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A One-Stop Shop

Electronic Payment Exchange (EPX), a full-service payment processing company, might be considered A Company of Firsts.   In 1994, EPX became the first to process a credit card transaction over the Internet, and the first to process an electronic check transaction over the Internet. A year later, they developed the first real-time online transaction reporting system for their clients. In 1998, the company was the first to offer electronic chargeback presentment online. In 2000, they were selected by NYCE to be the first payment processor to offer SafeDebit (see issues 00:05:01 and 00:08:01).

When EPX is not breaking new ground, they are delivering transaction and underwriting services that facilitate credit card, debit card, purchase card and electronic check payments through a variety of channels, including Internet, POS, MO/TO and wireless. In addition to payment processing, EPX services include:

- Underwriting: In-house transaction underwriting minimizes merchant reserves and eliminates volume thresholds.

- Risk and Compliance Management:  System provides real-time chargeback ratio reporting and projects compliance issues ahead of time.

- Customer Service:   Every EPX client receives access to a named point-of-contact person who is available 24/7.

- Chargeback Management   End-to-end chargeback management support includes front-end scrubbing that rejects invalid and untimely chargebacks. All chargeback and retrieval data is reported online.

- Real-Time Web Reporting   Client transaction information is reported real time and stored for 36 consecutive months.

You may be thinking that many companies provide such services, as you would be correct. However, EPX is unique in that they offer a single point of contact in managing the entire transaction process. They eliminate the need for businesses to establish multiple relationships with banks, gateways and back-end processing companies.


You may be wondering, “If EPX is a one stop shop, where do ISOs fit in?” Maureen Loftus, vice president of business development and product strategy, tells us, “We do use ISOs; however, since our service is a complete end-to-end solution, we do so in a select way. The place where our partnership with ISOs is successful is with our PDA product-PDA Pay.” PDA Pay turns a Palm VII handheld into a portable, online credit card transaction terminal for wireless point-of-sale transactions. PDA Pay includes a cradle that allows businesses to swipe a credit card, and produces an electronically signed receipt (see issue 00:11:02).

EPX launched PDA Pay in October of last year. However, the product became commercially available only last month. PDA Pay is a Palm VII that snaps into a cradle with a card swipe that enables the device to process card-present transactions remotely, with no wires. Today, EPX is using only the Palm VIIx; however, there are plans to migrate to the iPAC, Compaq’s PDA, which uses the Windows CE platform. “While we don’t allow ISOs to take over an account and completely underwrite an account, we do provide the opportunity to share in the revenue with us.”

Of course, PDA Pay is well-suited to mobile merchants, quick-service restaurants, food delivery, taxis, and door-to-door products. It is also useful in restaurants when a merchant or customer prefers that a card not be taken away from the table. It can also serve as a “queue buster” so that merchants can open up new lanes during peak times without investing in large terminals. A scanner can be added so that inventory items can be tracked.

“There are several advantages of this type of wireless device over propriety terminals that are available in market,” continued Loftus. “People using the PDA can use the functions of the PDA, in addition to benefiting from the card functionality.” A variety of software developers are also working on applications for the PDA, such as work order management. The Palm has a built-in modem, which means that it can track work progress, and, when the service is complete, it can accept card payments. “We do have electronic check, including check verification, and debit functionality under development as well,” said Loftus.

EPX provides ISOs the ability to participate in revenue sharing with the merchant account because, as Loftus points out, “We believe that they had a role in bringing us the account.” EPX provides a buy rate and ISOs share in the revenue above that buy rate. ISOs are also free to set the price of the hardware (which can be sold as a package or individually, since so many people already have a Palm VIIx).

The PDA Pay is available to ship now. “We’ve had a huge amount of interest in it,” says Loftus. EPX currently has orders for approximately 4000 units and Loftus reports that the company has another 5000-1000 accounts that are very seriously interested in the product.

Another recent development at EPX is the launch of is an online bank developed for the convenience of EPX merchants. Its reporting functions mark the final step in the company’s end-to-end ePayment solution, by offering a direct link between merchant and operating accounts. With the launch of, EPX became an online payment processing company that handles every aspect of the transaction.

This all came about because EPX was finding that sometimes merchants would have difficulty reconciling an account, and EPX couldn’t help in some instances because it did not have full control of the account. “A common complaint we heard from merchants, especially from their finance group, was the inability to reconcile their bank account with their payment processing activity on a daily basis,” explained Ray Moyer, CEO of EPX. “Linking their payment processing reporting to their online bank account reporting was the solution we’ve introduced with”

One of EPX’s primary goals is to simplify business payment acceptance by providing a “one-stop shop” for payment services. The company is different from other acquiring banks and processors in that it plays more than one role. “We do have the ability to follow the transaction truly end to end, “ said Loftus. The company already acts as ISO, front-end software provider, underwriter, and provider of back-end settlement and reporting to its client base. With, EPX is now the first company to provide a direct link between real-time online transaction reporting and operating account reporting functions. is a private-label version of, an online bank located in Wilmington, Delaware. The new service acts as an extension of the merchant services portion of EPX’s business, enabling merchants who maintain their operating account at to audit their credit card and ACH deposits, chargebacks, returns and fees online.

Merchants who use the bank log in directly from EPX’s Web site. Merchants can compare their online account statement to their online credit card transaction data, which includes all real-time transaction reporting and complete chargeback documentation and presentment conducted by the merchant.

However, Loftus tells us was not created with the intention to cut ISOs out of the picture. “We do underwrite the merchant account, and we do provide the back-end processing. If ISOs want to take the PDA Pay, sell the terminal and underwrite the account, that is not what we want to do. However, we do provide ISOs an opportunity to make some money on both the terminal as well as the merchant account. We provide them both a one-time, up front opportunity and a residual opportunity.”

“The significant advantage to merchants, and the value ISOs can sell to the merchant, is if something goes wrong, the merchant makes one phone call to EPX,” says Loftus. EPX merchants are each assigned to a specific customer service representative who is available 24/7. Loftus points out that not many EPX merchants need to call. “The likelihood of having to call is low because we control the transaction end-to-end, and there aren’t as many hand-offs between entities.” Loftus continues, “Today’s typical scenario involves a technology provider handing the transaction off to a front-end processor who hands it off to a back-end processor who hands it off to a merchant bank. There is lots of room for mistakes. Our solutions simplify the merchant’s life.”

EPX provides real-time, online reporting. Data is housed on EPX servers and can be downloaded to any format. Merchants can search on a variety of fields, including date, transaction amount, item, etc. EPX also provides automatic transaction reporting systems, which means that merchants can set up reports in any format, in any frequency, to download in any format they want. Therefore, merchants can configure daily, weekly, or monthly reports to download automatically directly into their business applications.

It’s probably already occurred to you that this data can be valuable in the case of a chargeback. EPX provides chargeback management online. “We prevent the merchants from having duplicate chargebacks-we are an advocate for the merchant.” Merchants have full access to the data because it is online. “We can respond much more quickly because we are not dealing with mailing or faxing paper. Anytime the chargeback is submitted, we scan it and provide all forms and directions they need to respond to the chargeback online.” Loftus reports that this cuts down the time needed to deal with a chargeback from 45 minutes to about 5 minutes.

ISOs interested in learning more about revenue opportunities with EPX should send an e-mail to For more information about Electronic Payment Exchange visit For more information about visit their Web site at





 Copyright 2001 The Green Sheet, Inc.