When merchant level salespeople speak of value-added services, they typically mean enhancements relating to payment acceptance: e-mail receipts, remote deposit capture equipment, Web-based loyalty programs – you name it.
A company called National Benefit Programs provides services to merchants that have nothing to do with POS systems; they are nonetheless a potent way to acquire and retain merchant accounts, according to the service’s providers. NBP offers basic consumer benefits, purchased in bulk and sold at heavy discounts. Among them are dental, legal, vision, prescription drug and chiropractic services.
Sold exclusively through ISO channels, the services are provided to business owners – and their immediate families, if applicable – on a monthly, unsubscribe basis for prices NBP Chief Executive Officer Mark Zisholtz called “unbelievable.”
“We wholesale discount consumer benefits and have aggregated seven core benefits with the intention of reducing merchant attrition, attracting new business and increasing revenue [for ISOs],” Zisholtz said. “These are benefits that are very expensive to buy on the outside, but we’re buying in unbelievable mass bulk, then turning around and selling it on a tier one level – meaning it cannot be bought less expensive anywhere else.”
Zisholtz said the services can be not only a source of extra income for their vendors, but also an excellent way to increase stickiness because merchants can’t receive them except through their relationship with the providing ISO.
“These are incredible discounts merchants receive, where if they acquire this in the open market the price is not even close,” Zisholtz said. “ISOs need ancillary products to increase revenues, and we believe that in this type of economy, we’re the perfect solution. We provide a benefit that merchants need and will use.”
Zisholtz said the services all provide comprehensive coverage and are provided by large and reputable providers. He said, for example, that NBP’s legal service gives merchants access to a network of over 20,000 attorneys who have an average of 19 years’ legal experience.
He added that legal services rendered cover almost every imaginable business expense, at a rate of either 40 percent off the attorney’s customary fee or $125 an hour – depending on the specific arrangement. Regarding the dental program, NBP is contracted with Aetna Inc., which Zisholtz said is the largest provider of dental insurance in the country.
“The legal service covers all business issues and landlord/tenant issues,” Zisholtz said. “There’s also a host of free services that come along with just being a member of our program. For example, attorneys will review leases and certain documents, including collection letters, for free.”
Zisholtz said ISOs could only sell to business owners and not their employees, but that the service does include a “secondary sales” referral program for ISOs whose merchants refer NBP to other clients.
“If the merchant comes up to the ISO and says, ‘I would like to provide this to all my employees,’ the ISO will say, ‘Contact NBP,'” Zisholtz said. “If we make a sale … we will give the ISO a percentage.” Zisholtz added that ISOs receive a base payment from NBP for every sale, plus whatever markup they make on the products sold – which Zisholtz said typically entails a 100 percent profit or more. “They’d be crazy to sell it for any less [than twice the wholesale cost],” Zisholtz said.