GS Logo
The Green Sheet, Inc

Please Log in

A Thing
View Archives

View PDF of this issue

Care to Share?


Table of Contents

Lead Story

Marketing: Are you in or out?

News

Industry Update

Could community bank loans help the payments world?

Heartland settling up with Visa

Card sales' decline no longer accelerating

Card brand financials remain positive

Trade Association News

Features

AgenTalkSM:
Anthony Martin

Glossary of common data security terms

Selling Prepaid

Prepaid in brief

From plastic to virtual: Evolution of stored-value

Walter Paulsen
Giiv Inc.

Views

Debit rules and other musings

Patti Murphy
The Takoma Group

Education

Street SmartsSM:
Look ahead, show you care

Jon Perry and Vanessa Lang
Merchant Services Inc., Fort Worth, Texas

POS unplugged

Dale S. Laszig
Castles Technology Co. Ltd.

Claws in merchant contracts

Adam Atlas
Attorney at Law

Managing your fraud risks

Nicholas Cucci
Network Merchants Inc.

Company Profile

IPP of America Inc.

New Products

Tracking the ISO beehive

Merchant Flo
CurveNorth

Getting merchants to pay micro-ly

Payfast
Integrity Payment Systems and
Quicksilver Payment Solutions LLC

Inspiration

Curing merchants' sales colds

Departments

Forum

Resource Guide

Datebook

A Bigger Thing

The Green Sheet Online Edition

February 22, 2010  •  Issue 10:02:02

previous next

New Products

Getting merchants to pay micro-ly

Product: Payfast

A partnership between processor Integrity Payment Systems and payment solution provider Quicksilver Payment Solutions LLC has resulted in a new service that uses a process modeled on merchant cash advance collection to facilitate merchant bill payments. The service, Payfast, is built, serviced and installed by IPS, while QPS is helping to market it.

According to the proprietors, the idea for Payfast came from the unique method of debt collection used in the merchant cash advance business, where providers take a fixed percentage - known as a "split" - of a merchant's credit card receivables daily or weekly until the advance is fully repaid.

Similarly, Payfast uses a software program - hosted on the IPS server and installed into a merchant's POS system - that diverts a fixed percentage of Visa Inc. and MasterCard Worldwide credit and debit card receivables to one or more bill collectors.

For example, rather than paying the landlord with a lump sum every month, a merchant makes automatic and incremental micropayments until the monthly bill is paid in full. Upon settlement, the split process is typically decommissioned until the following month when the process starts anew with that month's tab.

"Think about a landlord who owns a shopping mall and he's got 20 or 30 kiosks which are high risk," said Frank Capozza, Chief Executive Officer of QPS. "We would say to them, 'It's very simple. You'll dedicate 10 percent of your Visa/MasterCard sales until your $5,000 rent is paid.'

"This way, a landlord gets paid a small portion of the rent every day. Nobody's waiting 30, 60, 90 days for any kind of payment, only to find out he's got to take a guy to court because he's going to default."

Mutually beneficial

Payfast's providers say the arrangement benefits both bill collectors, who automatically receive payments on money owed, and merchants, who pay off allowances incrementally and thus avoid being saddled with giant payments at the end of a billing period. It also spares merchants the logistical headache of conventional bill pay.

Furthermore, diverting a fixed percentage of merchant receivables means payments fluctuate with the volume of a merchant's transactions each day, making them more manageable, Capozza said.

The split arrangement depends on an agreement entered into by both the merchant and the bill collector(s). According to Capozza, the service can split a merchant's payments to as many as 50 parties - be they landlords, purveyors or tax collectors.

Flexibly conditional

The arrangement is completely flexible, Paysafe's providers say. To avoid straining merchant clients, "I'd personally like to stay around a 10 percent split," Capozza said. He added that split sizes vary depending on the contractual terms. Each arrangement also dictates the frequency of collection, which can happen daily, every few days or weekly.

According to Mike Ponder, President and CEO of IPS, the size of the split is generally determined by a combination of human and computer calculations, based on factors like merchant sales volumes and size of debt. He added that the split process discontinues upon fulfillment of payment until the following pay period.

"We have to settle out before we move any money - strip out today's incoming file from the receivables from any collection efforts," Ponder said. "So once a bill is paid, that stops getting taken out."

Payfast also includes a Web portal that both merchants and collectors can visit to view the progress of bill payments. Ponder said the micropayment software that runs Payfast is installed in all IPS-issued terminals and can also be retrofitted to most existing POS systems.

Integrity Payment Systems
888-477-4500
www.integritypaymentsystems.com

Quicksilver Payment Solutions LLC
877-572-9327
www.quicksilvergroupllc.com

Notice to readers: These are archived articles. Contact names or information may be out of date. We regret any inconvenience.

previous next

Spotlight Innovators:

North American Bancard | USAePay | Super G Capital LLC | Humboldt Merchant Services | Impact Paysystems | Electronic Merchant Systems