At this point, it’s an industry, having grown up over the last decade helping banks and credit unions negotiate new agreements with their vendors – payment processors, networks, card fulfillment companies, internet banking and bill pay companies. The list goes on.
They operate under the guise of being a consulting company, suggesting that they have their client’s best interest at heart. And some do. But there are also a bunch of organizations that do more harm than good. These companies are seen as pariahs by vendors … not because they are hard negotiators, but because they pay no homage to the value of the relationship itself and how this works to the mutual benefit of both parties. Unit costs are their concern, and some even line their own pockets based on just how much cost savings they deliver.
The relationship between a financial institution and their payment vendor is comprised of more than just unit costs — how the companies work together, how responsive they are, how well they listen to each other, how they work through issues. These are elements that make a relationship rewarding… or not. And risking these based on a flawed negotiating model is dangerous and ill-conceived.
These are your partners. Treat them as such. Turn the screw during negotiations, don’t strip the threads.