A retail storefront and a customer armed with a credit or debit card at the POS: This scene is as ubiquitous as fast food. But while traditional brick-and-mortar electronic transactions are as comfortable to many as a favorite pair of shoes, they aren't suitable for all retailers all of the time.
There are also mobile merchants who accept check and card payments and traditional merchants who wish to offer check and credit card payment services to customers in their homes or other off site locations.
These merchants need a solution that enables them to accept checks and card payments regardless of where they set up shop. This means that merchants can process credit cards and checks, using one device, at almost any location in the nation.
After enjoying success offering the solution directly to customers such as Spirit Airlines Inc. and AirTran Airways, Commerciant is now offering the Mobilescape solution to merchant level salespeople (MLSs), ISOs and acquirers, opening to payments professionals the opportunity for a new, recurring revenue stream.
Founded in May 2000, Commerciant is headquartered in Houston. Its employee roster has grown to more than 25 and continues to expand. This is due in large part to the success of the company's most recent solution, the Mobilescape 5000.
In July 2006, Commerciant released the Mobilescape 5000, one of the market's first handheld, wireless solutions that processes credit cards and converts paper checks to electronic transactions.
"Since the launch of the Mobilescape 5000, our sales growth has been rapidly increasing," said Richard Howell, Chief Operating Officer. "We've been able to achieve impressive growth because we firmly believe that checks aren't dead, and we offer a way to make it easier for merchants and customers to keep using checks."
Along with financial success, Commerciant has also received accolades for its payments solutions. In March 2007, it was a finalist for the Red Herring 100 Most Promising Companies Driving the Future of Technology. The company was also voted one of the Top 10 Most Promising Companies at the Rice Alliance IT Venture Forum.
In addition to the Mobilescape 5000, Commerciant offers the Mobilescape 3000, which processes card payments only. Both the 3000 and 5000 are rugged, wireless, handheld terminals that enable secure payment processing from just about anywhere. They require no additional infrastructure and are "plug and play" right from the box.
The Mobilescape solutions include integrated printer, touch screen software, wireless service, transaction processing, signature capture and support. Merchants can also choose an optional maintenance program, which provides a replacement terminal the next business day following a breakdown.
Since both the 3000 and 5000 are wireless solutions, merchants don't need a traditional phone line to process payments. Commerciant's transactions are encrypted and securely carried by the Sprint Nextel network. They are usually processed in 10 seconds or less.
Mobilescape 5000 is ideal for residential services companies such as plumbers, electricians and pest control technicians. "One key market opportunity that has been traditionally underserved is the more than 20 million mobile merchants that collect payment – often manually and on paper – away from the office," Howell said.
This market is attractive to ISOs and MLSs who resell the Commerciant solution because it is often not displacing or competing with another wireless solution. "What we discovered in the wireless world is that a whole fleet of residential services vehicles has been generally overlooked," Howell said.
Traditionally, such services will accept credit cards, but must call a home office to get verification. It takes time away from the technician doing what they do best: fixing the problem. Instead, they spend time writing down authorization numbers, verifying expiration dates and so forth. Also, the merchant must pay the card not present transaction rate.
Many residential services companies don't accept checks. There is a risk of fraud when accepting unverified checks on the spot. That is why Commerciant works in partnership with some of the leading check payment services companies, including CrossCheck Inc., Electronic Clearing House Inc., Global eTelecom Inc. and EZCheck.
With the Mobilescape 5000, paper checks are converted to electronic payments and are always verified against a positive-negative database to determine if customers have a history of writing bad checks. Merchants who sign up for an optional guarantee service will be paid by the check processing company, even if the check bounces.
Mobile merchants face another issue when accepting checks: Time is money. Howell noted that many repair personnel don't return their vehicles to the home office each night. If that is the case, collected checks are riding around town, worth nothing until deposited. They are also at risk of theft or loss.
With Mobilescape 5000, check payments are usually credited to merchants' accounts within two business days. Another major merchant benefit is qualifying for a card present transaction rate. Credit card payments are batched and processed overnight. Merchants also receive 24/7/365 customer support.
Additionally, merchants can reduce their chargebacks, since Mobilescape keeps an electronic receipt, with signature, archived for seven years. If there is a dispute or chargeback, the original customer signature can be retrieved electronically.
If a dispute occurs, the merchant doesn't have to do any footwork. Mobilescape automatically sends to the customer's bank a valid, signed receipt as proof of the transaction.
Besides helping with the bottom line, this simply eliminates the hassles of receipt handling and storage. Transactions can also be exported to accounting and spreadsheet software.
Another benefit is Commerciant's online account management system, Mobilescape Manager. Provided to all Mobilescape merchants, this tool helps merchants analyze their business operations.
On the secure Mobilescape Manager Web site, merchants review and manage all receipts. It also includes management reporting and controls.
Commerciant sells overwhelmingly through ISOs and MLSs, and it is interested in creating more relationships. The company works with agents nationwide and doesn't require any special market focus. However, it prefers to work with agents who understand that a wireless sale differs from a wired sale.
"Everyone is looking for new revenue streams and untapped markets," Howell said. "We've got it, but there is a little work to explaining to residential service providers, you are going to be taking payments differently."
While selling a wireless service is different than a traditional POS processing sale, it is neither difficult nor cost prohibitive. "Data plans are so cheap that the cost to the merchant is minimal," Howell said.
Howell noted that the cost to agents is under $20 a month, so even with a good markup, the merchant's cost is more than offset by the savings in card present transactions.
There are a variety of ways that ISOs and MLSs can earn revenue when their merchants use the Mobilescape solutions. "We offer substantial discounts on our hardware and wireless rates to ISOs and agents," Howell said.
According to Howell, ISOs and MLSs generate upfront revenue on the sale of the hardware and then recurring revenue on credit card processing, check processing and wireless fees.
Commerciant pays residuals on air time, and since Mobilescape includes real-time signature capture, many agents choose to bundle signature capture with air time to increase residuals, Howell stated. In addition, ISOs and MLSs can earn revenue on monthly maintenance plans. There are also revenue opportunities from guarantee and verification fees.
Agents can charge a setup fee. "We do all the deployment, and there is no setup fee," Howell said. "A lot of our competitors charge one. We program the terminal, deploy it and drop ship it to the ISO. Agents can keep 100% of the setup fee."
Commerciant hopes the many benefits will bring loyal merchants and low attrition, both good things for ISOs and MLSs.
"Once they are doing checks with Mobilescape, there is no point or business reason to change," Howell said. "Once an ISO sells the unit, their processing portfolio is just not going anywhere."
In a time of fierce competition in the payments arena, it is rare to find a unique solution that doesn't require changes to existing infrastructure or laborious training. Commerciant offers solutions designed to provide merchants with mobility without sacrificing service or sales, which means that ISOs and MLSs won't need to either.
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VP Business Development
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Houston, TX 77042