ISO Hill Street Blues

W orldwide Merchant Services

Back in January of 1999, a new sheriff came to ISOtown. The sheriff's name: Worldwide Merchant Services. The Green Sheet covered its arrival (see issue 98:11:03).

Complete with a sharp-looking uniform, a shiny badge, and a well-oiled arsenal capable of not only protecting the peace but knocking out the bad guys-bankcard relationships with limitations, expensive fees, slow processing and antiquated practices, not to mention the cruel and inhuman punishment of independent sales professionals-WMS promised a new law and order in the land.

This new sheriff was also armed with impressive technology, namely, advanced POS terminals, state-of-the-art software, multiple Web solutions and superior customer service. But there was more: it seems this sheriff had a heart.

Now we know what you're thinking-a bankcard program with feelings!

Worldwide Merchant Services promised free ownership opportunity-an independent contractor (IC) -and employee-owned company-designed to serve merchants of any size whether operating on a single terminal, multiple terminals, or single/multi-user PC-based system. Stock distribution based on number of sales contracts produced, as well as separate membership pools where the little guy gets the same chances as the big boys, were at the core of this program.

Well, it's been two years. GS decided to check in and see if WMS did indeed restore law and order to the Wild West, Midwest, and East of ISOtown.

Recently The Green Sheet went up to ISO Hill and talked with the boss. Wearing the gold captain's bars at Worldwide Merchant Services is Bob Piesner. A 20-plus year veteran showing no signs of retiring, he's a serious and very straightforward-speaking leader. The first question posed to the chief was the obvious one. Exactly how does the stock program work, and even more importantly, is it working? Is WMS an IC-owned and operated force to be reckoned with? You be the judge.

Chief Bob explained that WMS takes the amount of equity being given and does a 25% split: 5% internal, 10% each to two groups: big boys (Group A), little guys (Group B). According to Chief Bob, the initial response was overwhelming-600 calls. But as everyone who has ever watched an episode of "Law & Order" knows, when the suits get involved, it's a different story. Worldwide Merchant Services faced unexpected legal challenges. WMS had to reorganize to a limited liability company (LLC), which meant lots of SEC compliances, research, attorneys' fees. It was a very expensive undertaking. It took much more time than WMS had anticipated, but it was finally accomplished, with some unforeseen alterations. The biggest change from the original program was in stock issuance. Since stock cannot be directly issued in each state, technically, individual phantom stock programs that are legal and acceptable in all states were set up.

In the A Group, participants must make a commitment of 1,500 applications over a three year period, averaging 40 or more per month. And that commitment involves exclusivity. All the business the big boys write goes to WMS, with the only exception being if WMS cannot meet special needs. The A Group is also exclusive in its membership. Only 10 to 12 participants will be accepted. At present, four have joined the A Team, with WMS anticipating more to quickly sign up. As for the stock award, it doesn't vest until completion of obligation. Members of Group A won't see any percentage of profits till fully vested. Normal residuals and whatever contracts call for will be regularly paid, but stock vests within three years or earlier if commitment is completed.

However, the bulk of WMS business is not coming from the A Group. It's the B Group that will see the most activity. Whether two or 20 transactions a month, participants will be issued stock (membership units as per the LLC). After fully vested, the B Group will receive each month 1/36 of the 10%, distributed in exact proportion to what each team member puts into the group. As with the A Team, the B Team will accumulate equity during the required period of time. Participants must remain for three years at which time their participation will fully vest. As opposed to the A Team, however, there will be no cutoff in Group B. At present there are 20 signed up, with WMS anticipating many more to join. The clock is already running on Group A. Group B hits the streets within 90 days.

A special provision of the IC program is that WMS agreements will allow "in and out," meaning revenue coming in and share of the profits going out. According to Chief Piesner, the profits will continue as long as whoever buys the contract continues the residual stream.

GS asked the Chief what happened with those initial 600 calls. He responded that because of the legal challenges and the time involved in getting the program out on the street, many professionals just couldn't wait around the stationhouse. The Chief stressed, "It's going now!"

And how is Worldwide Merchant Services treating its contractors now that the program is running and gaining momentum? Bob emphatically states that WMS is a sales support agency, "ISOs are WMS' most important customers." WMS has put together a one-stop shop-around service agency for independent contracts. Partnering with PayGate, CrossCheck, LeaseCom, CCI and Kwik Web, WMS offers ISOs solutions to all needs, with special attention to the Web.

Chief Piesner explains, "The market needs us. Merchants today may not really need it, but they must have a Web presence. No matter what, each new business today needs to have its presence anywhere and everywhere it can." WMS provides a full package-domain name, custom designed Web site, shopping cart capabilities, secure encryption, no hosting fees the first year, to name a few. WMS will design to suit the needs of any ISO, providing startups with a minimum of two merchant accounts, three if retail-all for one payment with one 48-month lease. The reasoning behind the multiple accounts: merchants can receive qualified rates with no penalties for business that is keyed out.

Two more examples of how Worldwide Merchant Services is bringing peace to the street is through its "WIMP" and "WASP" programs-Worldwide Indispensable Merchant Pack and Worldwide All-in-One Service Pack-services that WMS provides through outsourcing. Building a strong, solid base through these programs, WMS feels it is in position to expand its number of contractors rapidly. WMS maintains its quality of service with internal backup and outsource support from the best people. "Our outsource contracts do not go to the lowest bidders. Our partners are the best at what they do. If not, I'll get someone else," states the boss. Spoken like a true law and order man.

Worldwide Merchant Services is a small force with only eight employees at its headquarters. Chief Piesner is quick to point out that WMS could handle up to 4,000 applications each month because of its total automated procedures and outsourced services. With a low overhead, WMS hopes to remain very profitable and pay out more profits to its teams.

One area that has recently automated is WMS' method of distribution of residuals. Effective April 1, WMS is ACHing funds to all reps from its own system. No more checks in the mail.

WMS overall boasts a program that compensates independent contractors better than any other. What share of that market does Worldwide Merchant Services want? Chief Bob states that over the next three years, "We expect to wind up with a base of at least 40,000 to 50,000 processing profitable merchants."

WMS concentrates on personal relationships as reflected in a final word from the Chief, "We want to service the rep to death!"

For more information about Worldwide Merchant Services visit http://www.visanmc.com/Home.html or call (800) 847-2662.