The Green Sheet asked some of its Advisory Board members what they are doing to stay strong in an uncertain economy.' />
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Table of Contents

Lead Story

Gen Y poised to rock payments

News

Industry Update

Senate committee brings interchange to account

W.net set for Boot Camp

Opening Pandora's Box?

HMS' parent sold

Alleged TJX cyber criminals indicted

Payments primed for new growth

To listen actively

Vicki M. Daughdrill
Small Business Resources LLC

Features

GS Advisory Board:
What's up in this downturn? - Part I

In transit with the unbanked

ISOMetrics:
Generation Y not?

Views

Banking on generational changes

Patti Murphy
The Takoma Group

Education

Street SmartsSM:
Telemarketing - The horn of plenty

Jason Felts
Advanced Merchant Services

Bold new mode in modems

Dale S. Laszig
DSL Direct LLC

It really isn't what you know

Nancy Drexler
SignaPay Ltd.

The buyers are back

Lane Gordon
MerchantPortfolios.com

To listen actively

Vicki M. Daughdrill
Small Business Resources LLC

The buyers are back

Lane Gordon
MerchantPortfolios.com

Company Profile

IMS Inc.

New Products

Mirror success with facecard

facecard
Company: edő Interactive

Data breach insurance has your back

Merchant Data Security Policy
C.L. Frates and Company

Inspiration

Burnish legacy with mentoring

Burnish legacy with mentoring

Departments

Forum

Resource Guide

Datebook

A Bigger Thing

The Green Sheet Online Edition

August 25, 2008  •  Issue 08:08:02

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What's up in this downturn? - Part I

Recent upheavals in the banking sector may not compare to the terror Orson Welles' fans experienced in 1938 when they thought his broadcast of H.G. Wells' fictional "War of the Worlds" was a real disaster unfolding as they listened. But consumer and investor fears over our country's economic performance are palpable.

Granted, the signs are ominous. Yet each time we go through a downturn, we recover. Each time our country bounces back stronger.

It appears we are a nation of strong-willed, eager visionaries able to see the silver lining. The Green Sheet wanted to know what our Advisory Board luminaries are doing to strengthen their companies in an uncertain economy, so we asked them the following:

Here is the first portion of their answers. The second segment will appear in an upcoming issue of The Green Sheet.

Sam Chanin
Tribul Merchant Services LLC


A. Our mission is to provide high-impact, relevant and timely services to the merchants we serve. Clearly, this economy has been particularly tough on the small to mid-sized merchants that our Tribul Merchant Services, BPS and 2nd Source Funding business units focus on, and it is our mandate to help them effectively overcome these conditions.

By being successful in our mission - which places the customer first - we will, in turn, be successful. If we fail our merchants, then we, too, deserve to fail in our business.

Thus far the record shows that our merchants are weathering the economic storm quite well by taking advantage of the many new and exciting products we have for them, and we expect this will continue.

B. We have several relatively new proprietary services that have been extremely well-received, and we have a robust pipeline. These services are targeted to individual market segments, all built around advanced technology intended to both increase merchants' income and reduce their operating expenses.

For instance, we have broken out a new product that reduces a restaurant's operating expenses while also allowing them to serve more food and drink by turning over tables more rapidly.

Because we are market-driven, there will undoubtedly be many more new opportunities, and our research and business development teams are constantly evaluating product/service line extensions that will help us fulfill the company's mission

C. We continually evolve, so I'm sure BPS, Tribul Merc-hant Services and 2nd Source Funding will all look quite different than today, but the fundamentals and approach will be the same.

Accordingly, we are oblivious to any talk about downturns because we are on track to grow at unprecedented rates by doing right by the market we serve.

Peter Estep
National Bankcard Systems Inc.


A. I think one of the biggest impacts so far has been the gas prices on our outside agents. We have a lot of agents who cover a large geographical area, and they have really been hurt by the rapid rise in gas prices.

Overall the number of accounts we are doing each month has increased, but we have seen an increase in our attrition level. It seems like we are doing more startup businesses that have a higher attrition rate, along with the failings of some of our existing merchants.

B. We have focused on increasing our agent recruiting effort, combined with several capital programs for our merchants. We rolled out a lead-setting program for agents to make the most use of their time.

It's so much better to have some hot leads than to be constantly knocking on doors all the time.

For our merchants, we have also focused on several capital funding programs, as well as a business credit card to help with their cash needs.

C. One of the best things that happens during a hard stretch is that you can come out of it better than you were when you entered. When every dollar matters more than ever, it's easier to streamline the inner workings of a company and make it operate more efficiently.

We see ourselves in a great position when the economy does decide to rebound because our business will be working more efficiently than before, and we will have optimized the services that really matter to our customers.

We will have a better ability to promote and support our existing service, which will reduce operating costs and increase our level of customer support.

Honestly, I'm more worried by the potential legislative actions on interchange than I am by the economy.

Jared Isaacman
United Bank Card Inc.


A. I believe hard times promote innovation, creativity and determination. When things are going great there is no reason to find room for improvement.

Right now, business has been as strong as ever at United Bank Card. Our general philosophy on innovating new products and services has given us a tremendous edge in today's economic troubles.

Our latest core product offering revolves around a POS division, HarborTouch, that is advantageous to small-business owners by helping them generate new and additional forms of revenue.

The HarborTouch POS helps the small-business owners in a tough economy and gives an auspicious product to thousands of our ISO partners who are looking for ways to differentiate themselves.

B. In today's economy we have to show our merchants that we can do more for them than just "save" money.

Unfortunately, that is what our industry has been accustomed to for the last few years. All of our latest initiatives are about helping our merchants and our ISO partners make more money.

With the HarborTouch POS system a business owner has a substantially better chance of weathering a difficult economy. A great example of this would be restaurants.

If you think about it, the single biggest goal for a restaurant owner is to get as many customers as possible in and out of the tables in a given evening. A POS system has the capability to do that, not a credit card terminal.

With HarborTouch POS, the orders are transmitted accurately from the server to the bar or kitchen.

Orders are electronically organized and, when completed, are automatically totaled. This creates a fast and accurate atmosphere to get restaurant customers in and out in the most efficient manner.

If that frees up 10 additional tables a night with an average ticket of $50 per table, that means $500 more in revenue per night for the restaurant owner.

When you compare the process to a restaurant operating a typical credit card terminal - there are no advantages in communications, tracking or even totaling the receipt.

The process is handwritten, potentially illegibly, on a piece of paper and walked back and forth between the kitchen, bar and tables. When the meal is completed, the ticket has to be manually calculated, which is a time consuming process.

This is far from an efficient environment and will not benefit the restaurant owner or the ISO who represents the merchant.

At United Bank Card we have embraced the economic advantages our HarborTouch POS system will create for both our merchant customers and ISO partners.

C. I anticipate United Bank Card being stronger than ever with a focus on technological systems to help our merchant customers and ISO partners succeed in even the most difficult of times.

Jerry M. Julien
Equity Commerce LP


A. Our company has always been very cautious and conservative with our money - even prior to the downturn of the economy.

By not leveraging the company, not having large open lines of credit or tying ourselves to one product heavily (like cash advances), we have been able to not be impacted as much as some other companies may have been.

Our number of deals or monthly volumes from existing accounts may be down; however, while we may have reduced income, our expenses have been maintained, easing the impact.

B. By positioning ourselves with positive balance sheets and cash flow, we feel there will be opportunities to attract experienced agents and their portfolios, as other companies may not weather the economic downturn and won't survive.

C. The changes in the economy and in our industry - from regulations and congressional involvement - will present challenges. However, they will also provide new opportunities. The companies that survive these hurdles are aware of the challenges; they can identify the opportunities and will be able to take advantage of them and flourish.

Allen Kopelman


Nationwide Payment Systems Inc.
A. We are looking at our existing customers, and we have to maintain them and not lose them to low-price bait and switch companies. Also, with the high price of gas, we are doing less driving and using more UPS and more telemarketing.

Telemarketing is up, as we are getting calls from merchants telling us they are getting calls. There are always opportunities. We are finding many businesses that never took cards before want to get set up to take credit cards because they need them to collect money from their clients.

B. The next trend is going to be the switch from terminals to software, and we are there already. We got started some time ago, and it keeps growing.

C. We will be stronger. The companies who sell too low will not be able to provide customer service and will lose clients.

Recently a large client told me that their bank and several other companies came in with lower prices, but when they asked them questions about customer service and the people had no answers, they were not confident that they could get a level of customer service that would be even close to what they are getting now; for $50 less a month, it was not worth it to switch. Then they told me they are opening two more locations. We will come out of this stronger, and it will put the pretenders and low-price guys out of business.

Douglas Mack
Card Payment Systems Inc.


Frankly, it seems this or another variation of this question keeps coming up again and again. And I just don't see it. Don't get me wrong.

I am not denying there are broad economic issues. We have seen more clients closing their doors this year than last. However, processing volume is still on the rise - per merchant. That just means - sign more merchants. The strong will survive.

So with all due respect, what's the deal? Why do we keep getting the same or similar question about how "bad times are affecting us"? I mean, jeez, this is, what, the third time some variation of this same question has been posed to the board?

How about we instead focus on how our industry is progressing, how technology is advancing and so forth. What happened to the questions we used to get about how to increase sales and retain clients?

I used to look forward to reading what other people - bigger and better than I - had to say to those types of questions. I personally don't think anyone cares what our opinion is about a bad economy. They hear enough about that. Not to mention: It's our opinion, and you know what they say about that.

I think readers would much rather learn from what they read in. We, in my opinion, are some of the luckiest people in the United States of America.

I know of no other business that offers the type of reward we get for the effort we put forth. Period. Let's focus on how to make our industry better, not the same tired issues all the rest of the media are feeding on.

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

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