About Company
Merchant Accounts USA (“MA”, “We” or the “Company”) headquartered in Hong Kong and Merchant Accounts, USA headquartered in Beverly Hills, California, is an end to end electronic payment processing provider to small and medium size businesses in the European Union, United States and the Asian Market.
Overview
“MA” processes electronic payments including Visa, MasterCard, American Express, Discover and other bankcards for businesses throughout the International Market. Checks, gift, loyalty and other stored value cards, ACH payments, and other products are processed through this same platform and compliment the company’s core product line. The industry continues to maintain strong fundamentals with a market opportunity of $32 billion in revenues and projected to expand by 11.35% annually to $45.5 billion by 2012. In 2009, only 52% of point of sales transactions equating to $1.5 trillion and over 55 billion transactions were conducted by credit or debit card, therefore, the ability to further increase electronic payment market share will fuel the growth of this market opportunity. The industry’s fixed cost model provides a barrier of entry for new entrants. Over the last ten years, Company has invested in technology and its infrastructure to create a payments platform that can process multiple forms of payment through a proprietary system.
We has developed a proprietary payment processing platform that can process multiple payment forms. This product offering is valuable to its market segments and has played a key role in driving the growth of the company. In addition, the payment platform has the ability for transactions to be processed using a variety of communication methods including dial-up, Internet Protocol (IP), wireless, cellular, contactless, potentially biometric and mobile payments. This flexibility allows a transaction to be conducted in the retail setting, through the Internet, and or mobile. The company’s forward thinking in providing a solution that is equipped to handle today’s communications and also provides solutions for tomorrow’s technology today is a differentiating factor in the market place. The versatility has only become available in recent years, with some technologies just coming of age.
The explosion of the ecommerce market segment and the development of emerging markets have introduced new technology solutions that MA has already incorporated into its payments platform. Early on MA began to see the shift in card processing and other forms of electronic payments from the retail setting to other environments and knew of its importance to provide solutions early on. MA’s early adoption of these technologies have attributed to its success. The ability to provide a versatile platform coupled with other technology initiatives provides tremendous opportunity to increase market share and expand the current market.
The company’s information technology (IT) staff has embarked on a variety of other initiatives to develop and refine a number of payment products and infrastructure to provide a strong and scalable foundation to further grow the business. The objective is to provide an integrated payments solution for customers and the resources and infrastructure for MA’s sales channels. These products and tools are differentiating factors which enhance the company’s sales efforts in recruiting new sales and expanding into new channels and markets.
One of the strengths of the company is the merchants signs a three year exclusive merchant agreement and over 90% of the time renews its agreements several more times. The average life of the merchant currently exceeds six years and the company has developed several new initiatives to increase the merchant’s life. Revenue is generated on each transaction that the merchant processes and the revenue growth correlates with merchant growth. This recurring and predictable revenue model bodes well for the company as it provides visibility on profits, capital needs and the value of economies of scale.
Infrastructure and Services
Company has built a culture and instilled a philosophy that they believe continues to improve the quality of products and services offered to their merchants and sales force. This culture spans through the company’s entire organization as they strive to provide the best support and product offering to their merchants, sales channels and internal support staff. Attracting and retaining the best people possible and having them provide the best service is critical to continued success.
The company continues to reinvest in its infrastructure by developing and continuing to enhance the operational tools and internal systems to assure a solid foundation that is scalable to support today’s activities and tomorrow’s growth. The objective is to provide an end-to-end payments solution to merchants and a versatile processing platform that is robust and secure for all to utilize.
The company’s IT initiatives and centric operation permeates throughout the entire company because of their belief that the combination of advance IT products and tools and properly trained staff eagerly and willing to assist merchants and sales channels enables them to provide the industry’s best product suite and support.
Within the PW internal staff, the company has strived to automate as much of the operating functions as possible. The IT staff has developed many tools coupled with a proprietary internal operating system, Centurion, to minimize repetitive work and provide information readily. The design of Centurion and constant enhancements has been feasible by the input of senior management and employees across multiple disciplines. The system integrates the boarding of the merchant account with underwriting, ongoing risk management, customer and technical support, accounting, and sales. Furthermore, it provides management tools and automated reports to maximize the value of the data that is collected. The creation of this software required significant input and development time but it is the entire backbone of supporting the company’s processing platform.
Underwriting
MA has developed underwriting policies that are liberal in nature but take risk management and the company’s risk department’s capabilities to manage these accounts into consideration. Each submitted application is categorized based on several variables which define the underwriting requirements and supporting documents that are necessary to approve the account. MA’s underwriting staff conducts thorough due diligence on each merchant account including the review of credit bureau information, reference checks, historical processing information, site visits, and company financials if necessary. The company has streamlined the process including the development of automated algorithms to increase the workflow and improve the efficiencies. All pending information is automatically routed to the appropriate party. MA’s objective is to have most merchant accounts approved within a few hours and processing bankcards within 24 hours. Providing thorough and quick underwriting service is critical and the expedited process is what PW strives to achieve.
Merchant Setup and Training
After an account is approved, an automatic notification is sent to the sales representative and internal staff to assure that the merchant is processing as soon as possible. Information is routed to client services so that each appropriate department can complete their designated task. Technical support will either prepare equipment to ship to the merchant or reprogram the merchant’s existing equipment so that the merchant is ready to process. The appropriate software is downloaded into the merchant’s point of sale device so that the designated bankcards including Visa, MasterCard, Discover, and American Express can be processed. The configuration will also accommodate other subscribed products including check services and stored value programs. After the download and terminal programming is complete, the equipment is shipped so that the merchant just needs to turn on the machine to begin accepting bankcards. Subsequently, a client service representative will follow up and train the merchant on the device and illustrate how to enroll and access the Online Resource Center.
Merchant Retention
Retention is critical to the success of the business. MA takes a very proactive stance in assuring that merchants are properly processing transactions and satisfied with MA’s service. This philosophy begins as soon as the merchant has completed their training. Each merchant is followed up within the first week of processing to validate that not only is the merchant processing (even though MA has that information), but also if there are any outstanding questions. Company provides full disclosure of all pricing information and commitments and obligations because the company builds long-term relationships with its merchants. On an ongoing basis, merchants are updated on new products, new bankcard regulations, processing tips, and fraud updates to keep the merchant informed. These added value practices further enhance merchant retention.
Internally, Company has developed a variety of automated reports to monitor the merchant’s processing volume, card types, method of processing, and other criteria. Any adjustments out of the ordinary course of business, flags our internal systems and updates our daily reports. This enables our client service department to actively review these merchant accounts and communicate with both the merchant and the appropriate sales representative of changes in the merchant’s trends.
Recently, Company has implemented several new systems, management reports, and provide incentives to the retention team to further improve retention.
Risk
Monitoring risk is a very important component of the business. In the company’s current contract, MA holds 100% liability of all losses and will continue to posses the risk to assure best pricing. MA’s portfolio of merchants predominantly consists of very low risk retail merchants and our risk staff and management tools allow the company to maintain limited losses.
Year to date, the company has experienced less than 1 basis points of losses which can be attributed to an exceptional staff and the proprietary tools that have been developed to manage the merchant portfolio.
The MA risk department takes a proactive stance when handling retrieval and chargeback requests. As soon as they are aware of cardholder disputes with the merchant, they contact the merchant in at least two methods to address the matter immediately. Retrievals and chargebacks are a time sensitive manner as the banks provide a finite time period to dispute the claim. Therefore, the proactive philosophy and belief that the merchant relationship is a partnership enables the PW staff to work effectively and provide exceptional support in this area.
Client Services
Company prides itself in its client service department which includes both customer and technical support. The company provides ongoing service and support for merchants and their sales channels. Services include answering billing questions, fulfilling order supplies, merchant retention, resolving failed transactions, troubleshooting, reprogramming or downloading new software into the point of sale system, and resolving technical issues related to MA’s and third party products.
The company’s internal system, Centurion, was developed for the merchant service industry. The proprietary system enables the support staff to utilize one system to solve almost all merchant needs. MA’s entire client service staff is located under one roof in a state of the art facility built for the merchant services industry. Last, the phone system has been integrated into the system to assure scalability and seamless integration with the internal platform.
The MA staff continues to strive to achieve excellence. The staff receives ongoing training and product enhancements to improve the quality and speed of service. The managers continuously monitor the staff and provide ongoing consultations and reviews to assure that the client service team is the best. MA prides itself on the service that they provide to their merchants and sales channels and believe that this is one of the differentiating factors that has enabled them to succeed.
New Technology
MA is working on Mobile Payment Technologies and other payment technologies that will provide a new way the merchants and clients accept and pay for services. MA has invested a substantial time and money to the development and is looking for a partner to bring the new development to the merchant market.
Bank –Merchant Acquiring Sponsorship
Bank (“BANK”) will facilitate the Merchant Acquiring Program.
BANK shall provide the services specified within Merchant Acquiring business and as set forth in Bank’s guidelines.
BANK will allow PW sponsorship into members network (Visa/MasterCard/Amex/Others) for credit card processing, debit card processing (if available), and other services related to Acquiring Program.