Why The Financial Service Industry’s ‘Arbitration Boom’ Is Here To Stay

Arbitration has been gaining ground as the preferred method of dispute resolution in the financial services sector for years now and there is very little reason to think this trend will change. With the ongoing turmoil with government-funded programs such as Social Security, the continuing abandonment of old-style pensions and the resulting sharper focus on retirement and wealth-building, the financial services industry is itself experiencing a boom. The higher volume of clients and the larger volume of monies being managed inevitably brings a higher number of complaints and conflicts. The Financial Service Industry has found arbitration to be a superior choice to litigation for the same reasons as small business and individuals, and as a result arbitration is set to become even more common in the future.

The Benefits of Arbitration

The Financial Service Industry has found arbitration to be a better choice for three basic reasons:

Arbitration is Faster.

A recent international study has found that the average length of a civil trial is two and half years, while the average length of cases decided via arbitration is just 8.6 months. While there will always be exceptions to the rule, in general arbitration will always be a faster and more efficient solution.

Arbitration is More Affordable.

In part due to the speed of the process and in part due to the streamlined nature of the process – excluding much of the legal sparring that is involved in a lawsuit) – arbitration has less costs associated with the process than litigation. No matter what the actual costs of the arbitration process (the arbitrator’s fee, lawyers’ fees, room rental, etc.) the speed of resolution always results in real savings.

Arbitration is Friendlier.

The key word in ‘Financial Service’ is service. The industry has customers and clients, and as such has a stake in maintaining an amicable environment. Arbitration gives a sense of control to both parties and focuses on mutually satisfactory solutions to conflicts.

These three reasons point to a growing use of arbitration in the financial service industry. A final consideration is the cluttered state of court calendars; the delays between filing a lawsuit and actually getting a court date continue to widen, and even when a proceeding is begun continuances can sometimes interrupt court dates for weeks or months. This can only exacerbate what is already a painfully slow process and drive even reluctant parties to consider the speed and efficiency of the arbitration process.

Break the Mold in the Service Industry – Create a Sense of Mission Which Drives the Company

The service industry is one where competition is high and fierce. Start-ups are fairly low in part because the majority of work is dependent upon the entrepreneur selling his or her skills. One major problem is that companies offering very similar or the exact same services often times are weakly differentiated when it comes to what they offer. They may state that their service is superior over their competition. What does this really mean? Having that as the separation between you and your competition will only make it harder to win the contract.

Companies that are recognized for their innovation, creativity, and passion are ones that have a sense of mission. It is not enough to just have a mission statement where you state your goal of the business. These days, you have to win people’s trust on a global scale. How do you do that? Find something that you and your company want to fight for. Whether it is to improve the environment, help the orangutans, or end starvation, your company must be driven through that sense of mission. By doing this, you set the company apart from the competition immediately. It is also clear why you are in business- and it is not just for the money.

A great example of this is Tesla Motors. They are a new auto-maker started in Silicon Valley. The company’s mission is to make exotic, super cars that have zero impact on the environment. They are out to prove that electric cars can be just as powerful, if not more powerful than their gasoline cousins. Through this sense of mission, people who want an alternative to gasoline vehicles and believe in helping the environment and understand the company’s stance on environmental issues. This creates a connection between the company and customer. As the company further markets their stance on the environment and how their products help it, people will start to believe more in the company and be more willing to purchase their products.

Business Services Reviews – Why These Are an Invaluable Service

Business Services Reviews can be an important tool for you and your business. Many people fail to realize the value of quality reviews. This is a mistake as good reviews of products and services can help you decide quickly which are the best products and services for a particular niche. This can be a significant time saver that allows you to spend less time researching and instead move directly to reading the decision and buying phase.  

In addition, the best review sites will look at all top products in an industry so that you can get a complete picture of what is available. This allows you to decide which company offers the best service or product for your company. Also, it gives you peace of mind and contentment with your decision knowing you made a reasoned decision that has been supported by independent review. This is very beneficial as it helps negate the risk of buyer’s remorse and allows you to immediately get back to your business.

Whether you are the owner, executive, or purchasing agent for your company, knowing where to find good reviews should be a part of any of your buying decisions for business services. Sadly, there are too few review sites devoted to business services. This is one reason why it is important to zero in on the few that offer this great service. Also, when reviewing these review sites be sure the information they offer is comprehensive. The best review sites will offer information such as the facts, company profiles, product or service descriptions, benefits, drawbacks, customer comments and even their own personal review. This is important because it makes sure you are getting quality information that you can use and rely upon. Also, take a look at the number of products reviewed. The more products or services reviewed adds more credibility to the site as this shows they are more interested in providing you with quality review information.

Beyond these tips, you will find that some sites do deliver quality business services reviews. Once you find these sites, bookmark them and visit them periodically to help with your buying decisions for your business.

Merchant Services Industry Undressed – Swipe Secrets Revealed

DID YOU KNOW THAT THERE ARE 16,000 COMPANIES THAT OFFER MERCHANT SERVICES AND THAT 99.8% OF THEM ARE RESELLERS?

That’s right; there are approximately 16,000 companies that offer MC/Visa Processing in the US. However, less than 20 of them actually do the processing themselves. So when I say 99.8% are resellers that is, unbelievably a conservative number. (The actual figure is 99.875%). It doesn’t take much to figure out that (follow me here) many of these resellers are reselling for a company that is already reselling. In fact, there may be as many as five companies between you and the actual processing company.

The biggest misconception in the marketplace is the idea that your local bank processes credit card transactions. With the extremely rare exception they do not. To simplify things, your Bank is in the business of opening accounts and lending money. Just about everything else they offer; Merchant Services, Payroll Services, Identity Theft Protection, Credit Report Monitoring, etc. is all farmed out to the actual providers of those services. This allows the bank to generate income from multiple sources and develop stronger relationships within their community. It makes sense, doesn’t it? After all, hopefully you are banking with an organization you know, like and trust.

For some, the convenience and piece of mind are worth the extra costs associated with finding a provider yourself. The problem is those added fees continue to accrue for years. Over time, you may end up paying thousands of dollars to avoid what might only turn out to be a couple of hours of simple industry research.

However, the Merchant Services Industry is so incredibly over wrought with resellers that finding quality information is near impossible. What makes matters worse is the underlying negative affect this distribution model has on the actual merchants accepting credit cards for payment of goods and services.

Think about it…

A processor that engages an Independent Sales Organization (ISO) to sell their services for them has a vested interest in the success of that ISO. In other words the ISO becomes the customer. The ISO is exponentially more important to the Processor than the small business owner accepting Master Card and Visa transactions. In fact, for all intents and purposes, that Merchant will never matter.

This is the basis for all of the problems in the industry. Unfortunately for small business owners, the “horse is out of the barn.” There is no shutting this puppy down.

For the last few decades everything in this industry has been set up to help the ISO at the business owner’s expense. Here are a few examples:

1. Equipment Leasing: Many of the ISOs thrive on equipment leases. The worst example I have ever heard of was a small business owner, right here in New England that leased a $400 (wholesale cost) terminal for $99.00 per month for 16 years, (or $19,008.00). Today, the wholesale cost on most analog terminals is around $250.

a. Note: If you are considering an equipment change I recommend a dual/com terminal to take advantage of the internet for faster transactions. They cost a bit more (about $400) but often allow you to eliminate a costly business phone line.

2. Three Tier Pricing: Most small business owners are set up on a plan that bundles all transaction types in to three categories: Qualified; Mid-Qualified and Non-Qualified. However, there are no strict guidelines for classification. In other words what is a Non-Qualified transaction for you might be a Mid-Qualified transaction for someone else. Some ISO’s are actually adding a fourth tier.

3. One Standard Rate: I am sure you are bombarded by sales professionals offering you some new great rate for your Visa and MasterCard transactions. Did you know that Visa is actually less expensive to process than MasterCard? Did you also know that on average, a small business owner will accept Visa 60% of the time and MasterCard only 40%? If you are paying the same for MasterCard and Visa then you are giving money away every single month.

Unfortunately, this is just the tip of the iceberg. In subsequent articles I will share with you more information to help you better understand an industry that is vital to your success. Accepting MasterCard and Visa is no longer an option, or a luxury. I assure you there are things you can do to get the absolute most out of your Merchant Services for less than you are paying now. Simply learning how the industry works and the steps you can take to control your costs will help you better understand your options going forward.