Conquering North America, one merchant at a time

Moneris Solutions Inc. may flourish under the radar, but don't let its relative anonymity fool you. Moneris processes more than 3 billion card, Internet and POS transactions annually for nearly 400,000 merchant locations across North America. Additionally, Moneris designs and deploys proprietary turnkey solutions for retail, business-to-business, and business-to-government merchants.

The majority of those merchants are located in Canada, where Moneris has a sizeable stake: its market share is reportedly between 40 to 48 percent, making it the largest processor in that country. In the United States, where its footprint is much smaller at about 50,000 merchants, the company has seen steady growth over the past decade. Moneris was established in December 2000 as a joint investment between two Canadian financial behemoths, RBC Financial Group and BMO Financial Group, which is the parent company of Chicago-based Harris Bank.

"We've been around the U.S. for about 10 years under the Moneris brand," said Joe Garza, Vice President, Direct Sales for Moneris. "Before Moneris was actually branded as Moneris in the U.S., we used to be part of what was formerly called Harris Bank Merchant Services/The Charge-It System. From a payment processing standpoint, we've been around roughly 25 years, but under the Moneris brand, it's been the last 10."

A focused partner strategy

North of the border, merchant acquisition for Moneris has been driven largely by its Canadian bank counterparts.

To illustrate the magnitude of this powerful alignment, RBC has an estimated 12 million clients in over 30 nations, while BMO has more than 7 million personal and commercial accountholders throughout Canada and the United States.

Because Moneris doesn't have the same coverage in the United States that it has in Canada, its primary focus in the States has been to form strategic alliances with ISOs in select vertical market segments, such as health care and education.

"We've had to become a little more aggressive, build programs around ISOs, strategic alliances, integrators. We don't have that luxury that we do in Canada," Garza noted.

Garza said Moneris is segment specific in the United States. "We don't try to cast a wide net," he added. "Moneris has been very successful in staying under the radar. But when we get behind the ISOs and MSPs [Member Service Providers] and partners in a segment, we tend to build technology for them and create a specialized process to support that segment or industry."

He said when considering a strategic alliance in a particular vertical market, Moneris asks potential partners such questions as, "What do you need as an ISO or MSP to grow in the segment, because you obviously have the expertise?" or "What are the one or two elements you don't have?"

Garza said that by focusing on specific vertical markets, Moneris has gained proficiency and expertise in those segments. "So the solution is all driven around that industry," he said. "When you call into us, [the customer service reps] know everything about the software. It's almost like you have your own expert team. From a capability standpoint, I think our capabilities are above our competitors in those segments that we specialize in."

Xavier Ayala, Vice President, Director of U.S. Sales for Moneris, added, "We want to be the processor that is known in this handful of segments we've selected, with the addition of also offering specialized solutions for those segments."

New offerings rolling out

As with all successful payment businesses, Moneris has a number of new products and services in various stages of development. According to Ayala and Garza, Moneris plans to launch several key programs this year, including the following:

1. Online signatureless merchant application: According to Ayala, this feature will allow sales offices to submit merchant applications without a signature. ISOs can post a link to the application on their company websites, which merchants are able to complete and submit online. Applications then upload to Moneris for processing. ISOs can track the progress of all applications they've submitted online.

2. Expansion of Ernex gift and loyalty programs: Since 2003, the company's electronic loyalty and stored-value gift programs have supported small to nationwide merchants in Canada. Starting in June, Moneris plans to expand the program to U.S. merchants. Unlike the Canadian model, in which Moneris charges monthly, transaction and reloading fees, the U.S. version will be pared of transaction fees, Garza said.

3. New mobile solutions: Moneris is also stepping up its mobile payment offerings. "We've been asked by our sales offices to go out and offer mobile solutions that work with the iPhone or mobile solutions that can be integrated with a gateway solution for gateway reporting," Ayala said. "So you can go online and take a look at a copy of the receipt; as well as solutions that can integrate with the gateway, the virtual terminal."

   Garza noted that Moneris is working with multiple third-party vendors, including VeriFone Inc., Charge Anywhere LLC and Apriva to deliver mobile payment solutions. "We believe everybody should have that included in their account instead of saying, 'Here is the solution and you have to buy this additional mobile piece, the online piece and the retail piece.' We believe that should accompany the accounts," he said.

4. Proprietary electronic payment niche solution: With this online billing and payment vertical market solution, targeted merchant groups will be able to accept and process all types of electronic payments, including credit and debit cards, electronic checks, and automatic checking or savings account withdrawals where recurring payments are applicable.

5. POS rental program: Until now, this program has been offered exclusively to Canadian merchants, but Ayala said the POS terminal rental program will soon be available to merchants in the United States.

A higher level of support

Ayala said that in the past, when merchants became insolvent and chargebacks started rolling in, processors and ISOs typically had to share the liability burden, but with the economic volatility of recent years forcing a number of merchants to close their doors, Moneris has taken on an even greater role in such situations.

"What we've done is we've taken an extra step with our program to the ISO - because it could be devastating to any office to take virtually any amount of loss, let alone a catastrophic loss," Ayala explained. "So we're saying to our partner, 'Look, we're doing the back-end processing, the fraud scrubbing, the monitoring and the risk management on these accounts. We'll take full liability if this were to occur.'"

Ayala believes this level of commitment to the ISO-processor relationship creates a better sense of security for anyone who chooses to partner with the company. "We've just taken that worry away from that ISO," he said. "It's possible because of the risk management process we have in place to manage and review accounts on a daily basis."

Many options for merchants

Among its core offerings, Moneris delivers credit, debit, wireless and online payment services. The company's value-added payment products include auto-debit/automated clearing house processing, check conversion, multicurrency processing, cross-border payment acceptance, unattended online payment and interactive voice response telephone solutions, among others. Moneris also offers POS hardware and business management solutions, as well as electronic loyalty and stored-value gift programs.

Moneris owns and operates its own proprietary payment processing and technology development platforms, in addition to maintaining processing relationships with First Data Corp. and Total System Services Inc. (TSYS) in the United States

Thus, ISOs partnering with Moneris can board merchants on several processing platforms: Base 24, the company's proprietary platform; the TSYS platform; and First Data's North and Nashville platforms. Merchants boarded through Moneris' proprietary Internet payment gateway, eSelect Plus, also gain access to the company's latest wireless solutions.

A greener business plan

Earning kudos on environmental issues, Moneris has a long history of eco-friendly initiatives. For example, since launching its Paper Reduction Challenge back in 2008, the organization said it has managed to reduce its paper usage by over 4 million sheets. To encourage merchant participation as well, anyone who signs with Moneris can choose to opt-out of receiving printed monthly statements and use its online Merchant Direct statement tool instead.

And in 2011, Moneris became Canada's first payment processor to rely exclusively on clean energy, signing with Bullfrog Power to provide 100 percent clean, green electricity to its Toronto training facility.

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