Solomon "Sol" Lax, Chief Executive Officer of Pearl Capital LLC, believes the payment processing industry is approaching a point when only those who can adapt will survive. "Right now it's hypercompetitive; there's a lot of dollars chasing the same advertising target," he said. "More brokers are fishing in the same pool. Theoretically, there is a very large pool so that shouldn't happen, but it could be that there are too many people using the same exact methods of acquisition.
"You are going to have processors that really make it because they can grasp the technology, can offer multiple iterations, and provide value add. And then you have the old-school guys that are stuck in a commodity business with declining margins."
For ISOs seeking to increase their market share, providing payment processing and competing on price alone aren't enough. Lax said it's about adding value as well, "having the ability to say, 'Hey, I have money for you, or I have some other products for you' in addition to just pure processing. The ISO is then able to say, '10 percent of my merchants – I actually give them a line of credit, and on those guys, I am making more revenue than everything else I am doing combined.' At that point, giving away processing, or cutting it way below market as an acquisition strategy, makes a whole lot of sense."
Pearl Capital was founded in 2006 to provide financing to ISOs by selling merchant cash advance, which advances merchants funds based on the merchants' future credit card sales. The company focuses on using ISOs as brokers to finance underbanked merchant customers who typically would not be able to qualify for funding with other lenders.
"It's really a product for those who have personal FICO scores that are challenged but have robust or emerging businesses," Lax said. "In our case, we are willing to take a certain amount of risk on an emerging business that hasn't been around for five years."
Pearl Capital helps ISOs offer financing to their merchant customers through its white-label product, which allows ISOs to provide financing as if it is their own product, while Pearl Capital does all the behind the scenes work processing the loans. ISOs also receive commissions on top of their payment processing residual payments. And if an ISO wants to receive more than just a commission, Pearl Capital offers a syndication program that offers profit sharing. "The cost of acquisition for brokers has gone up and many of them are turning to the idea of syndication as a way to make additional economics that makes some money," Lox said.
Pearl Capital is able to make underwriting decisions to finance customers quickly. "I would say from the time that we have the information until we grant the offer is less than an hour," Lox said. "From that point on, most of the back and forth is if you aren't dealing with a direct situation where the merchant inputs all the data, gets the downloads and says they'll take the financing."
In the future, Pearl Capital plans to deepen its relationships with ISOs and partner with them to help them better achieve their goals. "At the end of the day, it's not about whiz bang technology," Lax said. "It's about the harnessing, adoption and utilization of technology."
He added that it's ultimately about being able to focus on the end customers and determining what they are trying to do and what they need to accomplish their goals. "Stop trying to think about providing just a commodity product," he said. "The future for Pearl is to evolve or die, fill your customer needs, and go home. Be the best partner and deliver the most value and that is what we are dedicated to."
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Company Profile originally appeared in
The Green Sheet Issue 170101
220601 - Nationwide Payment Systems
211102 - Kalamata Capital Group
210701 - Choice Merchant Solutions
200601 - Delta Payment Solutions
190802 - Credit.net, a division of Infogroup
190702 - Samsung Electronics America Inc.
181201 - Network Merchants LLC
180902 - MainStream Merchant Services Inc.
180801 - Century Business Solutions
180502 - Priority Payment Systems Northeast
180501 - Merchant e-Solutions Inc.
180301 - Wirecard North America
180201 - Sysnet Global Solutions Ltd.
171202 - Secure Cryptopayments
171002 - National Benefit Programs LLC
170902 - Frates Insurance & Risk Management
170901 - DCS Holdings Group LLC
170802 - Apogee Payment Systems LLC
170702 - Active Software & Hardware Systems
170701 - Veratad Technologies LLC
170502 - Frontline Processing Corp.
170501 - Platinum Choice Bancard LLC
170201 - Electronic Payments Inc.
161202 - International Bancard Corp.
161201 - CSR Professional Services Inc
161102 - Digitzs Solutions Inc.
161101 - Residual Sheriff LLC.
160801 - DigiPay: Solutions Inc
160702 - CreditCardProcessing.com
160201 - Lead Tracking Systems LLC
151202 - Benseron Information Technologies Inc.
151201 - CardWare International Inc
151101 - Lion Capital Group LLC
150801 - Topcreditcardprocessors.com
150702 - Vision Payment Solutions LLC
150601 - Conformance Technologies
150502 - Global Processing Systems
150402 - Mercantile Processing Inc.
150401 - Field Guide Enterprises
150302 - Signature Card Services
150301 - Premier Payment Systems Inc.
150201 - Humboldt Merchant Services
150102 - Expansion Capital Group LLC
141102 - National Merchants Association
141001 - Instant Credit Manager
140902 - Merchant Cash and Capital LLC
140701 - National Transaction Corporation (NTC)
140601 - Total Merchant Services
140501 - Nationwide Payment Solutions
140501 - BPC Banking Technologies
140301 - Meritus Payment Solutions
140201 - Process Pink Payments LLC
131202 - First American Payment Systems L.P.
131102 - Evo Payments International LLC
131001 - Live Reps Call Center
130901 - Regal Payment Systems LLC
130901 - The Merchant Solutions
130802 - North American Bancard LLC
130801 - Payment Logistics LLC
130702 - Plug n Pay Technologies Inc.
130601 - U.S. Merchant Systems LLC
130402 - National Processing Co.
130202 - Charge Card Systems Inc.
130202 - Layered Technologies Inc.
130102 - Glazer_Kennedy Insiders Circle LLC
121202 - American Microloan LLC
121102 - Keep in Touch Systems Inc.
121102 - Merchants Choice Payment Solutions
121002 - Washington Bancard Merchant Services LLC
120902 - Central Payment Co. LLC
120802 - Royal Merchant Holdings LLC
120801 - National Benefit Programs LLC
120602 - Cardinal Commerce Corp.
120601 - Veritrans Merchant Services LLC
120502 - ExecuTech Lease Group
120502 - The Small Business Authority
120402 - Chargeback Guardian Inc.
120401 - Electronic Payment Exchange
120301 - Complete Merchant Solutions LLC
120201 - CSR - Compliance Solutions and Resources
120102 - Alpha Card Services Inc.
111002 - Lead Source Call Center
111001 - First Annapolis Consulting Inc.
110902 - Point of Sale System Services Inc.
110901 - Sage Payment Solutions
110801 - Century Payments Inc.
110702 - Creative Vision Studio LLC
110702 - Network Merchants Inc.
110701 - Capital Access Network Inc.
110602 - eProcessing Network LLC
110602 - Moneris Solutions Inc.
110502 - Paragon Application Systems Inc.
110401 - Merchant Implementation Services
110301 - FrontStream Payments Inc.
101202 - CheckAlt Payment Solutions
101102 - Impact Payments Recruiting
101101 - Global Electronic Technology Inc.
101002 - TriSource Solutions LLC
100802 - Federated Payment Systems LLC
100801 - Voltage Security Inc.
100601 - NETSURION (formerly Vendor Safe Technologies)
100502 - Transaction Network Services Inc.
100402 - Secure Payment Systems Inc.
100401 - Elite Merchant Solutions
100302 - Retail Decisions Inc.
100102 - Payment Alliance International
091201 - Performance Training Systems Bankcard Boot Camp
091101 - Merchant e-Solutions Inc.
091002 - Whitehall Capital Advisors LLC
090901 - CoCard Marketing Group LLC
090801 - First National Merchant Solutions
090701 - checXchange Money Transfer Systems Inc.
090601 - Sterling Payment Technologies
090502 - Infinity Payment Systems
090501 - Merchant Cash and Capital
090401 - UseMyBank Services Inc.
090401 - Data Delivery Services Inc.
090302 - Velocity Merchant Services
090302 - Metro Merchant Services
090301 - Smart Transaction Systems Inc.
090301 - DCC Merchant Services USA LLC
090202 - TransFirst Holdings Inc.
090201 - ACH Payment Solutions
081202 - Affirmative Technologies Inc.
081201 - On-line Strategies Inc.
081101 - Vision Payment Solutions LLC
081002 - Veratad Technologies LLC
081001 - International Merchant Solutions LLC
080801 - GreenSoft Solutions Inc.
080702 - Smart Circle International
080601 - International Bancard Corp.
080502 - DRG Telemarketing Inc.
080501 - BCC Merchant Solutions
080402 - U.S. Merchant Systems
080401 - Greystone Business Resources Corp.
080302 - Transmedia Payment Services Ltd.
080102 - Sonoma Technical Support Services
071202 - Barclay Square Leasing Inc.
071102 - FirstView Financial LLC
071001 - Sage Payment Solutions
070902 - YourTownMall Business
070901 - Nxgen Payment Services
070802 - All card Processing-AAMonte-USA
070801 - Money Movers of America Inc.
070602 - Central Point Resources Inc.
070601 - Positive Feedback Software LLC
070502 - Premier Payment Systems
070501 - Amacai Information Corp.
070402 - National Bankcard Systems