention Congratulations on selling successfully. Be sure to congratulate the merchant again for making a good decision. Sending a personalized letter or thank you card can go a long way in making the merchant feel as though you have not left them. You don’t want to be known as just a sales rep who “disappeared” after the sale. The merchant is now a part of your family (not to mention your commission). Begin to build that long term relationship immediately.


A good time for a first retention call is after the merchant’s first statement. Make sure they received it, know how to read it, and are pleased with what they see. Ask if they are feeling comfortable now with the new equipment or feature they have. Keep a database of all of your merchants that includes their contact information, date of approval, and the products or services that they originally signed up for. Over the course of the lifetime of the merchant relationship, use this information to:

• Send birthday cards, holiday cards or gifts. Let the customer know that they are thought of during the year and that you continually appreciate their business.

• Send a letter on the anniversary date to thank them for the past year of business and to let them know you are looking forward to another year.

• Include them in mailers that you may do on new products or services if it is something that fits their business. Be careful not to solicit for cross-sell opportunities for a product that the merchant already has or does not address a need. This will leave the merchant thinking you really don’t know who they are and your mailers will just become junk mail to them.

• Make a personal phone call or visit to the merchant at least twice a year. Keep it light. Maybe just ask them if there are any supplies that they need or how their business is running.

• Make a point to check your management reporting to be able to comment on how their sales have grown, or what trends you are seeing in their volume. Remember, increased sales mean increased commission. Decreased sales may mean you about to lose a merchant.

Building a long term relationship with your merchants will ensure that they will call you if competitors come calling or they have additional needs. A happy, satisfied merchant is also more willing to give your name as a referral to fellow business owners or their names to you. As stated at the beginning of this chapter, your referral network will ultimately determine your level of success.


SECTION 12

Getting Started


Welcome & Let’s Get Selling! We here at PDX Enterprise Solutions are very excited that you have successfully joined our team. We look forward to building a long and mutually beneficial working relationship together. We know that the hardest part of any new job is the start. How can you start closing deals and making money? It is very important to us that you are successful from the start and feel good about what you are doing. Guide to Getting Started Step One – Learn. You will not know everything there is to know about this industry now. After ten years you will still not know everything there is to learn. Yet you can learn as much as you can now. Go over the training documents on our Agent Portal website. We built it for your success! Really try to soak everything in and take from it what you can. Is there something you are more interested in or do not understand completely? Contact agent support at PDX. We are always happy to teach you anything and everything you would like. Step Two – Dream. What is your long term goal? Is your goal to start your own processing company? Is your goal to make a few extra bucks here and there? Do you want to acquire enough residuals that you can retire? Do you want to sign 5 merchants a week? Make short and long term goals for your self. What do you want out of this experience? Step Three – Plan. How can you go about making those dreams come true? What work has to be done to make that happen and plan for it? Create a routine. I will look for prospects between 9am and 11am. Afternoons I will go to scheduled appointments. From 8am to 9am I will study about value added services. Sales is always a race against time. So make sure you are using your time wisely. Step Four – Prospect List. The easiest way to get a sale is by using the network you already have. Know a business owner? Shop at a certain place regularly? Use who you know? Create a nice list of merchants you can approach warmly. This is the best way to boost your confidence and get yourself your first few sales. Step Five – Organization. You can start by dedicating a space for yourself to work in. Whether it is an office, a desk or a corner table in a room; make it your dedicated work space. Dedicating s specific work area makes you feel “in the mood” to work. Sales is all about how you feel. Next is tracking your sales pipeline. Merchants who you speak with will begin to pile up very quickly and they will all be at different stages. You need to be organized to maximize your chances of turning prospects into sales. We provide you free of charge Sugar CRM. It is a program designed for the purpose of tracking any and every merchant from the first call to managing your portfolio of accounts. For more information about Sugar or help using it visit the PDX agent portal or call agent support. Step Six – Adapt. Anything worth doing is not easy. The secret to this industry and most business is hard work and ability to adapt. Working hard is the first step but if you are working hard and still not seeing the results that you want its time to adapt. Change what you are doing. Use a new approach. Ask for help. PDX has professionals with years of experience in this field and are there to help you. If you feel like you are walking against a wall then use the expertise of someone who has years of experience and has had to overcome the same issues as you. A GOOD MAN LEARNS FROM HIS OWN MISTAKES. AN INTELIGENT MAN LEARNS FROM OTHERS.