James Huber Special Guest on B2B Podcast | The Landscape of Point of Sale Has Changed

In this episode of Biz to Biz Podcast: The Green Sheet Street Smarts Edition, host Allen Kopelman is joined by legal expert James Huber of Global Legal Law Firm to discuss the evolving world of point-of-sale (POS) software and payment processing. As private equity firms acquire software vendors, the battle over payment revenue is intensifying—often leaving ISOs, agents, and merchants scrambling to protect their residuals.

Allen and James dive deep into the risks of working with agnostic POS software, the legal protections businesses should consider, and the strategies to safeguard revenue from sudden shifts in the industry. Whether you’re a merchant, an ISO, or a payments professional, this conversation is packed with insights on how to navigate a market where software providers are rapidly consolidating and reshaping the rules of the game.

Tune in to learn how to protect your business, secure your revenue streams, and stay ahead of industry changes.

Allen Kopelman (00:00):

Welcome to the Biz to Biz Podcast, your number one source for all business news. Hey everybody, welcome to B2B Vault, the Green Sheet Street Smarts Edition. And today I have one of my favorite guests that I like to talk to. James Huber from Global Legal Law Firm in California. Welcome to the podcast, James.

James Huber (00:21):

Thank you. My pleasure. And the feeling is mutual. You always have a good deal of fun on these things.

Allen Kopelman (00:27):

Yeah. So today we’re going to talk about an article that I recently wrote that appeared in the green sheet called POS Partners, antagonist Agnostics versus Antagonistic. So the basis of the article was talking about how the landscape of point of sale has changed and the landscape has changed because a lot of these point of sale companies, the actual software has Rocky, has something to say about has been acquired. And first thing these PE companies private equity do is they come in and they want to grab the payments revenue. So we’re here to talk to James about is there to protect yourself, is there a way to protect yourself? I can tell my story a little bit about what’s happened to me and other people that I know and the business and let’s dive into it.

James Huber (01:34):

Yeah, I mean this topic when you hit me up is very near and dear to me because it’s a humongous pain point for us because we went through the same thing with our law firm software, our case management software, how we keep our time and all of that. I don’t know if they got purchased or whatever, but they partnered with somebody and they said if you are to run, you keep using QuickBooks to integrate with your trust accounting, which is somewhat important to attorneys. It’s basically the only thing that will get us disbarred is messing with our trust accounts. If you’re going to do that, you have to use our payment processing software and it is awful. It’s expensive, it’s Stax, which is a huge company and they’re awful. I’ll give you an example.

Allen Kopelman (02:23):

Yeah. Stax recently I think was acquired by Pit, by Priority.

James Huber (02:29):

Perfect. Good company. Both awful, so just kidding. I like everybody except for stacks. So for example, we wanted to surcharge and we know a thing or two about surcharge and we go, great, we’re going to do a 3%. We’re not doing debit cards. That’s the easiest way for us for to dual price. We’d have to probably dual price every single entry. It would just look like a mess anyway, so we’re going, we’re going to do 3%. They go, okay, we can’t do that. It’s going to come out to roughly 3.38 to 3.56%. And I dunno, Jeremy’s on here too. He is handling our mics and stuff, but he was dealing with it and we’re going, you can’t do that. That’s not compliant. And your stacks, you’re one of the big boys and you are saying you can’t do it. So here we are, we’re stuck in this situation that from your audience’s perspective, they get the pain points. But I’m a merchant here going, I’m getting screwed because you guys decided to partner with a really bad company.

Allen Kopelman (03:35):

Well, usually the way it works just so you know, is we’ll put 3.5 into the machine or into what you’re charging, but then on the backend you take out a little less so balance so that for some reason that’s how it balances out.

James Huber (03:51):

I don’t know what they’re doing,

Allen Kopelman (03:52):

But yeah,

James Huber (03:53):

I know from your perspective, I was interested, you kind of went into in the article, but I want to hear the dirty. I want to hear the dirt.

Allen Kopelman (04:01):

I mean the dirty part is, so the first incidents for us was Mercury came on the scene. Mercury came on the scene, and with the help of Data Cap, they partnered with every single ISV restaurant software, retail software. And then they basically start, the dealers all started making money off credit card processing. We started to see accounts disappear. I personally made a move to selling a lot more B2B and a lot more internet at that point, but we had a big portfolio of restaurants. The next thing that came along was EMV in 2015 when these point of sale companies had to put EMV into their point of sale, the first thing they did is make it so that all the EMV, the only way you could get EMV as the merchant was either a side machine or B, use the provider they’re telling you that they chose.

Allen Kopelman (05:06):

Then we saw a whole nother group of merchants disappear, and then you have Shift Four goes out and purchases a long list of point of sale, PAI Touch, I think Focus or Future Restaurant Manager, a whole bunch of other ones. They just recently purchased Givex. I heard here Lightspeed is on their radar right now who basically they got acquired by a PE company and they switched all the credit card processing to Stripe, and we lost a bunch of merchants to that too. And when Shift Four bought all those pos, we just started seeing our customers. Now we went on the offensive At that point, we partnered with I three vertical. We became a reseller of their product that they offer over there, which is called one POS, and we started going after all our restaurants and saying, Hey, why don’t you get one POS? Because now we have a product, we have the point of sale and we have the processor together.

James Huber (06:22):

Yeah, that’s

Allen Kopelman (06:22):

Great. We know those accounts are not going to disappear. We made that move and that pretty much saved a lot of business and we stole some business also because we’re like, if you’re raiding us, we’re raiding you. But we lost a lot of business. I mean, I don’t want to get into it, but tens of thousands of dollars. I have one friend of mine, he lost so many accounts. He had bought a big boat, like a mini yacht. He had to sell it, how much residual he lost. I have another friend of mine who told me that he lost over $80,000 a month

Allen Kopelman (07:01):

Because the point of sale got sold, the dealer got acquired also by Shift four, they switched all the merchants. I mean, I’ve heard three or four stories from agents to the point where they either got out of the business because they lost so much residual income. There’s nothing you can do because ultimately they either had a deal with the dealer on a handshake or a written agreement to pay them some residual. And that company, those companies got acquired, the software, the dealers, they get acquired, and then obviously the companies making the big investment want those payment dollars.

James Huber (07:36):

Yeah, I’ve seen it going on for years with Card Connect. I know that Card Connect was the home for a lot of the ISVs, the independent software vendors. For whatever reason, they captured Card Connect and no one’s really been able to explain to me why they’re so great for the ISVs, but I’ve seen a bunch of, so I’ve got my client to Card Connect, ISV, and then another card Connect, ISV kind of conglomerate come in and buy all of that dog software kennel software, and they’ll flip it to their own card Connect. So if it goes from Card Connect to Card Connect, and I’m looking at the agreements and it’s going, look, I’m supposed to get residuals for all of the merchants I bring to you that are on Card Connect. And so our argument with these, and it happened a handful of times, was they’re still on Card Connect and they’re like, well, it’s a different card Connect. And I’m going, Hey, the agreements, the agreement and actually got some decent results on that. But part of the thing too is we will get into of what the,

Allen Kopelman (08:54):

Is the software acquired or they just took the customers,

James Huber (08:58):

The software was acquired, they bought the software company. So we’ll get into it because there’s two sides to this. For the Shift fours, it’s kind of a different thing, but these people that are buying up software companies saying, I’m going to buy the processing, you’ve got to be careful because it’s two ways the iso, the guys like you and most of our clients are the ones getting screwed over by this. But if you’re buying this and you don’t know, you might not be able to get that software. And we’ll get into what I think people should do to prevent this from happening. I actually just had somebody contact me this morning. We were on a call about something else and they brought up and they said, Hey, you know what I’d like, I’d like an agreement where if one of our software partners gets into the business of payments, they can’t steal our customers. And I’m like, it’s so funny. You should bring that up because in about an hour, I’m going to go talk to Alan. And they knew who you were too. Huge fans. They’re like, yeah, what do we do? And we’re going, yeah, you’re getting into an agreement with any software company that you’re use that’s referring, you say, you can’t steal my business and if you sell, I’m still getting a piece of that. I’m still plugged in or I get a piece of the action. So when you’re doing the due diligence and you’re buying these companies up, I’d watch out for anybody that’s touched Global legal because it is going to get a little hairy.

Allen Kopelman (10:24):

Yeah. It’s a matter of if you’re going to do a deal with an ISV as an agent or your ISO and you are going to get into an agreement with an ISV, there’s definitely got to be some language in there to protect you so that if that company does sell, the payments that you’re running are still going to stay there and you’re still going to pay them no matter who the owner is, but they can’t switch those clients. And I think that’s super, super important. And we’re actually working on a couple of projects like that, and that’s in my notes. I’m like, yeah, we’re going to have to look at, we’re going to have to have a discussion because a three-way agreement between the ISV nationwide payment systems and the processor, and we’re going to have to look at that agreement and make sure that there’s a provision in there to prevent that from happening,

James Huber (11:15):

And you’re going to want it in your processor, or even if you’re a sub ISO or something, you’re going to want that in your agreement that if these are getting bought now, so priority owns a huge portion of this. If they get bought and they stay on priority, I’m still getting a piece of that action, and we were talking briefly before we started. We’re going, well, someone’s going to buy these up and they’re not going to honor that. Well, they might not, but if you’ve got a good claim for a huge ISV line, probably worth suing it, suing ’em over it if they’re just

Allen Kopelman (11:52):

Going to, well, that’s what I’m saying. I think you just have to look at the protections that you can put in the original agreement to say, okay, well, we’re going to have in the agreement that all the merchant, as long as we pay you, you can’t move the merchants. Even if you get acquired, you agree that this is staying in place. I think that’s the only thing that can protect you. But as far as if you’re using something agnostic, a B, C agnostic restaurant software, and that company gets bought up by somebody, you as the agent who’s been selling this stuff, even though you have an agreement with the ISV, unless there’s something in that agreement that says they’re going to leave your merchants alone, there’s nothing you can do.

James Huber (12:39):

There’s nothing you can do. They’re going to take ’em. I mean, aside from maybe trying to create a back door and sabotage their software because you’re integrated at some

Allen Kopelman (12:51):

Point, well, a lot of them do that. They’ll change the version, and that’s what Jared did at Ship four. Oh, you’re going to get the newest version of the software. Oops, only works with the Ship four gateway.

James Huber (13:02):

Right, right, right, right. Yeah. And they’ve closed off your access. Yeah, exactly.

Allen Kopelman (13:06):

Yeah. Or they say, sorry, if you don’t use processing with us, we can’t support your point of sale anymore. Merchants get those letters,

James Huber (13:15):

But if you’re a software company, you’d be an idiot to agree to it because this is one of the big value adds of what you would ultimately sell it for.

Allen Kopelman (13:25):

Well, they want the software revenue, so they’re going to take it one way or another. Oh, we upgraded the software. Oops. It only works on the shift four Gateway doesn’t work on tsys, doesn’t work on Worldpay, doesn’t work on First date anymore. Sorry. You have to connect to the gateway.

James Huber (13:45):

Yeah, best we can do. Yeah, that’s true. Yeah. I guess if they did that, but I mean you could sue them over that because that’s total bs.

Allen Kopelman (13:51):

Yeah, but it’s probably not a lot you can do as an agent. That’s my point

Allen Kopelman (13:56):

As the ISO ISOs need to make sure they have good tight agreements so that their agents are not selling stuff that could get ripped out from under them. But as an agent, if you’re selling agnostic software, let’s say you’re selling, you find some guy and he’s got a service pro software for air conditioning guides and you start selling it, a bunch of agents start selling it. Everybody’s on Facebook talking about how great it is, and all of a sudden this guy sells a couple of thousand softwares. He’s not getting any payment revenue. James Huber PE company comes along, whatever, says, okay, we’ll buy your company for $20 million, blah, blah, blah, blah, blah. First thing we got to do, integrate to Stripe. Let’s go. Bam, you’re done. Another thing they tell the merchants, oh, we upgraded your software. Click here to reconnect to payments.

James Huber (14:55):

Another thing to do another protection that I just thought of is put something in the merchant agreement too that gives the merchant some recourse. Because my experience of I’m stuck with stacks, I’m on Rocket Matter. You could put something in your merchant agreement that ties in the software vendor. The software vendor’s not going to sign off on it, but you’ve got something in there of, Hey, I get to use this with the software vendor. And that might create liability for you though. Yeah,

Allen Kopelman (15:27):

No, I think what they do to get around it is simply we upgraded the software

Allen Kopelman (15:33):

Deal with somebody the other day that had an old version of NCR Counterpoint. So we said to them, well, we can take you on as a client. We’ll upgrade you. You’re about eight versions behind, then you are now, you’re not going to be able to keep your processor because you’re going to get new software. You’re going to need new equipment. You have to link up to the right gateway. So you’re going to have to change credit card processing, whether it’s with us or not with us. If you do it with us, if the support contract is X amount for year, if you do one other thing, it’s another thousand bucks. So why are you going to spend another? That’s how it goes. And whoever their dealer is currently doesn’t want to, is not offering them a free upgrade to the, hasn’t upgraded their version over the years, and they’re eight versions back, which might not even be PCI compliant. I didn’t go check. But

James Huber (16:29):

Yeah, you didn’t check.

Allen Kopelman (16:30):

And that’s where you get into stuff with these softwares is, oh, that version is too old now. You need a new version.

James Huber (16:37):

Right. Yeah. Had, I mean, no surprise to you. All of our clients ask us, Hey, can we get your processing? Yeah. Everyone wants our volume. Jeremy says, we’ve had one chargeback ever.

Speaker 3 (16:50):

Two,

James Huber (16:51):

Two. Now

Speaker 3 (16:53):

In 16 years,

James Huber (16:54):

We’re going to get matched any minute, and everybody wants our volume because we’re a decent volume. I like law firms. They’re good. Yeah. Law firms are great, except maybe family law firms, but anyways, even they probably don’t get that many chargebacks. Anyways. Everybody’s going, can I get your processing? And I’m going, I would love to give you my processing, figure it out. And nobody’s been able to get into the back end of this. They’re like, well, you could run it. Just run it side by side. It’s

Allen Kopelman (17:29):

Too much work. It’s just like LawPay has the same thing. LawPay. We have a couple of really large law firms happen to have their own billing engine that they made themselves. So we just apid into their billing engine. We created a login. People have to log in, create an account on the gateway when they make the payment, they put in their account number, and then it’s got a web hook and it goes back into their software and Marks it paid.

James Huber (17:58):

Right? I mean, we started doing that, but this is too much of a hassle. But my question is, how many Gnostic software providers are there out there?

Allen Kopelman (18:11):

They’re disappearing. They’re disappearing.

James Huber (18:13):

There’s a few. There’s a few, but they can’t be that good otherwise they would’ve gotten bought up and had,

Allen Kopelman (18:18):

Well, a lot of them are new because people come out with a new thing, and then if they get enough merchants and somebody’s going to be interested in buying it, look at one POS. They got bought by I three now. I three got acquired by PayRock.

James Huber (18:35):

Yeah, but what’s left for the, you’ve got the newest dentist scheduling software. You made it better. I mean, I don’t even know. People are always coming up with law firm software. They’re horrible.

Allen Kopelman (18:46):

Well, that’s what I mean. But until they gain traction, right? But all these new software companies, the first stop, they make Stripe boom, but then they figure out later, oh, Stripe’s not really paying us much money.

James Huber (18:59):

No. Yeah, it’s not working out.

Allen Kopelman (19:01):

And then they think about moving, but people don’t understand that they can move from Stripe. Merchants can move from Stripe. ISVs can move from Stripe. Stripe has a thing on their, there’s actually a page on their website that explains how you can initiate moving all your data. So it’s not impossible to move from Stripe.

James Huber (19:23):

Right. Well, I mean that’s the big part with a lot of these is, well, all these software providers is all the data’s in there. I can keep charging my customer. I’ve got all their this, that, and the other thing. But to your point, it’s all pretty movable once it’s in there. And if you’ve got it tokenized at some point,

Allen Kopelman (19:43):

And they do an ftp, so they’re not going to give it to me, but they give it to the gateway, the processor or gateway authorized.net NMI or the ISOs gateway, and they do an FTP transfer, take it over, and then whoever on the other side reformats the data to fit into their gateway because they want the business.

James Huber (20:10):

Well, it’s interesting. Yeah, you’re going to put that, so you’re going to meet this young software, Jeremy’s software company. You’re going to put in there, Hey, all my customers are my customers. You can’t take the payments. They’re going to have a harder time selling.

Allen Kopelman (20:24):

Well, that’s why you’re going to give them a piece of the, we came up with a way, we went to a software vendor. We’re like, okay, well if you sell, you get X amount of percent. If we sell it, we get X amount of percent, but you still get some residual. So it’s a win-win situation for them because they’re picking up my whole sales force and doing that. So my sales guys are now going to be able to sell X, Y, Z software.

James Huber (20:51):

Okay. And so they’re getting these,

Allen Kopelman (20:53):

Hopefully this deal’s about to get done. We might be coming back to you for an agreement,

James Huber (21:01):

But if I’m a software company, oh, I see what you’re saying. Okay. So they still get a little incentive, but

Allen Kopelman (21:10):

If you look at a lot of these ISVs that go sign up with the newer ones and they go sign up with Tilled or Stripe or whatever, a lot of them don’t get traction and make sales because they think, oh, just put it online. Everybody’s going to find me. You don’t have a marketing budget behind you. How are you going to sell this stuff? And then how are you going to sell into the SMB market? You need feet on the street or you need other people telemarketing or whatever to get the word out there. But the whole thing is we changed our view on software. So my whole view on software now is we have a retail software. I mean, I don’t care. I’ll say the name of the company, shout out to NRSI don’t care. They do smoke shops, convenience stores and liquor stores. That’s pretty much it. Some other small retail

James Huber (22:01):

Three places. I plan on stopping on the way home.

Allen Kopelman (22:05):

We sell it. We land the merchant, we sell ’em, we contract, get the contract signed. Once the contract is signed, they take over. I don’t have to take phone calls. I don’t have to learn the software. I don’t have to do the onboarding. They handle everything. Okay. The merchant has a problem. We have ’em call their help desk. They know the software, let them do it. And we did the same thing with one POS. They handle everything. Sure, I make a little less money, but I’m not dealing with, oh, my printer broke on Saturday night and I need a new printer and I got to get in my car. I got to stock printers in my office or stock POS screens. I don’t want to deal with any of that.

James Huber (22:46):

Well, that’s a good point.

Allen Kopelman (22:47):

You have to weigh it out, right? What do I want more? I want residual. Okay. I don’t Don’t care about that other part. And I don’t want to learn the software and I can sell more other software products because I don’t have to learn them and put them in the same business model.

James Huber (23:10):

So you’re going to have more, I guess, negotiating power if you can go out and sell it. We’ve been hired twice to consult on people that were building law firm software, and I was like, great. And customize it for us. And they’re like, and you can help us sell it because you’re going to all the lawyer conferences and this, that, and the other thing. And I like, well, we don’t go to the lawyer conferences. Why would I go to a lawyer conference? But anyways,

Allen Kopelman (23:35):

They can partner with me. We’ll sell it for them. Right, exactly. We’ll build them out a Salesforce to go out and sell it.

James Huber (23:42):

Right. And you’re not getting people to change. Look at me. I’m going, I hate my law firm software, but it was just too hard to change. Getting people to change from their existing software is tough. Unless you have some value add. I’m going to save you a whole bunch of money on your processing fees also. So yeah, no, I totally agree. I think that that’s your big leverage point is

Allen Kopelman (24:05):

The other thing that we’re doing is we’re going to introduce in 2025 a new offering called ISV Toolbox. So for anyone who has an ISV, they can link up to payroll, a payroll company, a PEO company, a buy now pay later company, a company that will do loans like real loans, not merchant cash, advance and business insurance. And we went out, we found all these different companies that we partner with and we’re going to be offering those products out to our merchants. We already started in a soft launch and we’re going to offer that to ISVs so they can do, when you look at the bigger ISVs like Stripe Square, PayPal, QuickBooks, Shopify, they’re all offering these type of products to their customers.

James Huber (25:01):

So

Allen Kopelman (25:01):

If you’re not offering it, you need stickiness with customers

James Huber (25:07):

And then plug that all into the software,

Allen Kopelman (25:09):

Plug it all into the software, and then we will manage all of those vendors and make sure you get paid. So we’ll manage it all for you. So we’ll handle the heavy lifting side,

Allen Kopelman (25:22):

But you have to protect your residuals. And the only way to, I believe, unless you have some other new thing you’re going to make people sign, I think you got to find an iso, like even Mike Norty, EPI, right? He has his own point of sale system, his own gateway. If you’re selling that, okay, I’m selling the software, I’m selling this, and the processing is all owned by the same company, so if you’re selling stuff like that, your merchant’s not going to get ripped out from under you. I mean, even Clover, if you’re selling Clover through a first day to iso, people can’t switch, but other people can sell ’em new clover equipment and get rid of you, and Clover has their own website and they’re selling direct now, so I kind of call them, they’re part of the antagonistic group. Even look at swipe simple. They’re selling, they let us sell it, but they also sell direct.

James Huber (26:23):

Yeah. When you were saying you’ve got to protect your residual, and unless I have a new And you said agreement, I thought you were going to say baseball bat.

Allen Kopelman (26:34):

No, unless there’s some new agreement or some new verbiage that you can come up with where go sell it to the agents and go, Hey, agents come to Ebert. When you go going to do business with an ISV, I got this ironclad three page agreement they sign, and they’re not going to be able to rip your residuals out from under you.

James Huber (26:54):

Yeah, well, no, you could and that’s actually what we’ve done in the past is when you’re partnering with somebody, you just have ’em sign off and to your point, they’re going, we’re going to build it up and sell it, and they’re not necessarily thinking that, oh, well, the reason people are going to want to buy me is because they’re going to want my payment processing. They’re going, they’re going to want to buy this. I wrote the best software ever. All those sleepless nights writing code, my mom’s basement are worth it.

Allen Kopelman (27:24):

I get it because when I look back at this business, I look back to 2001, 2000 when I first started, right? People came out, there was software vendors like PAI Touch. They built software to sell hardware because that’s what they did. Sold you these big computer screens and all these printers and cash drawers and all this stuff, and they sold it for lots of money and put people in huge leases for 80,000 bucks to equip a huge restaurant or whatever it was, 10, 20, 30 grand, and they made all this money upfront. Then they put you in a monthly service contract. That was their business model

Allen Kopelman (28:04):

And that’s how they went along, and now you come fast forward to 20 20, 20 20, around that time, boom. What do people do? They build software for payments. They’re not building software to sell SaaS revenue. They build software to sell payments, and if you look at Toast, I tell everybody Toast is not a payments company. They make money from payments, but they’re ultimately a software company with a business that’s basically hardware and software as a service. One POS takes, I hand it to them. They have the guts to do it. They have the capital to do it, so they do hardware as a service, software as a service and payment processing. That’s their business model. It’s the same business model as Toast. You look at Shift four, give it to them too. They got hardware as a service. You pay your money for that, and you have your SaaS software payment that you have to make, and then they get the payment process. Same business model. It’s basically Toast. I don’t know who copied who was first, but whatever. That’s the new business model. Hardware as a service, software as a service. If you’re buying enough hardware, even the guys at NRS, they sell the point of sale system for $99. If you do dual pricing, cash discount, 0%, whatever you want to call it, surcharging, whatever it is, they sell it for 99 bucks and $20 a month. Why? Because they want the payment revenue. It’s all about the payments revenue.

James Huber (29:43):

Yeah. Yeah. I mean because the software cost, what’s our software a month? Something ridiculous too on top of it.

Speaker 3 (29:50):

It is. I think we’re paying 2,600 a month or something like that. It’s out of control.

Allen Kopelman (29:56):

$2,600 a month. Yeah,

James Huber (29:58):

Because it’s like each user, but at this point I’m addicted to it. It’s like crack. I hate it, but I can’t stop.

Speaker 3 (30:05):

Yeah. Talk about how much you hate it.

James Huber (30:06):

Pay your bill.

Speaker 3 (30:07):

Right. We’ve had this software for what, five or six years at least. James hated it

James Huber (30:12):

Since day one.

Allen Kopelman (30:15):

You guys had that for a long time. I’ve gotten a lot. I’ve paid a few invoices. No, but that’s what’s happening today and every time I go on Facebook into the agent groups, I need a lawyer. I always put James Huber contact, James Huber call Jeremy Legal Law.

James Huber (30:33):

It’s just a pain in the ass when you pay their bill because their software sucks so bad. Exactly. Yeah.

Allen Kopelman (30:37):

No, but I’m just saying it’s the same. I’m just saying, and then my stomach turns every time I say, oh, I need a restaurant software that’s agnostic. I need this and it has to be agnostic. I need that and it needs to be agnostic. I’m like, do you guys realize how much money everybody’s been in this group collectively has lost probably millions of dollars. We’ve millions of dollars to this happening.

James Huber (31:02):

Millions. The big boys, and for them, it doesn’t even matter. Just another ivory back scratcher.

Allen Kopelman (31:09):

I mean, you look at Worldpay, right? Worldpay, that’s where Mercury was, right? But as soon as those companies got bought up, all that business on Worldpay books from Mercury, it all went gone because they all left and they all went to shift four. They all went to other places because they didn’t need to put data cap in there anymore. There was other ways with semi-integrated solutions,

James Huber (31:37):

And it’s a bigger problem. I know we’re having fun and joking about it, but it’s a bigger problem because it’s not a lot. It’s

Allen Kopelman (31:43):

Not a joke because people are not paying attention. This is a subject matter that the agents are not paying attention to.

James Huber (31:50):

You’re not paying attention. There’s very few industries where they even should not consider using a software. Yeah. I know that. A bunch of stores I go into and I see their dumb reader and I’m going, how are you not using some kind of software that’s managing your hr, your scheduling, your inventory, all of that.

Allen Kopelman (32:13):

I can tell you why, because they’re like cash.

James Huber (32:19):

I’m just thinking the only story I go into is like a gas station.

Allen Kopelman (32:22):

No, but believe it or not, there’s a lot of businesses out there. I mean, they don’t want to have a point of sale system because they want to pocket the cash. That’s the main reason for not using a point of sale system.

James Huber (32:36):

When

Allen Kopelman (32:38):

I signed some guy up recently, like eight smoke shops, I’m like, eight smoke shops. You don’t want point of sale. I’m like, are you kidding me? What? No point.

James Huber (32:47):

No, because selling creto actually,

Allen Kopelman (32:49):

Well, we don’t care what they sell in the stores, as long as they’re not selling it online. You could sell whatever you want. You ever go into a gas station and see what they sell in gas stations? I mean, I’ve walked in a gas station

James Huber (33:00):

Like the bath salt.

Allen Kopelman (33:02):

No, I mean, I went to a gas station the other day. They were selling whatever, herbal Viagra pills. They got raum. They got kava, they got, I don’t even know, all kinds of CBD products in there, and it’s a gas station. ONGs, water pipes, hookahs. What’s the address? Huh?

James Huber (33:23):

What’s the address? We’re heading over

Allen Kopelman (33:25):

Somewhere. They’re everywhere. Just any, they don’t have that at Wawa, but I mean, your non-branded, locally owned gas stations are full of this stuff.

James Huber (33:38):

We don’t see a ton of that in Southern California, do you?

Speaker 3 (33:40):

No. I think it’s all the California laws.

James Huber (33:43):

Yeah,

Allen Kopelman (33:44):

Probably.

Speaker 3 (33:46):

Believe me, Allen, we’ve looked,

Allen Kopelman (33:49):

Listen, you guys have dispensary on every corner. I mean, yeah,

James Huber (33:53):

I think you do. Yeah, but I think the, well, I know because we represent the clients that do the smoke shops or they’re selling all sorts of, they’re selling Creon and everything, but you’re right. Yeah. They’re not using POS. They’re running it on cash. They probably prefer to have a knuckle buster in there just so there’s no

Allen Kopelman (34:10):

Record. A lot of them take credit card. They just put a credit card. It benefits smoke shops. If you’re selling cigarettes and you’re selling the JUUL vape and the Altra stuff that comes from RJ Reynolds, it’s worth it to have a point of sale system because the point of sale we sell has tobacco reporting in it, so it collects all your inventory. It passes the coupons, and then it reimburses the merchant for the discounts that they give the customers. But if you’re not selling a ton of cigarettes, you don’t need it. But stores that sell lots of cigarettes need tobacco reporting.

James Huber (34:50):

I don’t even see people smoking ever in California. I don’t even,

Allen Kopelman (34:53):

Well, everybody vapes, but it could still be a nicotine product. You follow,

James Huber (34:57):

Right? You still have all the reporting

Allen Kopelman (34:59):

And you’re still required to have all the reporting and that software does it for you. Otherwise you got to do it all by hand.

James Huber (35:06):

I don’t even think you’re allowed to smoke on the sidewalks here. Are you ever see people,

Allen Kopelman (35:10):

They let people sleep on the sidewalk.

James Huber (35:12):

You can sleep and go to the bathroom all you want,

Speaker 3 (35:16):

Right? But don’t smoke a around. Just don’t smoke. Exactly. You can’t smoke here, but you can poop, pee

James Huber (35:23):

And

Speaker 3 (35:24):

Sleep. Don’t have an open beer in your hand. Yeah,

James Huber (35:28):

That’s crazy. I don’t think they care about open beers around here, do they?

Speaker 3 (35:31):

You think so? If you’re walking down the

James Huber (35:33):

Street, I don’t know. I got gray hair and I’m a white man. Exactly. Yeah.

Allen Kopelman (35:40):

Alright. I find this whole topic to be like, if I tell agents this all the time and they go, you’re crazy, and I go, I’m crazy. I said, okay, well, I lost enough money.

James Huber (35:55):

Yeah, no, and I think it is. The race to zero was a big problem, and then the software was kind of the fix for it, but now that’s going away, so yeah, you got to get nimble. I mean, the stuff that you’re doing is I think the only way out. I mean all of our clients, we used to say we represented sales organizations. Everybody’s a FinTech company.

Allen Kopelman (36:17):

Yeah, everybody. You’re a FinTech or I call myself a consultant, financial consultant payments payment

James Huber (36:26):

Consultant.

Allen Kopelman (36:28):

Here’s another thing that really, when you talk about the Race to Zero, I had an article about that too. What do you think about agents who pay merchants part of their processing revenue or ISOs that are paying agents, paying the merchant back. They’re on cash discount for 4% and they go, okay, we’ll cut you back 25% of the money.

James Huber (36:50):

Well, you said the magic words. Every single state has a kickback statute that makes that illegal per se. Visa. Visa and MasterCard both say you cannot do that, but there’s an easy way to do it. You just make the merchant an agent.

Allen Kopelman (37:05):

Right?

James Huber (37:07):

But you better have that agent agreement. I don’t think anybody, the DOJ is not going to come kick down your door for doing a kickback, but how do you know who the kickback’s going to? What if the kickback’s just going to the C FFO and the CEO O finds out? Then you might have a problem in your hand and we know

Allen Kopelman (37:24):

From I’m just going to the manager of the restaurant and not the owner.

James Huber (37:27):

Right, exactly. It’s going nice.

Allen Kopelman (37:29):

When they ask me for that, I go, I just lower your rate instead of you don’t want to do 3.75, we’ll do 3.5% or we’ll do 3.4% saves the

James Huber (37:41):

Money and the only reason people would want the kickback is so that it can be not reported to somebody.

Allen Kopelman (37:47):

Well, I make sure anybody who’s getting residual, we’ve had people ask, I’ve had agents ask me, oh, just zelle me the money. I’m like, no, you have to sign the agreement. You got to give us a W nine form a driver’s license and avoid a check and we’re going to verify your federal tax ID or you’re giving me your social, otherwise I’m not paying. You

James Huber (38:09):

Just leave a briefcase of money by under the bridge.

Allen Kopelman (38:12):

Yeah. No, but I’ve had people ask for residual and cash. I have a guy recently, he sent us a deal. We did the deal, and then I’m like, you got to sign the agreement. He goes, no, Zelle me my money. I’m like, there’s no zing you money. You got to fill out the paperwork. All that. I said, he got a lawyer. I told the lawyer, here’s the paperwork. Have your God signed.

James Huber (38:34):

I’m not laundering money for you.

Allen Kopelman (38:35):

He can get paid. I said, what do you think? I’m just going to send the guy Zelle, or he wants me to send him Venmo cash app, this, that. We’re not doing that. We’re not in that kind of business. Guy wants to get paid, fill out the paperwork and we’ll pay you otherwise. See you,

Allen Kopelman (38:53):

But I don’t like this whole thing, this movement of places. Oh yeah, we’ll just sign the merchant up as an agent and da dah, dah. I think the ISOs need to put their foot down with this thing and go, Hey man, this is not good for business. I picked up an account because the merchant stopped getting paid and then he stopped getting his kickback. Yeah, he stopped getting his kickback, so I took over the account, lowered the fees, blah, blah, blah, and the guy’s all happy. He’s happy. He’s like, yeah. He goes, that was bs. The person stopped paying me, and I said, whatever. It is just crazy when merchants ask for money like that, and then I had one guy try to explain to me, he goes, well, you’re charging 3.75, so I want 1%, and I’m like, what? You meant 1%? You don’t even understand how it works. It’s not like we keep the whole 3.75%. He get everything,

James Huber (39:49):

Huh? That means he gets everything,

Allen Kopelman (39:52):

But I’m just saying Visa, MasterCard got to collect on the interchange. The processor’s making money. The bank, everybody’s got their hands in there. Hands in there on the transaction.

James Huber (40:04):

Now, every time someone brings that up, I say exactly that. There’s kickback statutes in every single state and Visa, MasterCard. Find out they’ll shut you down. You can make them an agent, but that’s stupid. It’s lower the rates, and they’re like, well, they want the money. And I go, great. Well, then you’re going to get in trouble because the guy in charge isn’t getting that money when he finds out Jeremy’s pocketing in all the cash.

Speaker 3 (40:29):

Jeremy, Ellen, we need to shut down that kickback. Let’s kill that. Ellen,

Allen Kopelman (40:36):

I don’t work with Stacks. I don’t know what you’re talking about. Alright. No, but it’s crazy. I mean, you have, I mean besides like I’m saying, partner with companies who own the ip, they own the software and they do the processing. I think agents have to start embracing that unless there’s some other magic trick you think legally agents can do.

James Huber (41:08):

I would. I’d try and get a little agreement out there with everybody that you partner with just to protect you. I mean, that’s usually our thing. I know these are all done on handshakes, but get a little piece of paper in front of ’em and I’m sign off.

Allen Kopelman (41:25):

I don’t know. I think it’s just a crazy subject of guys who have been in the business for a long time have probably seen more financial impact than people who have only been in it for a short time,

James Huber (41:38):

And if you’re just coming in, you don’t know how hard it can get. This is happening. It’s unavoidable, so protect yourself.

Allen Kopelman (41:48):

No, and I think in the future, the software agnostic software, I don’t think it’s going to take over our industry in the next year or something. Magically that’s going to be the thing of verticalized software, but I do think probably in 10 years from now, that’s going to be a really big thing. What do you think about that?

James Huber (42:13):

Yeah, I mean it’s just hard because all these software companies they want to sell, but I think being agnostic, even the law firm software, if lawyers knew the amount of money they’re losing on this and that they could go negotiate and go team up with Alan and get way better rates and service. We had some client been our client for three years. Payment was held up for two weeks.

Speaker 3 (42:42):

Not a small amount of money either.

James Huber (42:44):

That wouldn’t happen. We were like, we had to tell them. They were like, Hey, you guys want to know what you’re doing here? I think we know here. And they were like, oh, it turns out you’re right. You guys know.

Allen Kopelman (42:59):

That’s one thing that I always make sure when we’re dealing with companies, we have some law firms, we have one, they have a client. His retainer is 250,000 a month, and the first time it went through, the processor called me. They go, was that a mistake? And I called the law firm up. They go, no, this client wants to pay on his card. And they sent over who the guy was. He wants the miles.

James Huber (43:29):

He wants the miles.

Allen Kopelman (43:30):

Yeah, he wants the miles. He’s a big traveling guy and he wants the miles and he wants 200 and he puts 250 grand on a recurring credit card every

James Huber (43:40):

Month. Well, everybody tries to do that to us too, so that’s why we had to start Surcharging. Then everyone,

Allen Kopelman (43:47):

I don’t want to get, we could do a whole nother podcast and talk about Visa and the whole 0% thing. That could be a whole nother podcast that could last for three hours.

Speaker 3 (43:57):

Yeah. Let’s get you on the payments expert podcast, Alan, we can have

Allen Kopelman (44:01):

Anytime you guys want on your podcast. We can talk about talk, whatever James knows. We’ve delved into Fed Now Together Conspiracy. Yeah, that was a great one.

James Huber (44:14):

It is a conspiracy.

Allen Kopelman (44:15):

We talked about that. We’ve talked about other stuff.

James Huber (44:18):

Heard much more

Allen Kopelman (44:19):

About Fed Now. Yeah,

James Huber (44:22):

I go away.

Allen Kopelman (44:24):

I don’t think it went away. I just think they don’t know what to do. I think the banks are slow to adopt it. That’s all

Speaker 3 (44:30):

They want us to

James Huber (44:31):

Forget and then all of a sudden, yeah, your money starts expiring.

Allen Kopelman (44:38):

I mean, believe me, I would love to do a podcast all about that hearing they did in Washington on Visa, and then they had this payments expert guy. He testified and he goes, well, I don’t know why you’re giving Visa a hard time about this 1 trillion in debt. You should be talking to the banks. They’re not in control of that. I can fix the whole Visa MasterCard problem for Congress. Just tell Visa to do two things. This are the two things Visa should do. Well, three, one, allow merchants to pass the fee and just forget about, they can just forget about all this secret shopping.

Allen Kopelman (45:17):

Just forget about it. Figure out, just say whatever it’s going to be three and a half percent. You don’t like four, whatever it is, just say everybody can do it and leave it alone. That number one. Number two, the assessment fees are way too high. They need to get rid of that. They need to lower those. They’re like 14 basis points. Now that needs to be lowered. Go back to eight or 10 or something. That needs to be dialed back. The next thing is small ticket interchange. Bring that back up to 30 bucks, 25 or $30. Small ticket interchange. They did away with that when they did the Durban Amendment and they need to bring it back because that would help small businesses right there. Just those few things right there would help the average business save money on credit card processing. Absolutely. Make everybody

James Huber (46:10):

Happy. Yep.

Allen Kopelman (46:11):

Except Robert Johnson.

James Huber (46:13):

Yeah, exactly.

Allen Kopelman (46:15):

And the secret shopper people.

James Huber (46:17):

Yeah, they’ll be out of jobs. No, I mean New York, I got to

Allen Kopelman (46:19):

Wrap it up. No, New York. Now you go into a restaurant, every menu item has two prices. Every menu item, customers, they don’t care. They’ll pay the fee. Don’t care. I don’t pay the

James Huber (46:34):

Fee. Bring on this pizza. Alright, I got to run.

Allen Kopelman (46:37):

Okay, so agnostic versus antagonistics. I guess agents need to think about what we talked about today. Pick your partners carefully, consult with James Huber if you’re going to get in bed with an agnostic partner and make sure you’ve got some kind of agreement, and I would suggest giving them some residual so that you’re just not taking all the residual and maybe you would be able to get an agreement with them. Maybe you make a little less money. Maybe they handle some of the, you don’t have to do all of the tech support and you got to consider this because otherwise you can lose your residual from a person who’s lost tens of thousands of dollars a month because if I had it all back, my residual would be double what I’m making today

James Huber (47:30):

And educate the software seller. To your point, agnostic software for the low dollar PE firms are going to buy this up. Well buy it up. You’ll be worth more if you say you can use this with whomever, or I got somebody who’s fabulous who will buy this up and it’s just a different type of buyer.

Allen Kopelman (47:55):

Well yeah, maybe you’re not getting all the payment revenue, but you’re gaining a sales force at the same time of people selling. So that’s our advice words from the why’s the legal and the person has lost enough money that they’re not happy about it.

Speaker 3 (48:15):

Alright,

Allen Kopelman (48:16):

I appreciate you guys coming on the podcast. Thank you, James. Thank you, Jeremy. Even though we didn’t get ’em on camera once.

Speaker 3 (48:22):

Yeah, no problem. You’re better off that way, Alan.

Allen Kopelman (48:25):

You guys can find you guys. Have a great day. Happy holidays. Merry Christmas, happy Hanukkah. Happy Kwanza. Happy New Year. All that and I’m sure I’ll see you guys at a payments conference in hope

James Huber (48:37):

So.

Allen Kopelman (48:39):

All right,

James Huber (48:39):

Thanks a

Allen Kopelman (48:40):

Thanks. Alan Harpe, D B2B Vault, bringing you the Street Smart Edition.