Reducing the pain of processing fees

What happens when a group of friendly entrepreneurs and technologists assemble to solve a new problem? If serial entrepreneur Robert Maynard gets involved, it could easily result in a new venture.

This was the case with SurchX, a Phoenix-based startup founded by Maynard in 2017. The company was created to build and market technology that enables merchants to easily calculate and recover credit card processing fees by passing a percentage of them to the consumer.

"Surcharging is a viable defense for merchants looking to reduce their credit card processing fees or improve their net margins," Maynard said. "It's legal in all but six states, has no upfront costs for the merchant, and doesn't sacrifice consumer choice or convenience."

A worthy disruptor

Maynard and his expert team had already created two public companies worth over $6 billion by the time he established SurchX. The technologies developed to support those ventures were varied, including an in-network Internet filtering system, a large identity theft prevention platform and one of the largest Internet Service Providers in the United States, he noted.

According to a SurchX representative, when the surcharge idea sparked in his mind during a meeting, Maynard "immediately saw the possibilities for a huge business that would disrupt an existing industry, create some social good in the ecommerce realm, and help both merchants and consumers."

Maynard made sure he was on solid legal ground technology-wise and then tasked his development team with building the SurchX platform. The company spent the first two and a half years ensuring the technology was up to code and launched the product publicly in early 2019.

"2019 is the year we established ourselves in the marketplace," Maynard said. "The technology works, the distribution channels are in place and we are beginning to see revenue." Maynard also predicted the company will "end the year at about $1,000,000 in revenue."

Plug and play

The SurchX proprietary technology platform integrates with a merchant's ecommerce platform via application programming interface (API) code. According to the firm's marketing materials, the merchant just needs to, "download a plug-in and flip a switch to turn SurchX on and start surcharging."

SurchX APIs already exist for many of the standard ecommerce shopping cart applications; a merchant can also request a custom API be built. The company reported it offers "virtually any online merchant with a seamlessly integrated, safe, secure, and fully compliant turnkey credit card surcharge solution."

The company also stated, "In most cases, the SurchX plug-in requires zero upfront cost and zero risk to the merchant [and when the integration is live] the SurchX technology identifies card type and associated fees and adds it to the customer's invoice in a matter of seconds."

Additionally, Maynard indicated SurchX was built as a platform-agnostic solution for ecommerce surcharging. He also noted that the launch strategy included studying the market and strategically partnering "with all the biggest players who have decided to use SurchX rather than build their own solutions, which would take two years and be very expensive." First Data, TSYS, Authorize.net, Stripe and Magento are among SurchX's partners, a company representative noted.

Grow and scale

SurchX has had to defend against erroneous perceptions in the market regarding surcharge legalities as well as speculation regarding whether surcharging could negatively impact a merchant's sales. The company has addressed these and other claims using data from real-world case studies that indicate consumers "want to use credit cards – especially rewards cards – to buy things online, and SurchX preserves that opportunity."

As a result, Maynard's view of the future is tremendously optimistic. "2020 will be a year of growth, and I project $15 million in revenue," he said. "2021 will be a year of scale, and we project about $100,000,000 in revenue."

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