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Spotlight Innov
Spotlight Innovatorsators

ounded in 2001 and headquartered in Memphis,
Tennessee, Impact PaySystem made their mark
on the payments industry with their Petroleum
F Services. Impact’s Executive Team is composed
of industry veterans, with over 75 years’ combined expe-
rience implementing creative solutions for their custom-
ers. Through strategic alliances with industry leaders
like First Data, Elavon, and Vantiv, Impact PaySystem is
able to design unique solutions for merchants’ individual
needs. Product solutions include credit and debit card
processing, PIN secured and signature-based debit, wire-
less solutions, gift card, check services, loan products,
Click2Don8 proprietary donation product and develop-
ment services.
What’s New:
Competing against

payment aggregators

hen payment aggregators such as Square and Paypal entered the market-
place, it presented a significant challenge for legacy merchant services pro-
viders. It didn’t matter that the traditional payment companies could offer
W many merchants lower transaction rates and a far more stable contract in
the long run; the formal application and underwriting review process was simply a bar-
rier that younger merchants could not get beyond. Thus, the payment aggregators found
a niche market to pursue. These merchants would risk convenience over price just to be
progressive and offer electronic payment options to their customers, but most of them didn’t realize this decision could
have long-term financial impacts on their business.

“The ambition of a business owner is to grow a company, but early on, growth can be very difficult to predict or plan
for,” stated Emily Karawadra, President of Impact PaySystem, Inc. “This lack of foresight is what drives so many young
businesses toward using payment aggregators and it can become a tough contract to be locked into.”
Growth penalties

According to Karawadra, as these young businesses grow and mature, the decision to use a payment aggregator begins to
hurt them exponentially. “When a company’s monthly volume and average ticket values change, so do the rules in most
payment aggregator contracts,” she explained. “Once a merchant goes outside the volume parameters set up in the original
contract, the aggregator then decides to underwrite them - so to speak - by re-evaluating their usage.” Consequently, when
the merchant hits certain growth thresholds, they are not only expected to continue paying the standard transaction rates
in the contract, but funds can get held, deposits may start to take longer to post, and they may even see extra fees being
billed. In many cases, this hits at a critical juncture in the lifespan of the business when they need consistent cash flow to
sustain. Even small financial setbacks can be catastrophic for a growing merchant to weather.

The result is a very frustrated merchant that can end up feeling like they are being penalized for growing their business.
Meanwhile, the payment aggregator they are doing business with keeps rolling over the service agreement, and all its
fees, month after month. The busy merchant often has a hard time reaching an actual person at the company to discuss
mounting delays and fees, and the process ends up consuming far more time than they have to spare.
A ripe opportunity to win business

For sales professionals in the payments industry, Karawadra feels this situation has presented an excellent opportunity
to educate these merchants, and it can also open doors to new business. “We have found the product offered by the
aggregators is not beneficial for the growing or large merchant, and it isn’t hard to sway them away from these big brands
toward more traditional and sustainable solutions,” continued Karawadra.

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