Filling the payment void

When Dan Geraty, Chief Executive Officer of payment processor Clearent LLC, founded the company in 2005, he wanted to provide products and services he felt were missing in the payments industry. It was clear to him that ISOs, financial institutions and merchants could benefit from a partner that had the capability to provide solutions tailored to their processing requirements.

"As everyone knows, data is getting more valuable every day, and legacy systems just don't do a good job of providing the information ISOs need to run their businesses," Geraty said. "In addition, some of the legacy processing systems are notoriously difficult to work with. We wanted to focus on more user-friendly interfaces that reduced training time and presented data in easy-to-interpret dashboard settings."

Geraty felt there was no payment processing system designed specifically for the ISO market. To remedy what he believed to be a void in the industry, Clearent built a back-end payment processing platform from scratch that focused on the needs of Clearent's ISO and merchant level salesperson (MLS) partners. And in 2008, the company's back-end system was certified by Visa Inc. and MasterCard Worldwide.

Better control

Clearent's proprietary platform is designed to facilitate more efficient merchant settlement and easy-to-understand reporting. The company's ISOs and merchants have better control over settlement funding and Payment Card Industry (PCI) Data Security Standard (DSS) compliance issues because Clearent built its platform around the PCI DSS.

Many companies that develop platforms ultimately need to be retrofitted to "get up to speed with PCI," he said.

"This wasn't an easy process, but it truly validated the importance and capabilities of Clearent's technology," Geraty noted. "And we're proud because the number of companies that have received this type of certification in the past 20 years can be counted in the single digits. Our payment engine does the qualification, the billing and the settlement directly now with Visa and MasterCard.

"What is most important about this to the ISO and MLS community is that it enables greatly improved - specifically faster and more accurate - residual reporting and payments, as well as business management tools to make sure merchants are priced correctly and are providing a profitable situation to the ISO and MLS. Additionally, it increases the transparency and clarity of all data that our ISOs and MLSs receive."

Compass direction

Geraty considers Clearent a "generalist" in that it offers value-added services to its ISOs. The company provides in-depth, useful information through an online merchant management tool called Compass.

Compass is presented in a "dashboard" format that helps ISOs and MLSs quickly identify both at-risk and low-profit merchants, giving service providers the ability to find which merchants are gaining transaction volume or have potentially stopped processing altogether. For Clearent, developing and implementing the Compass management tool is all about access to data and being able to easily interpret that information. Compass is unique in that it provides what the company calls "snapshots" of merchants that are immediately useable, Geraty said. For Clearent, it is the difference between reading the box score of a baseball game and being actively involved in managing the game, he said.

"One way we keep merchants sticky is through our Compass online merchant reporting and the merchant statements we generate that are much clearer than the average statement," said Jeff Fortney, Clearent's Vice President, ISO Sales Channel. "What we've done is design and create a residual report that doesn't come via an Excel spreadsheet in an e-mail, but it's online and easily accessible.

"They can view the dashboard reports in real-time on their merchant revenues and from any time frame. With Compass there is complete transparency. And our ISOs love it because they're not taking time away from sales to analyze residual reporting; they can simply access their merchant account wherever they can log onto the Internet. It makes it easy to see where they are making money and where they might have to re-price a merchant."

Unique partnerships

The company also offers a comprehensive suite of payment solutions including credit and debit cards, gift and prepaid cards, check processing, e-commerce, electronic benefits transfer, and POS equipment sales and leasing.

Clearent considers itself unique in that it is not a vendor to its ISOs but a true partner that works with each ISO's specialty, Geraty said. The company's channel partners have diverse customer bases and portfolio accounts that include government agencies, brick-and-mortar and e-commerce retailers, restaurants, educational entities, petroleum companies, convenience stores, hospitality and lodging businesses, and MO/TO merchants.

"We primarily respond to requests for specialization in a vertical that would come to us through one of our partners," Geraty said. "So when a partner brings us an opportunity to go into a vertical together, then we'll take a look at what it might take to help them succeed from a systems, training and education standpoint. Sometimes we'll even hire additional people that have a real knowledge base about that vertical in order to support our partners' efforts.

"We feel that we present back the kind of information that our partners can use to run their businesses more efficiently and really analyze their profitability on a merchant-by-merchant or transaction-by-transaction basis. So the merchant management tool and the statements we provide are branded by us, which provides a great value-added sales opportunity for our ISOs."

Priority - education

Geraty said Clearent has also rolled out a new PCI DSS compliance program for its merchants, and the key to its success is education. The company doesn't believe in charging merchants fees to offset compliance risks, as many other processors are wont to do, according to Geraty. "Adding fees that promise to eliminate PCI risk isn't addressing the real issue of educating merchants and safeguarding consumer confidence in the card payment system," he said.

To that end, Clearent is introducing a compliance program that merchants can participate in at no cost to them, Geraty added. "Regardless of the merchant's size, it's most important to us that we do whatever it takes to protect their business without picking their pockets," he said. "Our Web-based program is all about teaching merchants on the different elements of compliance, the risks they face and what they need to do to get compliant if they currently are not."

In addition to Clearent's reporting management service, the company offers a Merchant's Home Page that answers merchants' questions. Geraty said that when Clearent implemented the Home Page, queries from merchants about billing dropped 33 percent.

Going home

"We provide as much information to our ISOs as possible, which allows them to deal with issues independent of us but also enables them to answer those questions for their merchants," Geraty said. "Our processes are simply designed to be easy to use and fast, with no hassle. Everything we have built in-house has been with our ISO community in mind.

"More than half of our organization is staffed with IT [information tech-nology] experts to deal specifically with any potential problems or issues. We work very hard to identify our clients specific and often unique needs. And by doing this, we can better understand what they need to reach the level of success they are striving for."

As a result, Clearent has developed long-term relationships that are based on unconditional support, Geraty said. "What we strive for is to avoid having our clients getting involved with another vendor relationship; we provide them with everything they need," he said.

Common aspirations

Building relationships with its ISOs partners is the foundation of Clearent's sales and marketing philosophies, and the company looks for people who are fully committed to their businesses as well as to the payments industry, Geraty said. "We'll support people working in any vertical, but they really have to have a good business plan and a solid knowledge base of what it takes to be successful," he said. "They have to have aspirations for growth that match our own."

Geraty feels that what makes Clearent stand out among other processors is its staff, procedures and technology. The company coaches its staff to become trusted advisors who focus on service to help ISOs stay successful and maintain steady revenue growth.

"We've assembled a board of directors that is really focused on success, that knows the industry cold," Geraty said. "And I think the key here is that we have to listen to what needs are not being met by whoever the ISO or MLS is currently working with and then find out if we can solve their problems. It really comes down to efficiency and quick turnaround times, so from a processing standpoint we strive to make it as easy as possible for our partners to work with us."

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