Following is the second set of responses we received from members of The Green Sheet Advisory Board. The questions we asked were:
We published the first group of replies on June 10, 2013, in issue 13:06:01. We wish to convey our sincere appreciation to all Advisory Board members who participated.
1. CrossCheck is focused on two businesses: payment guarantee and debt collection. On the guarantee side, we focus on higher approval ratios and higher dollar payments, as opposed to just verification or low-dollar payments. This makes us a pretty unique solution for merchants that need guarantee. On the collection side, we have a low-cost, high-value web-based product that collects unpaid A/R, something that all merchants need, but cannot do very well themselves.
2. Our most promising development has been our Check 21 imaging product. The key to our business is being able to collect failed payments as quickly as possible, which minimizes our write-offs. Now, merchants run their checks through the imager, and we do their banking for them. The return items come back to us the next business day, which allows us to start the collections process much sooner than before. This has increased our collections effectiveness, which we have translated into lower rates for merchants. Last year, we ran a billion dollars in payments on this system.
3. After 30 years in the payment guarantee business, we think we understand the technical and operational challenges we face, but we are concerned about the increasingly burdensome regulatory environment for everyone in the payments system. We have two full-time attorneys on staff just to navigate the regulatory and compliance environment. The penalties for making a mistake are severe. Our depository banks and our processors are likewise extremely sensitive to the regulatory climate, which has a chilling effect on some merchants who are finding it difficult to find an originating depository financial institution, for example.
4. We believe that the opportunities for helping our merchants make sales have never been greater. We authorize and guarantee a stream of high-dollar payments, without underwriting the consumer or charging the consumer interest.
At least half the consumers in the country need our product to purchase a high-ticket item; they do not have an open credit card account, nor do they have that much in the bank. At the crucial moment at the POS, we stand in and guarantee a stream of payments to be deposited later, allowing the consumer to drive home with a new car, or a contractor to buy a truckload of sheet rock.
We also see an increasing trend for merchants to demand a payment platform that does not charge them burdensome interchange rates, and we see that trend accelerating.
1. We focus on data security: specifically, securing payment transactions as well as helping merchants achieve, validate and maintain PCI compliance. We work with merchants directly, but our primary customer base is comprised of ISOs, acquirers and other payment service providers who want to deliver innovative, secure, hosted payment and PCI-compliance solutions to the merchants they serve.
2. Data security is an ongoing challenge, as cybercriminals continue to find new ways to bypass IT protocols. The Level 4 merchant - a designation for small to midsize businesses (SMBs) - has always represented "low-hanging fruit," because they often fail to implement and maintain the most basic security best practices. Our annual study of ISOs and acquirers shows that in the past three years, 64 percent of survey respondents have instituted a formal PCI compliance program to educate and empower their Level 4 merchants. Data from the same survey shows that these programs do produce higher compliance rates for Level 4 merchant portfolios.
ControlScan's dynamic hosted payment page is another important development, because it enables e-commerce merchants to securely accept payments via mobile, MO/TO, e-wallets and more, while reducing shopping cart abandonment through brand continuity and an enhanced checkout experience.
4. As EMV adoption occurs within the United States, card-not-present payment fraud and security issues will increase (this was seen in Europe, Australia and other early-adopter countries). Because of this, opportunity abounds for payment service providers and payment security experts like ControlScan to collaborate on solutions for the e-commerce space.
In addition, rapidly advancing consumer mobile technologies create the need for greater education and awareness of revenue opportunities in the SMB merchant space.
From a compliance standpoint, there is an opportunity to alleviate the business burden of multiple industry standards by taking a holistic approach to the PCI DSS, HIPAA and other regulations that address the security of payment and personally identifiable information.
1. Since eProcessing Network provides payment solutions across the entire merchant segment - distributed exclusively through the reseller channels - we address all solutions, e-commerce, mobile and retail, and the services that meet the needs of the SMBs.
2. Mobile applications, seamlessly integrated with a variety of payment and business solutions, are key to meeting the complete needs of today's merchant. Providing merchants with the same level of technology as seen in the latest hardware and POS machines, but greater portability and adaptability, is always within the forefront of ePN's development strategy.
3. Predicting and keeping up with the advances in hardware and designing compatible software applications is the focus of ePN. Offering solutions that are highly intuitive, secure and easy-to-use for transacting payments is key to the reseller and subsequently to the success of the merchant.
4. Combining business and payment solutions with new market opportunities, and providing a seamless utility within those new and burgeoning segments will help ePN continue to meet and exceed the payment processing needs of the reseller and their merchants.
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