erhaps you have a business problem, and you think your organization and merchant customers might benefit from greater efficiencies and improved processes. Or maybe you're looking for the latest research on debit cards, Check 21 or merchant retention.

Why not hire a consultant?

Atlanta-based Collective Dynamics, LLC provides research and consulting services to major proessors, acquiring banks and ISOs in the payment processing industry. Services include strategy, marketing, information technology, operations and financial analysis in areas such as POS and card-centric products and services, electronic consumer payments, retail banking delivery channels and information technology management.

The company is also an implementation partner of Infonox's TranSending System, a complete merchant acquiring solution for the management of merchants, agents and transaction activity-from origination to settlement.

Stephen White and Steven Bacastow founded Collective Dynamics in 1997. They offer expertise in single-point-of-entry technology related to merchant acquisition and retention and all major forms of POS product requirements, architecture and design.

Bacastow said his and White's backgrounds and experience (between them they have spent 50 years in payments and technology) complement each other and the business well.

White has over 25 years of business management experience, predominantly in the financial services industry. He started out with IBM, and then worked at Wells Fargo and Wachovia before becoming a consultant. He was also a partner with Arthur Young & Co., in charge of financial services.

Bacastow's background includes 25 years in information technology and about 12 years in payments. He has held key positions in sales, systems development, EDP auditing and management consulting. He is also a certified Information Systems Auditor.

The company employs between eight to 12 people, with an average of 25 years of hands on experience in the payments industry, and brings in $2 - 3 million annually.

White and Bacastow have recruited people they previously worked with: some are former clients; some are people they've known throughout their careers on the banking side; and some they've even met in unsuspecting places like church who shared a similar background in payments and technology.

From its inception, Collective Dynamics has worked with major technology companies, payment processors acquirers and ISOs. "We help them improve their technology and their processes for running their business," Bacastow said.

Its list of customers over the years includes companies and financial entities such as American Express, Bank of America, Bank One, Chase, CheckFree, Coca-Cola, Concord EFS, Discover, EDS, Equifax, the Federal Reserve Bank, First Data Corp. and First Tennessee Bank, among many others.

Global Payments Inc. hired Collective Dynamics after Y2K to help develop a complete Web-based merchant boarding and management system for its direct sales force and ISOs. An October 2002 article in CFO IT magazine, "Any Happy Returns?" described the project (also naming Collective Dynamics as the consulting group), with Global Payments' CFO calling it a success.

The system White and Bacastow helped build enabled sales people to enter merchant account information from a single point of entry-their laptops-and routed the data to Global Payments' seven legacy systems using the Internet. The system eliminated all paper and additional input of data, plus it contributed to a 30% growth in new accounts.

"By automating the whole process you reduce errors and delays in the merchant boarding process," Bacastow said.

The CFO of Fleet BPS (recently acquired by Bank of America), happened to read the CFO IT article and contacted Collective Dynamics because Fleet was also looking for a similar type of solution.

"We explained that we didn't actually have the solution-we built it, but Global Payments owned it-but we could help them find one," Bacastow said. "The bank retained us last summer to look at what was available in the marketplace and recommend a solution to them; it was during this process that we found Infonox."

Infonox provides a wide range of infrastructure solutions for businesses and financial institutions for deploying, aggregating and managing transaction services on PCs, POS terminals, mobile devices, kiosks and ATMs.

Its TranSending System handles everything from merchant signup, underwriting and boarding to extensive risk, profitability and commissions' analysis, reporting and accounting.

Fleet hired Collective Dynamics to implement the TranSending System, and this project spawned another type of partnership for White and Bacastow. "We decided that because the Infonox solution was so good, we would approach the company to become its implementation partner," he said.

"And Infonox liked us because we were the only other consulting company that had built a system like this." Collective Dynamics joined forces with Infonox in November 2003.

Bacastow said Collective Dynamics is now in talks with several other large processors and acquirers and some ISOs about using the Infonox system as part of their core technology and processes.

"It provides ISOs with a turnkey system to use for managing their merchant business," Bacastow said. ISOs can use the system to help them sign up more merchants and do it more quickly and with fewer errors.

Collective Dynamics developed an ROI model where they study an ISO's or acquirer's current business and ask the company a series of questions; based on the answers provided by the client, they provide an analysis that can pinpoint module by module within the system where the business will get return on its investment.

"We do this so they can understand if they make an investment in technology of X, they'll see exactly where it will produce results in their organization," Bacastow said. "The ROI analysis takes into consideration the portfolio size, and the pricing model for the system is tiered so small ISOs all the way up to the largest processor can afford it.

"It puts smaller ISOs at an equal playing field with regard to their technology and their business process so they are not at any disadvantage."

The system also eliminates the clunkiness and error-prone process of entering data manually into systems from paper-based processes. In today's world of e-commerce, most ISOs are still using a primarily paper-based process in setting up merchant accounts, which not only causes delays in getting merchants up and running, but also causes errors with application downloads and terminal deployments that can result in costly rework for the ISO or sales rep.

"By automating that whole process you ensure that sales reps are going to sell the products that you want them to sell at the prices that you prefer they sell them, and that they will match the application that you want to run on the device, with printers and so forth," Bacastow said.

"This also makes the experience much more pleasant for the merchant; they don't have a negative experience as their first experience with the ISO. They get the product that they ordered quickly. It's the right thing, and it's configured correctly."

Infonox recently introduced enhanced capabilities to TranSending System as part of TranSending version 2.0, which was scheduled for availability in June 2004. The product is now compliant with Visa's Cardholder Information Security Program (CISP) and enhancements include an upgraded commissions module, merchant boarding to additional end points, and enhanced underwriting capabilities.

"TranSending has put to rest the build vs. buy debate for merchant portfolio management systems," White said. "Infonox simplified and automated a very complex process, creating a standard for an industry that has never had an end-to-end, viable third-party solution. The breadth of the TranSending System functionality, its flexibility and its off-the-shelf availability make it an attractive alternative to custom development."

In addition to offering management and consulting services, Collective Dynamics conducts both proprietary and syndicated research and conjoint analysis studies. Its findings help companies in developing new products and improve their marketing and business strategies.

The company has completed studies in areas such as Check 21, debit cards, overdrafts, recurring payments, electronic bill presentment and payment (EBPP), micropayments, and is currently looking for a partner to complete a merchant loyalty and retention study.

"Every year we try to do six new pieces of research in the payments area," Bacastow said. "We try to do research in areas with a specific focus that hasn't been done before in the industry-it makes us better consultants and helps our customers."