No merchant service left behind
When The Small Business Authority, powered by Newtek Business Services Inc., addresses merchant services, it covers far more than payment processing. The SBA has taken an array of products and services, many of them normally delivered by multiple niche providers, and consolidated them under the umbrella of a single merchant services operator that uses its expertise in multiple niches to add value and boost convenience for clients, according to the company's President and Chief Executive Officer, Barry Sloane.
As a payment provider, The SBA can function as the entire chain between merchant provider and payment processor, providing a terminal, customized web store, gateway, web hosting platform and processing services within a single unified package, Sloane said. These services are sold both to e-commerce merchants and mobile merchants. A similar package is available to brick-and-mortar stores.
"In the payments space, what is unique is we now have our own gateway, and we are the processor and the host, and we design [the merchant's] own site," Sloane said. "So it's very unique for the end user - to actually provide all the front-end and back-end services and the dedicated customer service that comes with all those parts.
"We have over 100,000 business accounts across many product lines; we provide services to all 50 states; and we make businesses better and more efficient in the areas of finance, payment processing, technology, risk avoidance and cost reduction."
Value-added services
The company - which began as a small business venture capital firm in 1998 and branched out into merchant services in 2003 - offers a variety of general business products that can be incorporated as value-added services offered by ISOs and merchant level salespeople (MLSs). Services include merchant loans, merchant cash advance, special technology pieces, search engine optimization (SEO), and electronic payroll and billing. According to Sloane, the company offers hundreds of business products in total.
For ISOs and MLSs, the range of The SBA's offerings and the flexibility of its package confer distinct advantages, Sloane said. For one, ISOs have an unmatched assortment of value-added products to choose from in luring new clients or upselling existing ones.
For ISOs and MLSs, the company is "rolling out products and giving a technology solution in the form of a website and a fully transparent referral system that allows them to see what we're doing in our back office," Sloane said. "That can be used for [overseeing] web design, insurance, payroll - any number of things."
For example, ISOs and MLSs can provide electronic payroll services to current merchant customers, or they may bundle that product with processing services for prospective clients. Sloane said the company frequently offers promotions that encourage the purchase of multiple products used in interrelated ways, such as payroll combined with core merchant services products.
The SBA's loan program is another example of an unusual add-on product. The SBA is the country's largest nonbank guaranteed lender, according to Sloane, who noted the company recently exceeded $500 million in loans. He said the company also offers merchant cash advance, but he called loans a better alternative for merchants who qualify.
Sloane said one benefit a loan from The SBA provides is that merchants pay back loans on agreed upon timetables, rather than surrendering a portion of their credit card receivables, as they do with cash advances. Also, the interest rates (6 percent), payback periods (seven to 25 years) and loan amounts ($50,000 to $5 million) are more attractive than what is typically offered with cash advance, according to Sloane.
And compared to bank loans, The SBA's loans contain lower interest rates and longer payback periods. "It's night and day on the payback period and interest costs," Sloane said.
Attractions for ISOs and MLSs
With all merchant services products, ISOs partnered with The SBA dictate the degree of their involvement with merchants, Sloane said. Some ISOs may wish to continue working closely with boarded merchants; others may prefer acting as referral partners, transferring the work of customer service to the technology seller. "They're as involved in the process as they want to be," Sloane said. "Apart from lending, they'll continue to get [residual payments]. ... Typically, distribution partners using us may want to earn commissions and service a small business loan, but they don't want to package the loan, aren't licensed insurance agents, or don't know how to design and assemble a website, so they rely on us to do those things."
With The SBA's electronic tracking program, resellers can view any developments with existing and potential clients, such as sales opportunities, revenue generation and reports of issues or questions. Sloane said the tracking program is conducted in real-time, allowing service providers to immediately view any updates.
"With a typical referral program, usually the distribution partner, partner A, provides a need to partner B, and then 100 days later, the partner gets a spreadsheet that tells them what happened," Sloane said. "With our patent-pending system, the distribution partner can look at, 24 hours a day, the status of any business opportunity we're working on with a customer.
"We provide the products, but we'll set up an online interface, so the distribution partner is never left out of the equation. They can communicate with people through our office or online system. They have the flexibility if they want to be on every single phone conversation after a referral goes into the system."
Sloane added that a similar electronic data tracking system is available to merchants and that, later in 2012, the company will be rolling out applications that allow merchants to view that data from smart phones and tablets.
Integrated services and support
"Because Newtek Business Services is one entity, all of the divisions are going to be sharing data, and we're going to be able to give a customer one report for all their services and that report will also be available on a tablet," Sloane said.
The SBA's other business services include cloud computing for electronic transactions, whereby customer payment flows to a remote environment that Sloane called a "military strength" security fortress; SEO and other marketing services; dedicated mobile terminal products; risk insurance against data breach; and 24-hour, bilingual phone assistance to merchant customers.
"We recognize that merchants today come in all sizes and shapes, and have many needs in addition to the payment aspect of business," Sloane said. "If a business, for example, needs a mobile application we'll provide that for them - we'll give away a free credit swipe reader for an iPhone, BlackBerry or Android if it helps a merchant on the web with their e-commerce presence.
"Or we'll provide the needed services if a merchant's website isn't highly trafficked and needs a new design, or organic search and SEO techniques aimed at maximum capacity."
The company also offers an alternative to PayPal Inc. called NewtPay, through which repeat customers are given substitute credentials to obviate the re-entry of credit card data. Sloane said NewtPay is both cheaper than PayPal and quicker to deposit funds in merchant accounts; he said money is deposited within two days, at the most.
"The SBA has put a lot of resources to understanding the credit union market, and I'm always very comfortable giving them a credit union referral," said Rick Govek, Alliance Manager for CUNA Strategic Services, a vendor of merchant products to credit unions.
"When a credit union has been unhappy - and there haven't been many of those situations over the years - they've been really quick to respond. 'Integrity' is a good descriptor for their company."
According to Sloane, the SBA provides both generalized technical support and dedicated service managers to help merchants with specific niche products outside of the company's core processing services. "If you're a merchant and you're having issues with your site, do you go to your web designer, gateway provider, payment processor or the host of the site?" Sloane said. "With us, you always come to us. It's just a much simpler arrangement."
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