Electronic PaymentsBlog

March 17, 2010

Expanding Into New Payment Verticals: A Guide for Merchant Services Agents

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When you’ve already developed a good portfolio, expanding into new verticals is a great way to keep your business in growth mode.

You’ve likely already worked with a number of different verticals, but it might be time to get more strategic.

Read on for EPI’s tips on expanding your vertical coverage, informed by veteran agents and the payment processing partners that support them.

Pinpointing Your Vertical Strategy: Breadth vs. Depth

Entering new merchant services verticals can increase volume, retention, and long-term residuals. But there are two potential paths to take:

1. Expanding in multiple directions to maximize coverage
2. Focusing on one new area to maximize value

We recommend the second option.

The Downside of Breadth

Every vertical comes with different operational needs and merchant expectations. While it’s tempting to go broad and cast a wide net, trying to sell into too many new verticals at once can spread your expertise and services too thin and be counterproductive, leading to lower close rates, weaker retention, and increased support load.

The Upside of Depth

On the other hand, depth is what makes your experience as an established payments agent so valuable. When expanding, take the time to comprehensively learn your new vertical’s needs. Specialization and focus like this will help:

• Merchants see you as an industry expert rather than another generic salesperson
• Make prospecting and onboarding more repeatable and scalable
• Earn you stronger referrals inside the industry—compounding your growth

Successful agents are often the ones who expand step-by-step, strategically moving from one vertical to the next.

Choosing Your Next Target Vertical

Similar to focusing on one new vertical at a time, selecting your target vertical should be based on fit, not just market size.

The best payment verticals to target will align with your strength, tools, and support capacity.

Evaluating Good vs. Bad Fit Verticals

A focused entry plan reduces risk while increasing long-term payoff. To help make those considerations, you can ask yourself the following questions about each vertical option:

• Does the vertical have consistent payment volume and stable demand?
• Do merchants in the space rely on evolving technologies and software, not just basic processing?
• Is the operational model something you can support efficiently?

You aren’t limited to verticals that hit all three criteria above, but successful agents weigh these factors before striking out into new territories.

Choosing Oversaturated vs. Undersaturated Markets

Next question to ask: Is the vertical crowded, with competing offers and aggressive pricing?

Verticals that tend to be quite saturated include restaurants and storefront retail, but with a strong strategy, these can still be good areas to grow.

Service industries—think HVAC businesses, lawn care, or similar—tend to be undersaturated and could be a good pick if you haven’t developed this part of your portfolio yet.

How to Spot Verticals in Transition

Verticals that are having a “moment” can be good candidates for expansion:

• Look for industries adopting new POS systems or payment workflows
• Watch for business models shifting from cash or manual invoicing to digital payments
• Pay attention to local development, new business clusters, and regional changes
• Check trade publications and LinkedIn to surface niche growth areas

Getting “Sticky”: Finding High-Retention Merchants

Long-term retention is key, and it depends on the value merchants see beyond pricing. In general, merchants are less likely to switch when you provide tools that can be embedded in daily operations.

Less Churn: Verticals with Specialized Solutions

Verticals with very specific solutions often have higher switching costs for the merchant—and may offer higher “stickiness” for you:

• Retail merchants often need inventory and multi-location support
• Restaurants typically need fast checkout, tipping, and uptime reliability—and may require a restaurant-tailored POS
• Service businesses often need scheduling, invoicing, and mobile acceptance

Value-Added Services That Increase Retention

Look for opportunities to up the “stickiness” of your merchants—whether you’re evaluating where there’s the most potential for increasing merchant stickiness to target a particular vertical or you’re looking to balance the drawbacks of a particular vertical.

Consider:

• Loyalty and gift card programs → increase platform use
• Reporting tools → engage merchants with performance data
• CRM and customer tracking features → strengthen long-term adoption
• Bundled solutions → reduce the likelihood of merchants shopping purely based on price

How to Adjust Your Sales Discovery to a New Vertical

Once you’ve selected a new vertical, it’s time to master the insider language and internalize the concerns that merchants care about most.

Don’t use the same pitch you used with other verticals; merchants respond better when you understand industry specifics.

Since consultative discovery often works better than generic processing pitches, we’ve rounded up some top questions to prepare for and bring up with merchants in restaurants, retail, and professional services.

Restaurant Discovery Questions

• How do orders flow through your business today?
• What are your tipping needs?
• How is staff turnover?
• What do downtime and slow checkout cost you operationally?
• What systems do you need to integrate with your POS?

Retail Discovery Questions

• Are sales in-store only or also online?
• How complex is your inventory?
• Do you have multiple locations or franchise expansion plans?
• What reporting and customer data do you rely on?
• What tools do you already use that payments must connect to?

Service-Based Business Discovery Questions

• How do you schedule jobs and manage appointments?
• Do you invoice upfront, after delivery, or in phases?
• Do you need mobile or field payment acceptance?
• Are recurring billing or subscriptions part of your revenue?
• What would make payments simpler for staff and customers?

Risk vs. Reward of Different Verticals

Some merchant services verticals carry higher dispute, fraud, or compliance exposure. Understanding both the risk and the potential reward can help you evaluate whether expanding into a given vertical makes strategic sense.

E-Commerce and Subscription Services

Risk:

High prevalence of card-not-present (CNP) transactions can translate to higher fraud and chargeback rates because the buyer isn’t physically present to verify identity.

Reward:

E-commerce and subscription services are fast-growing, high-volume industries with recurring revenue and a strong need for modern payment tools.

Travel Agencies and Contractors

Risk:

Long timeframes between payment and delivery; delays or cancellations before fulfillment can lead to more disputes.

Reward:

Typically, larger deposits and repeat transactions; opportunities for long-term account value.

Luxury Goods and Medical Equipment

Risk:

High-ticket inventories; increased exposure when fraud or chargebacks occur; high-value items are frequent targets.

Reward:

Substantial processing volume and stronger margins per account.

CBD and Adult Retail

Risk:

Stricter network and bank scrutiny; regulated categories face tougher underwriting standards and ongoing compliance monitoring.

Reward:

Merchants struggle to find reliable providers, translating to a higher need for processing support.

EPI agents can reap the rewards of underserved verticals—like adult retail/entertainment, smoke, vape, CBD, and MOTO guns and ammo—with Cygma®, our wholly-owned direct processor.

Checklist: Operational Steps to Enter a New Vertical Successfully

Top agents treat vertical entry like preparation, not experimentation. Use this checklist to ensure you’re ready to sell, support, and scale in a new industry.

Learn the Merchant’s Real Workflow

• Study how businesses in the vertical take payments day-to-day
• Identify which features are must-haves versus optional add-ons
• Understand where current systems commonly break down
• Tailor your recommendations to real operational pain points

Build a Repeatable Vertical Playbook

• Standardize your discovery questions for that industry
• Document the most common solution stack for the vertical
• Set onboarding and support expectations upfront
• Refine your pitch to match the merchant’s business model

Use Training and Internal Resources

• Review product documentation and vertical enablement materials
• Learn which hardware and software are best supported for that merchant type
• Use onboarding tools that reduce submission friction
• Attend trainings or virtual sessions focused on vertical-specific challenges

Conclusion

Expanding into new payment verticals is one of the most effective ways to grow a strong, sustainable merchant portfolio—but only when it’s done with intention.

The agents who see the best long-term results don’t chase every opportunity. They focus on vertical fit, take the time to understand how merchants actually operate, and build solutions that go beyond basic processing. That combination leads to higher close rates, stronger retention, and residuals that compound over time.

By choosing the right verticals, offering sticky, value-driven solutions, and preparing operationally before you sell, you set yourself up to scale without overwhelming your business—or your support resources.

800-966-5520 | www.electronicpayments.com