Alan Kleinman, Principal and cofounder of Meritus Payment Solutions, said he entered the payments industry "randomly." As a venture capitalist in the health care sector, he was exposed to the payment collection struggles of health care providers.
Then he helped structure an investment into an ISO and saw the opportunity to provide better payment processes based on technology and customer service.
With business partner Hiep Tran, Kleinman founded Meritus in 2008 and went operational in January 2009. Ironically, Meritus doesn't have a big footprint in health care. Instead, its portfolio breaks down to 55 percent card-not-present merchant accounts and the remainder brick-and-mortar retailers, Kleinman said.
The company's primary sales channel is its stable of several hundred ISO partners across the country. "We don't look at it as an owner-agent relationship," Kleinman said. "We look at it as a partner relationship. I'm a firm believer that they are partners. ... They're just an extension of us."
Most ISO partners write five to 20 deals a month, according to Kleinman. They sell Meritus services under a nonexclusive agreement and thus have the choice to work with other service providers. It's that competition for sales agents that keeps Meritus attentive.
"I see a lot of opportunity because some people are not taking care of their sales forces out there," he said. "And I'm a big believer that you have to. That's paramount."
When Kleinman and Tran started Meritus, they realized success rested on their ability to target vertical markets and develop solutions designed specifically for businesses in those markets. "We spent eight, nine months of building software before we ran our first transaction," Kleinman said.
Meritus is therefore a technology-driven ISO. Kleinman points to its internal merchant management system, called Zeus, as a hallmark of that focus. Zeus tracks Meritus' enterprise-wide network of resellers, from sales leads generated by agents to risk management of merchants.
"What [Zeus] does is it makes sure we have a very smooth operation," Kleinman said. "We wanted to be able to compete with anyone in the business. And to be able to do that we had to be 24/7 when we ran our first merchant. We had to be scalable. We had to have an experienced team. We had all those things in place day-one."
A mentor imparted to Kleinman a phrase he often repeats: discipline creates freedom. It's not just a catchphrase for Kleinman, but a business philosophy. Meritus displays discipline in how it recognizes the needs of merchants, as well as in its technology, Kleinman said.
"We're really identifying what are the merchant's needs and how do we improve [their] productivity and profitability," he noted. "It always goes back to that. And if we're able to do that, we are providing a solution that others aren't doing and that's our advantage."
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