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Next PMT?
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A In
fact, in the past six months MSI has completed a number of portfolio
transactions, which represents the addition of 20,000 merchant accounts.
More importantly, MSI’s appetite for these ongoing expansion efforts
shows no signs of slowing down. To further substantiate their commitment
to this growth model, MSI recently contracted with Bancard Consulting
Group, a Nashville, TN based management consulting and software
development firm, for purposes of identifying and negotiating future
acquisition opportunities. At this time, the tandem is in discussions with
six rival ISOs in an effort to secure additional pieces of business. Look
for developments in upcoming GS
issues. Staggering
Growth Founded
in 1989, MSI had been successful in maintaining a profitable merchant base
and managing a rate of sustained growth. In 1995 Ray Sidhom, current
President and CEO, joined the company with an eye toward the future. Ray
knew that for MSI to experience the level of success they aspired to, they
would need to develop and cultivate their distribution channels. Over the
last five years, MSI’s direct & indirect sales force has increased
approximately 270% from 240 representatives to more than 600 as of January
1, 2000. That growth bred a significant increase in revenue numbers to the
tune of 280%. If that is not impressive enough, how’s this: In 1999
alone, revenues grew 700% over the previous year. Annual processing volume
for 1999 was in excess of $1.2 billion and the company forecasts volumes
for 2000 to increase to $2.1 billion. Recent
Developments In
January MSI purchased a significant portfolio of merchant accounts from a
Dallas, Texas based acquirer, for an estimated $5 million. Through the
acquisition, MSI added approximately 8,500 new merchant locations to their
existing customer base of 40,000 merchants. Sidhom commented that he
expects this transaction alone to grow the company’s annual revenues by
25 percent, from its current level of $10 million to roughly $12.5
million. The
expanded merchant base that this acquisition provides should also drive
down MSI’s operating expenses, and reduce costs per transaction by 20
percent. “This venture gives us the ability to leverage volumes in an
effort to significantly reduce transaction costs while fueling the
continued expansion of our organization during what has been a period of
record revenue growth,” Sidhom said. In
November of last year, MSI announced that NDC eCommerce would provide
electronic payment and processing services to their retailers nationwide.
“The relationship we have structured with NDC eCommerce gives us the
flexibility required to compete for merchant and ISO business at any
level,” said Sidhom. “Our goal is to provide the highest levels of
customer support at the most aggressive pricing levels.” NDC eCommerce
now provides electronic authorization, voice authorization, data capture,
merchant account, and exception processing services to MSI customers. Real
Business Solutions Merchant
Services Inc., offers a variety of processing options which allows them to
approve up to 98% of all merchant applications. MSI offers the traditional
credit card processing alternatives, but they also provide EBT, ACH, ATM,
check guarantee, equipment purchase and leasing, phone card activation,
signature capture, gift card, loyalty programs, e-commerce, and debit
services to more than 40,000 businesses across the country. By July of
2000, MSI expects to offer all of these services via a single application,
thus enhancing its competitive position in the marketplace and making it
an extremely viable option in the ISO marketplace today. MSI’s
solutions operate on a variety of terminal platforms and are designed to
integrate with existing hardware and software. MSI also offers its
affiliates the ability to customize their card acceptance programs by
choosing to deploy certain products and services now, while maintaining
the option of broadening the scope of their program at a later date.
Because of its alliance with NDC, MSI is capable of delivering
aggressively priced “buy-rate” and revenue sharing programs to ISOs
and resellers today. Starting at interchange plus $0.16, MSI provides it
affiliates with the ability to earn income streams on virtually every
aspect of the merchant/processor relationship (including non-qualifying
interchange, minimums, and annual fees). In
November 1999, Hypercom became MSI’s exclusive provider of card payment
systems. Since that time they have deployed in excess of 25,000 Hypercom
payment systems which included the T7 terminal family, S8 PIN Pads, and
ICE 5000 terminals. MSI also offers a variety of POS products from
VeriFone and Lipman. Merchant types serviced by MSI include retail, high
risk, home-based, MO/TO, and Internet e-commerce solutions. MSI
will be hosting its first annual sales agent conference in New York in the
fall. MSI invites industry sales representatives seeking professional
guidance, training, and new opportunities to attend. Additionally, in
planning an expansion of its NY-based operation to over 30,000 square
feet, MSI is hiring individuals with bankcard experience from sales
representatives to senior management. For more information about
employment opportunities contact Jeff Rosenblatt, Vice President of
Operations. Regarding the upcoming sales conference, contact Phil Ludwig,
Vice President of National Sales. Both individuals can be reached at (516)
479-9000, (800) CARDSWIPE, or visit MSI’s
Web site.
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