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They Speak Your Language

M arcelo Paladini and John Martillo have found a niche not only in service but also in servicing the huge Hispanic market. These two payment-processing veterans worked for other ISOs and saw the potential for income in the industry. That vision led them to create their own New York-based organization in June 1995 under the name CPS Group, as in Credit Payment Solutions. As CPS Group expanded its suite of solutions, the two partners realized the name needed a solution of its own.

And so, in 2001, CPS Group became Cynergy Data.

"CPS Group didn't do much for us as a marketing name," says Martillo, President of Cynergy Data. "There were a lot of other CPS companies. There was confusion, and our name didn't mean anything. We wanted to come up with something newer, fresher and what we are about, which is synergy."

Paladini, Cynergy's CEO, adds, "We try to make a difference, be a little different from anyone out there with personalized services, from ISOs to merchants. That was one of the reasons why the original name didn't mean much."

What did mean a lot to these two partners was the commitment to their company.

"There's a difference between buying your own car and someone giving it to you as a gift," says Paladini. "We built a company with our own hands. We are both immigrants, from Argentina and Ecuador, respectively. Back in 1995, we had no access to information, money, investors. Using our own hands, ideas and brains, we always made the right decisions for our company. When you build things on your own, you give things more value." Growing the company from the ground up, Martillo and Paladini did it all, from sales to installation. They learned processes, policies and procedures from A to Z and garnered a strong comprehension of the industry, its issues and what it needed. First came selling, then expansion. Now Cynergy Data has a staff of more than 50 and is still growing. Yet, despite its growth, Cynergy Data keeps its core rooted in the reliability of service it brings to the table.

"All ISO channels are based on service and relationships," says Martillo. "When we were driving the numbers we wanted, we decided to restart all over again as a processing company and looked for the right relationships to build a structure for the foundation of what Cynergy is today. We know what the market needs, what the ISOs need, and we built a different company to provide for those needs."

Paladini says, "We always keep in mind our customers - the merchants as well as ISOs. We are straight shooters, always telling the ISO up front what we can provide. That gives us room for growth as well as trust in the industry."

While trust is an important part of this highly competitive business, competition doesn't seem to have much importance to Cynergy Data. "Any of the processors out there could be considered a competitor, but we don't feel any pressure. It's not an issue for us," says Martillo. "We don't need to show lower prices in order to get business. We just make the opportunity for agents to try us."

Martillo is quick to point out that Cynergy Data is competitive but does not have the best prices. In order for Cynergy Data to provide the best service, it has to have what it considers the best infrastructure and the best professionals in place. As every company chief knows, that costs money - money that Martillo believes is well spent.

"In the long run," he says, "our customers get better service and our attrition rate is the lowest in the business. This is a long-term industry. If you're in it for money today, you're in the wrong business."

The business Cynergy targets is small to midsize merchants on a national scale. While Cynergy does service major accounts as well, 86% of Cynergy Data's portfolio is small to midsize retail merchants, with a significant number entrenched in the Hispanic arena.

"We are the number one processor in the Hispanic market," says Martillo. "We are fluent in both Spanish and English in all our departments."

Bilingual services Cynergy Data offers include a full suite of in-house programs for gift cards, e-commerce and electronic check conversion as well as a faxed application program. Cynergy Data also offers competitive and customized residual pricing, conversion incentive programs (see "New Products" in Green Sheet issue 01:08:02, Aug. 27, 2001) and guaranteed leasing.

The hottest product and service that Cynergy Data is touting is its CHARGE ANYwhere. It allows merchants to accept wireless credit card transactions, send e-mails and faxes, and send and receive pages. Additional benefits include instant approvals on all transactions, lower processing fees, reduced fraud exposure, near real-time reports, the ability to produce customer receipts, and lightweight and easy mobility.

Cynergy Data also provides terminals, pinpads, printers, check readers and related equipment from all of the major players, such as Lipman, Hypercom, VeriFone, Thales, RDM and MagTek. Its software partners include ePayment Charge, Authorize.Net, IC Verify and PC Charge. Leases are handled by Cynergy Data through various leasing relationships.

"What makes a big difference to the ISO that brings business to us is having everything in-house," says Martillo. "We do everything ourselves and offer everything in-house."

From data entry to risk management, from front end to back end, from tech support to underwriting, Cynergy Data keeps it under its sturdy roof. The only service Cynergy Data outsources is its chargebacks and retrievals, handled by a third party. But that service soon will be coming in-house.

According to Martillo, Cynergy Data is in the process of building a new internal system that will incorporate not only in-house chargebacks and retrievals but will also launch online access for both ISOs and merchants. Applications will be able to be downloaded online, MID numbers will be provided within hours and Cynergy Data guarantees every ISO will have an approved account that same day.

"We decided to build our own system in-house," says Martillo. "Full control, change and updating can only be done with a fully customized software database. We want to be dynamic because this industry is changing so fast. If you build your own system, you can make the adjustments you need as you want to meet the changes."

Paladini says, "Our customer is the ISO. We work for them. How we can make them happy, how we can support their sales - that's what we are all about. We are service driven, and we pay residuals. We understand how crucial the residuals are for the sales rep. Part of our service is that you can count on your residuals every month."

More than 200 ISOs are getting paid regularly by Cynergy Data as a result of the more than 10,000 merchants Cynergy Data services. And while sales have doubled in the past year for the company, Cynergy Data treats each one of its ISOs and merchants with equal personalized care. ISOs receive continual support during business hours from a department that is exclusively dedicated to meeting sales reps' needs and answering every call personally that comes in from an ISO.

Every new sales agent who comes aboard is assigned a Cynergy Data rep. The agent receives a welcome package of policies and procedures and goes through a tele-training seminar; onsite training is offered for the larger ISOs. What type of ISO is Cynergy Data interested in? People who are serious in business.

"The ISOs who are hit-and-run scenarios and don't care about the merchants are not who we want to do business with," says Martillo. "We want to do business with guys who understand the value of the account and are in it for the long haul. It is amazing how the turmoil in the industry is bringing us good professionals and agents looking for a home that is more serious and one they can trust and do business with."

Paladino says, "Those types of ISOs have been a good fit for us. There are a lot of ISOs who do business and then go elsewhere. For us, it's been different. When they start doing business with us, they stay with us."

Cynergy Data further ensures its quality of service for all of its ISO channels via a survey conducted once a year. Five to six pages of questions are sent out, covering issues such as how they rate Cynergy Data, what it's doing well, what it's not doing well and what the ISO needs Cynergy Data to do. According to Martillo, great ideas have come out of the survey.

Another area of the industry that Cynergy Data is benefiting from is the recent merger/acquisition frenzy. "I think because of the size we are, mergers and acquisitions have helped us," says Martillo. "When ISOs have to deal with a big company, they feel once they become part of the monster, they're not going to be recognized and their merchants won't be taken care of. Mergers and acquisitions work in our favor because we are smaller and give personal attention. Fortunately, I think the industry will consolidate more and more."

Paladini sees the benefits of this aspect of the industry as well. "The industry has been driven by small agents, and that's who we need to focus on," he says. "All those mergers and acquisitions are only doing good for us. Every day agents come to us and say, 'They don't know what I need, they don't know me.' We do."

Both company execs believe the industry is in a young stage and has a lot more to accomplish. They both also believe that service will be the key because merchants are more educated and expect customer service that truly helps them.

"With our philosophy, we are right up that alley," says Martillo. "With our knowledge and background, we can really understand what the agents need as well. We lived those years. We now are bringing service and technology to the agent. We satisfy a lot of agents' needs."

Martillo also believes attitude is changing throughout the industry as well. "There was a lot of used car salesman mentality a few years ago. Now everyone is trying to shape up. That's good for all of us," he says.

Will Cynergy Data ultimately succumb to the gobbling up of small, successful players by the bigger, hungrier guys?

"We have been approached, but that's not even in the picture," says Martillo. "We are a young company, guys having fun and getting great personal reward from what we do. Our original concept was to do a company we can be proud of and enjoy. The money will come, and it has. We are still enjoying it, so much so that it's hard for us to leave the company at night. I want to return every call and call every person who wants to talk to me. For us, enjoyment is key."

Paladini says, "Our concern is not how to grow the company but how not to lose the flexibility and personal service our customer needs. Flexible and fast - the market cannot bear a company that doesn't understand those needs. But stability is key, too. We always will keep up with technology and service and never will forget where we come from."

Cynergy Data ISO contact: Danielle Vaughn Phone: 800-933-0064, ext. 5710 E-mail: daniellev@cynergydata.com

Company address: 109-15 14th Avenue, Suite 200 College Point, NY 11356 Phone: 800-933-0064 Fax: 718-463-6685 Web site: www.cynergydata.com

ISO benefits: _ Places huge emphasis on service. _ 86% of portfolio is small to midsize retail merchants and is number one processor in Hispanic market. _ All departments are fluent in Spanish. _ Bilingual services include a full suite of in-house programs for gift cards, e-commerce and electronic check conversion as well as a faxed application program. _ Comprehensive online database gives back-office capabilities to ISOs for everything from residuals to viewing merchant statements.