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CompanyProfile
Go the extra mile to deliver the most value
S olomon "Sol" Lax, Chief Executive Officer of
Pearl Capital LLC, believes the payment pro-
cessing industry is approaching a point when
only those who can adapt will survive. "Right
now it's hypercompetitive; there's a lot of dollars chasing
the same advertising target," he said. "More brokers are
fishing in the same pool. Theoretically, there is a very
large pool so that shouldn't happen, but it could be that
there are too many people using the same exact methods
of acquisition.
"You are going to have processors that really make it
because they can grasp the technology, can offer multiple
iterations, and provide value add. And then you have the
old-school guys that are stuck in a commodity business
with declining margins."
Innovation, not duplication
For ISOs seeking to increase their market share, providing
payment processing and competing on price alone aren't
enough. Lax said it's about adding value as well, "having
the ability to say, 'Hey, I have money for you, or I have some less than an hour," Lox said. "From that point on, most of
other products for you' in addition to just pure processing.
The ISO is then able to say, '10 percent of my merchants
– I actually give them a line of credit, and on those guys,
I am making more revenue than everything else I am
doing combined.' At that point, giving away processing,
or cutting it way below market as an acquisition strategy,
makes a whole lot of sense."
At work behind the scenes
Pearl Capital was founded in 2006 to provide financing to
ISOs by selling merchant cash advance, which advances
merchants funds based on the merchants' future credit
card sales. The company focuses on using ISOs as brokers
to finance underbanked merchant customers who
typically would not be able to qualify for funding with
other lenders.
"It's really a product for those who have personal FICO
scores that are challenged but have robust or emerging
ISO/MLS contact:
Alan Miller
Strategic Alliances
347-899-4353
alan@pearlcash.com
http://www.pearlcash.com/
businesses," Lax said. "In our case, we are willing to take
a certain amount of risk on an emerging business that
hasn't been around for five years."
Pearl Capital helps ISOs offer financing to their merchant
customers through its white-label product, which allows
ISOs to provide financing as if it is their own product,
while Pearl Capital does all the behind the scenes work
processing the loans. ISOs also receive commissions on
top of their payment processing residual payments. And
if an ISO wants to receive more than just a commission,
Pearl Capital offers a syndication program that offers
profit sharing. "The cost of acquisition for brokers has
gone up and many of them are turning to the idea of
syndication as a way to make additional economics that
makes some money," Lox said.
Being the best partner
Pearl Capital is able to make underwriting decisions to
finance customers quickly. "I would say from the time
that we have the information until we grant the offer is
the back and forth is if you aren't dealing with a direct
situation where the merchant inputs all the data, gets the
downloads and says they'll take the financing."
In the future, Pearl Capital plans to deepen its
relationships with ISOs and partner with them to help
them better achieve their goals. "At the end of the day, it's
not about whiz bang technology," Lax said. "It's about the
harnessing, adoption and utilization of technology."
He added that it's ultimately about being able to focus on
the end customers and determining what they are trying
to do and what they need to accomplish their goals.
"Stop trying to think about providing just a commodity
product," he said. "The future for Pearl is to evolve or
die, fill your customer needs, and go home. Be the best
partner and deliver the most value and that is what we
are dedicated to."
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