If you were a reseller of any of the POS products Digital Dining, Dinerware, pcAmerica, or Xpient, you became a part of Heartland Payments – now Global Payments – after the string of acquisitions from 2015-2017. For many resellers this meant their businesses changed substantially.
Now that the dust has settled some Global Payments resellers are questioning the aftermath on their business model. While none were irate about their current situation, they were curious about Global Payments’ policies.
For background, resellers under the Global Payments umbrella now fall into a number of tiers (black, blue, green and red), each with their own benefits. What has irked a few of the more performant resellers has been their inability to sell processing directly.
“When I sell a POS today I have to pass the payments portion of the deal to a direct payments rep for Global/Heartland. I still make revenue share if the payments rep closes the deal, but I’d make a lot more if I did the deal on my own paper,” explains one dealer.
When we asked another reseller what their current payments revenue was they said it was $20 per month per site and $0.02 per swipe.
On an average deal we’re seeing $50-$80 per store per month, but we know that everyone up the Global ranks is getting their piece, too.
Similarly some of the the direct payment reps feel the same way, though about POS. “We should be able to sell and support POS directly on our deals instead of referring the POS deal to a reseller,” commented one direct payments rep.
Why does Global seemingly keep lucrative payments residuals from their highest cache of reseller? And why can’t their direct payments reps sell POS themselves?
The answer is experience.
It won’t surprise our readers to learn this, but selling (and supporting) POS is a much different process than selling (and ignoring support for) payments. By keeping some walls up Global might actually be playing a smarter long-term game.
“What you’re hearing is certainly a small minority,” says Andre Nataf, Global’s SVP of Channel. “We have over 275 dealers and the current model works for our majority. If the model were so unworkable why would these resellers stick around?” Andre goes on to explain that Global’s current model is in the merchant’s best interest 99.9% of the time.
We do not block or force our merchants to do business with any of our dealers or payments reps. But we believe that if we can show merchants the highest possible value in one of these categories – whether it’s POS, payments, payroll, or another product – they’ll be inclined to turn to us for their other needs.
We continue to find that merchants have the best results when they’re being serviced by an expert that can provide that local, consultative experience. And since it’s hard to be an expert in everything that means having dedicated divisions serving a merchant’s disparate needs.
There are undoubtedly the outliers that can do POS, payments and other products well, but they’re a very small minority – probably < 1% of the resellers out there. If this was you, then we could understand how you might feel there were some missing upside. “It’s unnerving to see dealers who are less successful than us making more on payments residuals because they’re not following the Global referral model and instead refer their own payments,” these cohort of dealers agreed.
For the 99%, Global’s model as designed might make the most sense. But for the top performers, it’s understandable how there might be kinks to yet work out.
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