The Green Sheet Online Edition
December 22, 2008 • Issue 08:12:02
A net gain for payments
Casey Leloux, merchant level salesperson (MLS) and Vice President of Business Development for NetDeposit Inc., began his sales career, so to speak, as a missionary in Japan for the Mormon Church. Spreading the message required cold calling, face to face meetings and knocking on doors.
When Leloux (rhymes with deluxe) returned home, he was told the family business was faltering, and he would have to pay his own college tuition. So on his next summer break, Leloux began selling knives for Cutco Cutlery. He was the number three salesman that year and went on to be a national recruiter and sales trainer for Cutco over the next two summers.
When he graduated from college, Leloux worked as a headhunter for a software company. And when the dot-com bubble burst in 2000, Leloux found himself once again at a crossroads.
The Green Sheet: What brought you into the payments industry?
Casey Leloux: When the software company I worked for laid me off and kept getting my residuals after I left, I decided to start my own company, Modern Payments, so I could do things my way.
I had a buddy who was a software programmer. He was working on an ACH [automated clearing house] solution, and the person that he was working with lost interest. So, you had a software guy without a sales person and an agent without a good product to sell.
We found out we were a good fit for each other. So, we got together and decided to go out there and hit the market. We kind of backdoored the credit card world through our ACH software, but we realized we needed to have a combined offering of both services. So, we put that together, built up the company, and had tremendous success with that venture.
GS: What was the genesis of your partnership with NetDeposit?
CL: We got an introduction with NetDeposit a few years ago from Zions Bancorp when they bought us out back in 2005. They had the software and the intellectual property, so it made sense to bring the two companies together.
With NetDeposit's remote deposit capture [RDC] solutions, we could now be a one-stop processing platform. So, we merged with NetDeposit to offer a combined payment platform.
GS: How has your experience evolved and grown with NetDeposit?
CL: I've been able to get a tremendous amount of experience and training in all three areas, RDC, ACH and card processing.
My new role with NetDeposit now is Vice President of Business Development, so not only do I go out and board merchants that may come to us directly, but I am also in charge of going out and signing up new ISOs and new business partners to help drive revenue for NetDeposit.
GS: What are some of the biggest challenges you face today in dealing with merchants?
CL: Getting time for the merchant to sit down and take a look at their payment processing is key. If I can sit down with a merchant and go over how they're taking their payments, it gives me a chance to introduce new payment options instead of coming in and asking for their last three months of statements and offering them a better price.
I have an opportunity here to be more of a payment processing consultant, to say, let's take a look at what you're doing, and where's your pain?
GS: What solutions do you offer merchants to help ease their pain?
CL: Well, if the merchant lets me know that they're having trouble with their receivables that could be as much as 60 to 90 days out, I can say, well, how would you like to take payments over the Internet, or put customers that owe large balances on recurring payments or automated installments?
I am always looking to see how I can improve a merchants' overall payment receiving methods.
If their checks are bouncing, I get them to take a look at scanning checks and making them into ACH transactions so they get processed faster. There's always a much better strategy if you're personally invested in your merchants.
GS: Why do MLSs have to be consultants in addition to sales agents?
CL: How do you avoid being a consultant and a partner to your merchants nowadays? MLSs used to say, fax over your three-month statements and I'll beat you by five basis points. Those days are over. I know a lot of guys that have lost business over two or three basis points.
You have to come in as a partner and solidify the relationship. The merchant needs to see you as someone who is knowledgeable in the industry. If you are, they say, this is my personal payment consultant. If I've got a question I know I can come to this guy. And, he accelerates my receivables and gets me my money faster. Why would I want to go with someone else?
GS: Is it difficult transitioning to more of a consultant's role?
CL: Yes, absolutely, that part has been challenging. The process is to stay up on current events - what's new, the latest and greatest in the payments industry. That's where NetDeposit has really helped me. But we've got the resources to make those types of things happen.
GS: How can MLSs sharpen their sales techniques and take a more personal approach to make them stand out to merchants?
CL: You just can't come out anymore and say, hey, I'm a payment processing consultant. You need to be able to use different lead-in scenarios. Ask the merchant if he or she is taking payments over the Internet. Or ask, would you like to take a look at our online payments page or our automated recurring payment installment plans?
Merchants get so many calls a week from competitors who promise to lower rates or give free terminals. You have to come at them with something different they haven't heard. Get your nose in the tent; make it an educational sale instead of price and displacement sale. Show them what you can bring to the table.
GS: Do you focus more on e-commerce than you do on brick-and-mortar merchants?
CL: I have a variety of brick-and-mortar merchants in my portfolio, but I deal mostly with MO/TO and e-commerce because the software that TotalTransact uses is really built for a billing and collections process. If merchants mailing out invoices want their vendors to pay online, we have an online payment page.
We can also help them take payments over the phone. I find that merchants don't want to wait for a check in the mail, which makes it easier to get the deal signed for the automated and recurring payment plans.
GS: You also process mobile banking payments. What verticals are you pursuing as an extra value add?
CL: Well, we've already been looking at being able to process transactions through an iPhone, other cell phones or a PDA [personal digital assistant]. And this is a huge potential market.
You've got taxi cab and limousine companies, AAA, delivery drivers. Rather than risk hand-delivery of checks at the end of a business day, a driver can pull up the iPhone or other device and process the transaction with all pertinent information as well as truncated account numbers.
GS: What verticals do you focus on and what creates the best revenue streams for you?
CL: We like the medical, nonprofit and municipalities industries. Collections seem to work well for us with our ACH product.
But with industries like health care, schools, nonprofits, even some brick-and-mortar, I can't tell you how many small businesses we have still mailing out invoices, waiting for checks to come in.
We can offer them payments in real-time while simultaneously cutting the merchants' administrative costs.
GS: Why do you think the medical and dental verticals will remain a consistent source of revenue?
CL: Even with the way the economy is now, patients still need medical care. The economy goes up, it goes down, but people still get sick. What we're finding is that the medical industry is struggling to collect payments from patients. The nice thing about my software is the merchant can open up all payment channels.
Additionally, doctors' receivables are now more current, and they don't have to wait weeks or months for those checks to come in the mail.
GS: What new products and services is NetDeposit developing or in the process of implementing that you are excited about?
CL: We have a new product called NetDeposit TotalTransact, and this software offers a complete, comprehensive payment solution. We want our merchants and ISO channels to know that with the TotalTransact solution, payments can be taken over the phone and the Internet.
We can also set up recurring automated transactions, do check processing, BOC [back office conversion] and card present transactions.
GS: What marketing strategies will NetDeposit use to expand its footprint in the health care vertical?
CL: I think you'll see that in 2009 NetDeposit is really going to make a push to go with medical associations and get the word out about our TotalTransact service offering. Medical billing companies are signing up with us and then reselling us to their doctors and dentists. And we're also using our ISO channel to reach new markets.
GS: Maintaining merchant stickiness and keeping prices low is a balancing act in the payments industry today. How do you find that balance, and has this changed the way you do business?
CL: Well, we target merchants in the virtual business and e-commerce area, so I'm not walking in with a free terminal and trying to compete that way. For me, it's more finding out what I can do to help a business automate their payments and make it easy for them.
Whenever I can get in front of someone, I demonstrate the software, and I tell them that it's a buffet. They can pick and choose what they want and we can go from there.
What's really been successful for us is once merchants start using our software, outside competition
disappears. The merchant has all receivables on one program, and this has allowed me to maintain loyalty and avoid attrition.
GS: Has The Green Sheet been helpful to your career?
CL: Yes, it has. I can stay up with the industry, see what my competition is doing, what other processors are doing. You've got great information and feedback in there about what the government is doing. In addition, The Green Sheet helps me stay educated and know what's going on in the marketplace. And when my boss suggested I answer some questions for this article, I was pretty excited about it.
GS: How do you generate new leads?
CL: Tradeshows. Web sites. A lot of people will go to our Web site, looking for a solution. And a lot of our ISOs have signed up with us through word of mouth.
GS: Was there an "aha" moment when you knew you would succeed in this business?
CL: When I started my company, I was also trying to start a medical billing company. The funny thing is I would offer the medical billing software, and they would say, Casey, we really like you, but we don't want your billing; we want your payment processing software.
The light bulb came on, and it didn't take me long to say, forget the billing thing, I'm doing payments from here on out.
GS: Do you have any advice for newbies coming into the payments industry?
CL: Find a niche. Find something you are good at, and go for it. If you have to open up the Yellow Pages and start calling people, that could be frustrating. But if you can find a niche, something that maybe you can get a start in, then you can build a small customer base.
I've asked agents if they have a family member or friend that has a medical practice or business, a vertical that you have a knowledge base in. Get your feet wet with that vertical, build it, and then once you start to feel confident you can branch out.
GS: Do you have a philosophy on life or a motto by which you live?
CL: Find a positive opportunity in every disaster. I try to make sure that even when things don't go so well, I ask myself, what did I take from this, and what did I learn from it? You can't win every fight, every battle, but hopefully, you're winning the war. Just keep your focus on the goal if you want to be successful.
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