Page 46 - GS170401

MeetTheExpert

technology play. We have our fees, pressure tries to drive Who has had the biggest influence on your career?
the fees down, the ISOs try to drive the fees down and
the credit card companies try to raise the fees. Margins on I would probably have to say my lead professor at college.
interchange don't affect us at all. If anything, I would say He taught me the difference between engineering and
it's a positive thing for companies like us because it helps technology. He taught me that there is nothing new in
us defend against Square. technology. If you look at the first payment terminal, it
was a combination of a modem, a magstripe reader, a
There was a time when we had a lot of merchants that keypad and a printer. It was nothing new; it was just a
would use our online terminal for only a few dollars per new combination of existing technologies. He had a big
month, but they would only do one or two transactions a influence on my perspective on technology and also my
month. We ended up losing those merchants to Square. If career
you work out the interchange rates between Square and
a standard merchant account, the interchange rate on a How has the payments industry evolved since you
standard merchant account is always going to be lower.
founded your company?
But if you work out the basic fees, for gateway and I think the biggest thing is Europay, Mastercard and Visa
statement fees, then it only works out lower if you are (EMV). That's changed the focus and raised the barrier to
doing more than maybe $1,700 a month in credit card entry for the industry for a lot of people. EMV has made
revenue. That helps us lower margins for the merchants, it much more difficult on people who are developing
because the lower the interchange is for those merchants, software in their spare time in their spare bedroom as I
the more they want to use us instead of Square. It doesn't did 20 years ago. However, the whole push behind EMV is
help the ISOs; it's squeezing their margins, but we are not clearly meeting its intended goals of securing things. You
getting a piece of that pie anyway can't steal an EMV chip and burn it into another card and
buy a big screen TV at Best Buy.
How does eProcessing Network help
small and midsized merchants? What do you see as especially challenging in the
industry, and how is the industry affected?
With lots of tools that increase merchants' own efficiency
throughout their busy day. Things like inventory Requirements like PCI, PA-DSS, QIR, and the costs to
management, bill pay, and accounting integration. implement such things are a big challenge these days.
When we populate their accounting packages with the The credit card companies are imposing these security
transactions they ran through our gateway, it saves them requirements that have to be met. They charge hundreds
a heck of a lot of data entry, especially with inventory of dollars to take a test to certify for QIR [Qualified
management. Integrators and Resellers] that our tech support agents
now have to pass to be able to do the installation of our
What advice would you give to a software developer software with a merchant. It's costing us a lot of money
who is just starting out and wants to enter the to be compliant with these things, and it's one of the
ways that the brands are raising the barriers of entry for
payments industry? everyone across the board.
I would say learn as many languages as you can because
there is nothing you can do today that can be done with What books have inspired you recently?
one programming language. You have to have software
on your computer that is written in one programming The Hard Thing About Hard Things: Building a Business
language that communicates with servers written in a When There Are No Easy Answers by Ben Horowitz.
different language, and then you want to integrate it into It's the story of Ben Horowitz and Marc Andreessen,
accounting packages and that is also written in a different who started Netscape. They charged hundreds, even
language. thousands of dollars for website servers and browsers
even though Microsoft was giving them away for free.
Any good programmer will tell you after they have They still managed to continue to grow in the face of that
been programming for a few years, by learning one competition. I was a big Netscape fan back in the day.
programming language, you can learn any other language
within a matter of days.

46