Stability for growing ISOs
When National Processing Co. became a subsidiary of Vantiv Inc., formerly Fifth Third Processing Solutions LLC, NPC brought over 40 years' experience to the venture and a nationwide distribution network representing approximately 200,000 small and midsize merchants (SMBs). Following the 2010 acquisition, the combined portfolios of the two acquirers topped 420,000 merchants with a total annual payment volume of $344 billion.
"Not only did Vantiv acquire an expanded merchant portfolio, but it also acquired a long-tenured distribution channel through the relationships with ISOs all over the United States, some going back 20 years," stated James Oberman, NPC Managing Director. "We're really good at boarding a deal, underwriting it, getting the merchant set up, doing it quickly. You could board a deal in the morning and have a merchant set up in the afternoon."
According to Oberman, the average NPC merchant processes from $180,000 to $200,000 per year. But when you factor in the financial strength of Vantiv, which became a publicly traded company in March 2012, along with its extensive background in dealing with large-volume merchants, the bandwidth for NPC has expanded to include a number of businesses in emerging growth sectors.
"Whether an ISO wants to focus on building a sales organization or focus on some of the vertical markets that are growing, like business-to-business or health care or bill pay or government, wherever an ISO wants to evolve we can put them in a very great position of being able to respond to the needs of their customers and their merchants," Oberman said.
To eliminate the guesswork and expense of trying to predict who will ultimately dominate in mobile and other emerging payment technologies, NPC has taken a long-term stance with its ISO partners.
Oberman said the ideal ISO candidate is someone looking for a home that doesn't require the ISO to make considerable investments in infrastructure to move forward, whether managing risk, boarding a deal, deploying equipment or delivering brand-new products.
"What we do for the ISO, being part of the Vantiv family, is we're able to respond collectively to what's going to happen in the marketplace," Oberman said. "Nobody has a perfect crystal ball, but we're in an excellent position to respond."
Andrew Ciafardini, Director of Public Relations for Vantiv, agreed. "Wherever the future nets out, Vantiv and NPC have partnered with a number of different technology providers to make sure that we're ready to support whichever technologies win out," he said. "And because we have a single integrated platform, we have the ability to board those technologies very quickly and deploy them quickly for our customers."
As the nation's third largest merchant acquirer and the largest PIN debit acquirer based on number of U.S. transactions, Vantiv said its suite of payment solutions embraces present and emerging form factors, point-to-point encryption, bill pay and collection solutions, Payment Card Industry Data Security Standard compliance, information solutions, and mobile and prepaid programs for reaching a variety of vertical markets.
The power of integration
Beyond relying on NPC for boarding merchant accounts, processing transactions and managing portfolios, ISOs can turn to NPC's integrated payment platform as a liquidity source, whether seeking a loan, cash advance or a portfolio sale. In addition to keeping an eye on the future, NPC also focuses on how to improve existing products to increase their functionality, Ciafardini noted.
One such example was the rollout of the redesigned NPC.net website in January 2013. Through the website's NPC Passport client portal, ISO partners have access to nine separate NPC websites to manage merchant portfolios, obtain custom reports, submit merchant applications, initiate payment processing and perform numerous other functions.
Within the NPC Passport portal are two recently launched micro-sites. NPC Sales Academy offers an e-learning program with an overview of boarding and paperwork procedures, positioning strategies and industry best practices.
"What we make available to our ISOs is a training academy that they can use to train their sales reps, so that they have a consistent, standard way of delivering the message to reps that are working for them," Oberman said.
The other micro-site, NPC CustomPoint, delivers on-demand fulfillment of printed collateral materials. On this site, agents can order customized materials and orchestrate a direct marketing campaign through a single interface.
Also appearing on the revised website are current postings of payments-related white papers, case studies, webinars, videos and blogs to help educate ISOs and their merchants.
Other notable features in the platform are its boarding and customer service reporting tools. When a merchant application is processed, real-time feedback reveals whether the application has been approved or more information is required. ISO partners can also monitor the services rendered to merchants in their portfolios.
A complete record of calls and actions taken on behalf of merchants is maintained online, NPC reported.
For merchants who accept American Express Co. card payments, NPC offers American Express One Point. Under this program, merchants can consolidate acceptance, settlement and funding, as well as dispute management for all major card brands.
"That puts the merchants in a position where they have a single point of settlement for all cards," Oberman added. "A lot of other ISO service providers out there in the market today don't have the capability to deliver that for ISOs."
ISO focused teams
Another area in which NPC has made a concerted effort to differentiate itself is with its designated teams. The NPC GEM (Going the Extra Mile) team has for the past decade offered direct, daily support to ISO partners and merchant level salespeople.
"They're dedicated to supporting our agents so that when they call in, a human being answers the phone," Oberman said. "They're not going to voicemail."
NPC also provides long-term strategic planning services through an experienced team of relationship managers. For example, Oberman said an ISO calling in might say, "Hey, I want to implement using your sales academy. I've got 15 sales reps. How do I do that?" The relationship manager would then coordinate and fulfill the ISO's request.
Additionally, NPC has set up a merchant retention team ISOs can use to save at-risk merchants. "If the merchant calls in and wants a copy of the last three months' statements, we have a flight risk," Oberman said.
"We have a risk of flight alert that we push to our ISO partners, so if they want to set up a retention effort they can." At that point, NPC would execute a retention effort, or for ISOs preferring to manage these efforts in-house, NPC can train them.
NPC offers two revenue share models. In one, the ISO can focus entirely on sales and business development, while NPC manages back-end functions such as boarding, underwriting, risk management and staffing a merchant call center.
With the increased complexity of today's integrated POS systems, many ISOs are turning to NPC for deployment functions as well, the company noted. "Building a download today for a terminal becomes pretty complicated, and a lot of ISOs traditionally wanted to do that themselves," Oberman said. "They had to invest in software and servers, and have security."
The other ISO program is a menu-based model. "We do give some ISOs who want to do more of the heavy lifting the ability to explore a menu-based price, if they want to take over some of the roles and responsibility," Oberman explained.
Regardless of which program an ISO deems appropriate, NPC has a long history of supporting the ISO community and takes pride in the fact that some of its partner relationships span several decades.
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