here's a lot for an ISO to think about in terms of getting a customer up and running with an e-commerce solution: online bank accounts, payment processors, payment gateways, shopping carts and the ability to do credit approval/credit underwriting.

WebTransact LLC, a payment processor, offers merchants, ISOs and financial institutions a complete e-commerce solution to enable them to better serve their customers.

Keith Mottas, CEO of WebTransact, said he came up with the idea for the company because a family member who owns a Web-hosting company had a frustrating experience with an ISO.

He was issued a merchant account through the ISO and then paid $700 for an Authorize.NET payment gateway. Three days after the merchant account was issued, he received a notice that his account had been terminated. He did not know why.

After doing some research, Mottas' relative learned that it was because of an error reported at the bank. He asked the ISO for a refund, and the ISO, who has since gone out of business, refused. On top of all that, it had taken him three weeks to get the account issued.

WebTransact was formed in 1998 with the intent of developing a more efficient method of setting up merchant accounts via the Internet.

"We found that in 1998 and even today, it could take 48 to 72 hours or more for ISOs or acquirers to issue an account," Mottas said. "I could see the direction in which the Internet was headed and made the decision to develop the architecture and produce the program for an online credit decisioning system that would automate the entire account-approval and issuing process. The key was to develop a system in which a merchant could apply, be instantly underwritten and either approved or declined for an account on the spot."

Mottas and his team began development of the product, called InstaCredit Manager, in 2000 and launched in March 2001. WebTransact licensed its first ISO, and its program went live in May 2001. The second ISO was licensed and launched in December 2001.

InstaCredit Manager (patent pending) is an online credit underwriting system designed for ISOs, acquiring banks and other financial institutions. Using the Internet, InstaCredit Manager captures a merchant account application, runs an underwriting screening process on the applicant, which is defined by the ISO or bank, and makes a credit decision based on the information gathered and scrubbed from the credit agency and the applicant.

The process begins when a merchant fills out an online application for a merchant account. A merchant is then issued a credit card processing limit based on the average of their FICO scores (0 to 850, higher is a better score) provided by up to three of the major credit-reporting agencies: Equifax, TransUnion and Experian. WebTransact is also in the process of adding Dun & Bradstreet reports for business credit reviews.

WebTransact offers ISOs or acquiring banks licensing InstaCredit Manager the option to customize and further automate the credit calculation process for an online merchant account based on information gathered in the application process.

For example, working with WebTransact, an ISO may decide to add points to the credit score if the merchant has been in business for more than two years, or the ISO may wish to deduct points from the credit score if the business is run out of the merchant's home. The solution is completely customizable.

After the credit score is averaged and adjusted based on the FICO score and any other pre-determined scoring criteria, the account is automatically issued (if the ISO elects to do so) for a specific monthly processing limit. For example, if a merchant has an adjusted FICO of 640, then an account could be issued allowing the merchant to process up to $7,500 monthly if the ISO elects to do business that way.

"We provide the base model and then sit down with our customer, the ISO, and ask how they would like to have the system criteria customized," Mottas said. "We can have InstaCredit Manager customized and operational in two to five days depending on the amount of changes or additions."

The information entered by a merchant is captured by InstaCredit Manager and stored on WebTransact's secure servers or on the ISO's. Users of InstaCredit Manager are provided a secure login to access the administrative area of the software via the Internet. ISOs then can manage their merchant accounts online to view and/or update applications, change rates or terms, track customers, calculate agent commissions and view incomplete applications.

With online applications, there often are instances when merchants fill out part of the online application but for some reason do not complete the entire application. They may enter their name and phone number but do not complete the rest.

But even if the application is not submitted, InstaCredit Manager still captures the information so followup calls can be made to the merchant. In one instance, Mottas says, an ISO was able to turn 60% of incomplete applications into sales in one month, just by doing followup work over the phone.

To work with ISOs as well as major banks, WebTransact has developed various financial plans for licensing of the software.

"It is truly affordable by anyone conducting business in this market," Mottas said. "Plans start at $250 monthly and go up depending on the number of applications processed monthly. No other product on the market comes close to our functionality and affordable pricing. We make it possible for even the smallest ISO to afford our system."

In addition to the InstaMerchant product, WebTransact offers a complete e-commerce package that can be private-labeled for ISOs and acquirers. Some of the services available: online Web site builder, integrated shopping cart system, search engine submission, hosting, marketing tools and a private-label, FDIC-insured Internet bank that offers business and personal checking free, home loans, auto loans, business lines of credit etc.

"We're providing ISOs with a start-to-finish, totally integrated package to offer to merchants," Mottas said. "They can pick and choose the services 'a la carte' style, with everything centering around InstaCredit Manager.

"There are a lot of companies out there today that provide shopping cart services to ISOs. There are a lot of payment gateways that offer their services to ISOs. There are some shopping cart companies that have their own gateway offering services to ISOs. But there is no one out there right now who offers the complete system that we're coming in with. It's everything they need to run an e-commerce business."

WebTransact's system can be customized for various types of loans or financial services, making it an attractive solution for companies beyond ISOs and acquiring banks. "Our system can also be used by any commercial bank talking to banks who want to use it for leasing, mortgage loans, automobile loans, lines of credit, etc.," Mottas said.

"The InstaCredit Manager system can be hosted and run from WebTransact's world-class data center in San Antonio, or the ISO may elect to run the software on its own servers. There are financial plans to accommodate both licensing models."