f you're looking for more than just the usual offerings of a merchant service provider and need products with Hispanic flavor, check out Blackstone's menu. It certainly tickles the prepaid card palate of O.B. Rawls, President of Hypercom North America.

"We have been working with Blackstone for three years, and we are very happy with the partnership," Rawls says. "They have brought a unique solution to the prepaid card market."

Blackstone General Manager Mike Acton, who joined the company during its transition from normal hard card distribution to electronic distribution, says its roots can be traced to Miami in the mid-'90s, when the prepaid card industry was just beginning to emerge. Blackstone founder Lewis Arias owned multiple gas stations and convenience stores and was sending cards out to his stores through distributors. He decided to expand to direct relationships with carriers.

"What moved us to go into electronic distribution was the advantage of prepaid wireless products," Acton says. "We saw there was going to be a need to offer different inventory rather than the physical prepaid cards hanging on shelves. We knew merchants needed to carry all types of cards, and that involved a lot of float. Giving them virtual inventory was the answer."

That vision led to the formation of a company that today boasts an impressive array of products and services. Blackstone provides 75 different prepaid calling cards found in more than 300,000 retail establishments plus processing services for all major credit card, ATM/debit processing, EBT, check services, gift cards, even an all-in-one POS terminal. There's also Blackstone's Global TRACS, a transactional accounting system for internationally based organizations.

"Our core is to be able to take relationships we have with all carriers and bring out a good margin product to our merchants," says Acton. "Typically, we go out to where traditional prepaid products are purchased, such as gas stations, convenience stores, pharmacies and check-cashing outlets. What sets us apart, first and foremost, is that we own and operate our own network. We write our own software. Nothing is outsourced, so it allows us to internally develop and enhance products and services."

Another Blackstone differentiator is its claim that it is the only prepaid provider that offers both a Visa and MasterCard acquiring source. "With our competitors, merchants need two terminals," says Acton. "Our terminal does both prepaid and processing. It offers multiple forms of distribution of product, including a smart printer, smart card capability, debit, credit card capability, signature capture and check conversion."

Blackstone's terminal came out in 2000 as a strategic alliance with Hypercom. Supported by Hypercom's ICE 5500 platform, the Blackstone POS terminal offers merchants an opportunity to convert their POS system to a profit center through prepaid and long distance cellular card revenues. According to Acton, Blackstone's costs are very competitive, whether lease or purchase, with next-day deployment through Horizon.

While Blackstone's biggest selling products remain prepaid wireless offerings, its hot new item is a prepaid debit card that functions like an ATM card.

"A customer purchases a debit card with a PIN attached to it," says Acton. "Depending on the program, the consumer can fill out a small form giving all necessary ID info and get a prepaid MasterCard issued to them up to $750. They then swipe it at a merchant terminal. It's great for folks who don't have checking accounts, and the merchant gets a percentage on each transaction used with this card."

What does all this mean to ISOs? Blackstone is hoping it translates to expansion of its outside sales channel.

"Our first move is to get certification along processing platforms," Acton says. "We are already certified with Universal Savings Bank, our sponsor bank. By getting additional certification, it will allow us to go out to ISOs and say, 'Here is a viable solution, and whoever you sell processing through, you can continue to do so.' "

Acton sees numerous benefits for ISOs who team up with Blackstone. "Number one, they are able to take their attrition level down to next to nothing," Acton says. "We looked at the industry and saw these levels were very high. We want to make it difficult for ISO merchants to leave their ISOs. Number two, we are a new revenue source whether they're selling or leasing terminals. Now they can offer services on the prepaid side. That's a different concept."

Then there's the Hispanic flavor. With its roots in Miami, Blackstone is strongly entrenched in the Hispanic merchant community. "This is a great market to be involved in," says Acton. "They are loyal in regards to product. If a product is proposed or sold by Hispanic to Hispanic, they will gravitate toward it. For Blackstone, it has been a real good market. We have thrived."

One ISO that has partnered with Blackstone is West Hills, Calif.-based Merchant Direct Processing.

"We may be considered a processor, but we are really a master ISO," says Al Urcuyo, President and CEO of MDP. "We take responsibility for all our accounts. We provide merchants services to Blackstone, and they provide our merchants with prepaid terminal solutions. We have worked with Blackstone for a couple of years now, and it is going very well. Our merchants enjoy sharing in multiple revenue sources.

"The great thing about America is that it's filled with competition. You must be creative to help merchants become more than just a commodity-driven merchant. The prepaid industry has become very competitive. It was outside our business, but it is Blackstone's business. Our merchants knew about it but never got into it. For us, we are going into a totally untapped market. Blackstone is helping us tap it."

Urcuyo continues, "I don't worry about my ISOs and reps servicing this market. Blackstone does it all. They are an innovative company and are very technologically savvy. They are a couple of years ahead of the competition. That's who you want to work with."

Acton makes it clear that Blackstone wants to work with ISOs who think that way. "We look at folks who have enough forward-thinking ability to see this is not going out and selling a box and making some money," he says.

While its ISO partnerships are slowly but surely forging, Blackstone's corporate alliances are solid. In addition to Hypercom, Verizon, T-Mobile/VoiceStream and Universal Savings Bank, Blackstone has established relationships with AT&T Wireless, BellSouth, Cingular, Cisco Systems, Fifth Third Bancorp, IDT and Americatel.

The Hypercom alliance has been so positive, Blackstone is working with Hypercom on product distribution outside of North America with particular emphasis on Asia, Australia and the U.K.

"From the merchant's standpoint, this system helps control shrinkage and waste at the point-of-sale," Rawls says. "With prepaid phone cards sitting on the shelf, stolen or shrunk, that's cash out the window. Blackstone's solution allows for card activation at the time of printing. It's a terrific solution for the marketplace. It works."

What also has worked is the Blackstone information/technology team.

"Our biggest accomplishment to date is the team we put together for our IT network," says Acton. "We have a wonderful group of young, bright, creative folks who would choke if they heard me say this. The hardest thing is to get young folks to make the grade. With our team, you can sit down and brainstorm with them for new products and services, and they make it work. It gives us in management the opportunity to take advantage of new trends or ideas and really move the market."

Blackstone is focused on getting past a bigger obstacle - the merchants.

"Our biggest challenge is educating the merchants on using our terminals," says Acton. "They are used to pulling a prepaid card off the shelf. As time goes on and we do our job of making it easy and user friendly, wireless prepaid cards will pick up speed."

Acton bases his optimistic view on where he sees the market heading.

"The prepaid industry is on a major upward curve because of wireless products. I think what will eventually happen will be more products being sold for the terminal with a PIN from a catalog or a POS poster. Customers will see what they want, select it on the terminal and pay for it - all at the point-of-sale. That ability can and will be exploited. The merchant will have the opportunity for more inventory to sell, and we are going to utilize our network to supply a lot of those products and services."