n order to understand the workings of an ecosystem, it's necessary, and much easier, to break it down piece by piece. You have to see how each part functions on its own, what role it plays in the overall system and the ways in which it depends on the rest. Think of the first time you got down on your hands and knees to get eye-level with the backyard lawn. You could see details in each blade of grass you couldn't see while standing; you probably saw incredible insect life bustling about, too. Wasn't it surprising to see so much activity?

Large companies can be like that, too. Looking in from the outside, you might have a difficult time seeing all the components contributing to the whole. It might not be completely necessary to understand the structure; it might just be enough to know there are a lot of pieces working together.

Take Paymentech, LP. This privately-held electronic payment processor and merchant acquirer handles more transactions, including credit, debit and electronic checks, than any other company in North America. According to Paymentech, it processed $162 billion in card volume and seven billion transactions in 2003.

With 1,500 employees in 11 major offices (including its headquarters in Dallas, one in Toronto and a new office in Dublin, Ireland just opened this year) and merchants that accept payments across the United States, Canada, Europe and Asia, it certainly qualifies as a big company. In Paymentech's case, its size certainly works to its advantage.

As with any large entity, it takes a number of smaller parts to make the whole, and those parts never work independently of each other. For merchants, for instance, accepting payments for the goods and services they sell is just one of the financial tasks involved in running their businesses.

According to Dan Charron, Paymentech's Chief Development Officer, the company realized that in order to actualize its mission statement, "To be the most powerful, the most innovative, the most far-reaching electronic payment solutions provider that has ever been," it would have to create its own sort of biosphere on the payments landscape.

This means that Paymentech has worked diligently to develop solutions based on technology it owns and manages, and has actively and successfully established alliances with literally hundreds of providers of solutions for a wide range of business needs.

"We're a pretty good-sized company, so there are a lot of people connected to us," Charron said. "We call it the 'ecosystem' around Paymentech. We've spent a lot of time on this; it's very important."

The company has strategic business alliances that run the gamut from other companies certified to Paymentech, to integrated POS systems, software providers, online providers and billing systems, Charron said.

The idea behind this philosophy is that in order to make money, businesses need to process payments, but at the end of the day, they also need to be able to carry out a number of other functions. Sales, marketing, inventory and accounting are just a few.

"Payment processing is a unique and very important part of the process, but it needs to be integrated with the merchants' other systems," he said. "A lot of companies have come to us because of our size but we've also gone after leaders in different areas and proactively built partnerships with them."

"We've already done the integration and created business partnerships for merchants," Charron said. "We're the best at what we do, which is clearing, settling and authorizing payments, and all the things that surround that. There is a lot more that goes into running their businesses that we are integrated to."

There are two distinct ways to look at Paymentech's approach to business. It has a direct sales business, with an in-house sales force, service division and operations center; this division is managed by Scott Cruickshank, Chief Marketing Officer. Charron said the direct business side handles all of Paymentech's owned and managed portfolios of predominantly medium- to large-sized specialty retail, card-not-present, petroleum and hospitality merchants.

Charron, as CDO, oversees all indirect, third-party business operations, including two sales components and alliance development. One sales group deals primarily with ISOs and third-parties, the other works with small community banks and financial institutions on agent and referral programs.

Underpinning both sales groups are the acquisitions team, investments team, conversions team and the operations and product support team, all of which are under his purview. Charron also oversees Paymentech Canada, the company's foray into that emerging market, and Merchant Link, which provides high-end technical support and data transport services in integrated point of sale (POS).

Charron has been with Paymentech for four years, and said his goal is to build service, products and support operations, and to manage marketing efforts with the end result being a winning situation for the company's strategic partners.

Paymentech's in-house direct sales force currently stands at about 200 people. Charron said, however, that in the indirect group, there are no independent agents.

"We don't have any 1099s," he said. "You don't just sign up with us if you're an independent agent. You're either an employee on our direct side or you're an MLS with one of our partners.

"Part of our commitment to our third-party partners is that we are a service provider and wholesale provider of products, technology and services to them. Our strategy is to identify third-party ISOs and banks and then provide them with all the services and support they need, rather than dealing with independent sales agents directly."

Paymentech does not require its third-party ISO partners to sign exclusivity agreements, according to Charron. "It's product, price and service," he said. "We like to think that if you have the right product at the right price and surround it with the right service, you won't have to worry about exclusivity. You'll get it anyway."

The company accomplishes that goal through the proactive way it seeks out alliances. Paymentech's third-party partners can also be classified in two ways, Charron said. Strategic partners interact with merchants. The company's strategic alliances, of which there are more than 300, are those organizations providing the range of products and services that round out Paymentech's complete menu of business offerings.

As its own ecosystem, Paymentech is uniquely positioned to work with large merchants. In order to provide tailored services to specific industries, there are several different divisions within the company and suites of payments products and business solutions available.

"When you get up into the higher levels of merchants, the 'mid-large' to large merchants, the needs become pretty unique by industry segment," Charron said. "They become a lot more integrated and complex."

The suites of products and solutions developed, owned and managed by Paymentech reflect the company's commitment to being an innovator in technology and applications and cover every payment need.

For example, eCheckSelect lets merchants accept electronic checks; the FlexCache stored-value program allows branding opportunities for smaller merchants; Orbital Gateway and Virtual Terminal is an online payment interface solution. Other products include solutions for online reporting, fraud protection and recurring billing. Charron said Paymentech has developed a front-end dynamic currency conversion solution to offer its third parties.

The company then tailors these solutions to suit certain needs for different market segments. Paymentech offers industry-specific products for lodging, restaurants, retail, petroleum and convenience stores, direct marketing and e-business. Within each segment, Paymentech has developed a product suite geared toward filling requirements that are unique to it.

"This illustrates the depth and breadth of our alliances," Charron said. "By partnering with technology solution providers, we offer generic products coupled with unique features and products for these market segments. We take unique products, then go further into the industries and the providers they integrate with."

Paymentech will celebrate its 20th anniversary in 2005; it was founded in 1985 as MPACT Merchant Services Corp., the payment-processing unit of Dallas-based Mcorp. The company is now owned by J.P. Morgan Chase & Co. and First Data Corp. Through the years it has been honored with several industry awards, most recently with Visa U.S.A.'s "Service Quality Performance Award" for lowest number of duplicate transactions, an area directly affecting consumers.

Within some ecosystems, the largest members like to remain hidden and live quietly. According to Charron, however, Paymentech's executives all feel it's important for them to play active roles in industry associations. He cited participation in Electronic Transactions Association by President and CEO Michael Duffy, Dottie Ford and Kevin Gallagher; Charron serves on ETA's Expo Network Advisory Council.

"We feel that our role is two-fold," he said. "You've got to be out dealing with folks. What you see here is our CEO and the heads of corporate alliances and retail also involved in this way, so it heightens the importance of this arena for our company. It puts a face to the name and personalizes it."

Looking forward, Paymentech will be a prominent force in the Canadian market, just opening to U.S. processors and the ISO system. Charron is overseeing the finalization of conversions and systems integration there; when those are completed, the company will open the market to selected strategic partners, he said. "Canada is a very attractive marketplace for ISOs."