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Insights and Expertise
StreetSmarts SM
Consolidation:
Be prepared and professional
By Allen Kopelman The B-side of our business
Nationwide Payment Systems Inc. This is the part of the business that frustrates me the most:
when Company A buys Company B and the new owner
hen my partner Dave and I opened our ISO blows up the whole thing for one reason or another. The
in 2001, we signed on with Imperial Bank of acquiring company usually wants to change everything,
California. We had a good run, with year- from Schedule A and back-office procedures to under-
W over-year increases in our residuals and writing guidelines and help desk support. The people you
great mentors, many of whom are still friends and part- know are now gone or have new bosses, and things can
ners today. Then one day, Comerica took over Imperial change.
Bank, and there was trouble in paradise.
I have lived through every scenario possible when it
After a few months of business as usual, we had to move comes to companies being sold. Here are a few examples:
our merchants to a new processing platform. That night-
mare took us away from selling to working in the field • Bankruptcy: A bankrupt company could liquidate a
with hundreds of customers. merchant portfolio in a fire sale, immolating its part-
ners' hard-earned residuals and refusing to pay them.
We quickly learned that our new processor required more
than just a VAR sheet to reprogram POS systems and did • Instant upgrade: A rebranded acquirer or ISO could
not even support the numerous Lipman terminals in our provide an overall better deal with new products, ser-
portfolio. We had no choice but to look for a new home. vices and excellent support.
After moving our portfolio to Comdata, we had a good • Termination: An impersonal company could sum-
relationship for years. When Comdata exited credit card marily dismiss and pay its partners, or provide a final
processing and sold to PAI, we found inconsistencies in payout from a forced sale.
our residual payments.
• Culture wars: A company may not have the same risk
The new owners investigated and recovered $40,000 in tolerance as its acquired brands and terminate high-
funds on our behalf. This was the beginning of another risk accounts.
great relationship. PAI's open-door policy helped us close
big deals and grow the ATM side of our business. We I recall a new partner giving us three days to shut down
prospered in our partnership until another company, a large group of merchants in our portfolio. These mer-
with a very different outlook and culture, acquired PAI. chants had been processing with us for about seven years;
we weren't comfortable just cutting them off, so we ap-
pealed the decision.
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