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An Evolution of E-commerce

"We started as Web developers in '94, wanting to get into e-commerce for small ma-and-pa stores. We discovered early on that it was hard to find a reputable and knowledgeable merchant account provider to partner with for e-commerce solutions. A lot of ISOs could resell gateways, but their expertise was not in implementation and maintenance. Agents would sell services and then be gone. We cared. We had to. Our clients were the merchants. We had to answer to them." Robert Hughes, Co-Founder, Merchant-Pay.com

And answer Merchant-Pay.com did. By 1998, Robert Hughes and his two partners had become extremely knowledgeable about products and services that met merchants' e-commerce needs. All the pieces came together and an integrated product was created, combining an efficient and user-friendly shopping cart in conjunction with an effective gateway to support the service. Merchant-Pay.com was born as an Internet payment gateway and third-party transaction processor all in one.

Today that gateway is integrated with nine different processing networks, including such major players as NOVA, VISANET (Vital Processing), Concord/BuyPass Terminal ID (TID), FDR/FDC, GENSAR, MAPP, CES/4 (CardNet/First Data/FDMS), NABANCO (FDMS/First Data) NDC/CNET/N (GPS), PaymentTech and Global Pay. What does this mean for ISOs? Plenty.

For starters, Merchant-Pay.com works solely through ISOs. The primary benefit to ISOs is the fact that the mechanism by which the merchant connects to the gateway - the shopping cart - is a fully integrated part of the e-commerce solution. It's not an add-on feature that the merchant has to search for on his or her own.

Second, the merchant support is provided by Merchant-Pay.com, not the ISO. Merchant-Pay.com doesn't require the reseller to provide it unless the reseller wants to. And the bow on the Merchant-Pay.com package is that it comes completely branded as the ISO private label. Is there an ISO out there who doesn't want to increase the value of their brand?

Pricing levels are designed to offer greater profit potential to ISOs based upon their monthly account volume (see chart below).

"The profit point is also pretty great with our system," says Hughes. "Competitive, if not less."

But, according to Hughes, that's where the competition ends.

"Our competitors' shopping carts are not truly integrated with an online system," he says. "And don't forget our unique support. We've not come across any gateway that provides first-tier merchant support. We offer support directly to the merchants either via telephone or e-mail, just as if they were our clients and not those of ISOs - because they are."

Merchant-Pay.com wants ISOs to focus on their core competency - sales. Merchant-Pay.com believes ISOs should be selling accounts, not supporting them.

"If our ISOs want to be hands-on, great," says Hughes. "We provide the mechanism. They don't have to use our support services."

But it would seem foolish if ISOs didn't take advantage of those heavily invested support systems that provide extensive technological expertise in a timely and efficient manner. The systems are constantly being surveyed, monitored and upgraded to meet the ever-changing e-commerce needs of the marketplace. Merchants get a live person 24/7 through Merchant-Pay.com's Real-time Ticketing System. In each merchant interface, there is a support icon that the merchant need only click to automatically send a request, question or problem to the Ticketing System as a priority request.

Within one to two hours, that "ticket" is assigned to a technician who responds to the merchant via e-mail or telephone with the solution. The system is live 18 hours a day with after-hours response handled through paging of the technicians. Merchant-Pay.com believes just as strongly in ISO support on an ongoing basis. Branded user manuals are provided to each partnering ISO. Online ISO training is scheduled at the convenience of the ISO to educate agents on the benefits as well as the features of Merchant-Pay.com's products and services.

"We believe in this market it is getting so tight, and merchant services are a commodity," says Hughes. "Rates are getting cut. You must increase the value of your brand and your product and services. Your merchant has to buy value, while the better rate will get the business. We can't be the end-all solution, but we can definitely help."

By providing a Internet gateway system with the merchant vested in the solution in terms of time and results, Merchant-Pay.com believes the merchant will be less likely to drop the providing ISO for a couple of basis points.

It would appear that belief is ringing true. More than 6,000 merchants are utilizing the Merchant-Pay.com transaction processing system, and more than 250,000 shopping cart solutions have been downloaded, though the process for the shopping cart has changed. No longer downloadable, it is now in an online version, form-driven with the merchant configuring it via the Web. The technology is the same best-of-breed shopping cart solution, according to Hughes.

Merchant-Pay.com's shopping cart solution isn't all that has evolved. According to Hughes, its business model is changing as well.

"If the market constantly evolves and you don't, it is only a matter of time 'til you are out of the market," he says. "Our biggest challenge is the same as everyone's - the economy. We haven't seen it affect us greatly because e-commerce is still going strong. And we will continue to service that market."

Hughes says the biggest challenge facing ISOs today is being able to create enough value in their own organization and product/services so as not to get gauged by the ISO next door. He believes ISOs need to do everything they can to retain their merchants.

What Hughes hopes ISOs will realize is that Merchant-Pay.com is not only offering them Internet services for new accounts but for old merchant accounts as well, thus strengthening the bond with those existing merchants.

From its beginnings as a Web-development business, Merchant-Pay.com has become an e-commerce service provider for ISOs. Where is Merchant-Pay.com heading in the near future? "Up!" Hughes says. "We are planning on welcoming 50 to 60 new ISOs annually."

His message is simple: "Do what you can to strengthen your brand, whether through us or another provider. We would love to be hooked up with every ISO, but that is unrealistic."

So which ISOs is Merchant-Pay.com looking to hook up with? "I hate to sound cliché, but we want to work with the ISOs who are fair," says Hughes. "There are a lot of ISOs who want to make 95% of the money and split the rest between their providers. We don't want to work with those. We want to work with those who are fair to their merchants, themselves and to us."

Merchant-Pay.com's corporate headquarters are located in Atlanta along with its billing, accounting and technical-development divisions.

"Development is half our business," says Hughes. "If we didn't develop and research our products, we wouldn't be Merchant-Pay.com."

All work, both software and tech development, is done in-house. As for the general day-to-day operations and the all-important technical and sales support departments, they are located in Corpus Christi, Texas.

Merchant-Pay.com offers its e-commerce transactional processing on a month-to-month basis - no long-term commitment is required. Even though there is not a free trial period implemented yet, Merchant-Pay.com is staging a seven-day trial for an ISO's merchants. Merchant-Pay.com puts its product capabilities onto the ISO's interface, and the ISO then creates a demo for the merchants.

Merchant-Pay.com Pricing Levels: 1st Tier, 0 to 24 Users, $50 Setup, $16 Monthly 2nd Tier, 25 to 49 Users, $35 Setup, $13 Monthly 3rd Tier, 50 to 99 Users, $25 Setup, $11 Monthly 4th Tier, 100-plus Users, $15 Setup, $9 Monthly

ISOs interested in what could be a lucrative demo should visit www.merchant-pay.com.