hen Tommy Glenn founded Financial Technologies Inc. (FTI) in May 1995, he had a goal of growing the company into one of the largest ATM deployers in the United States. At the time he didn't imagine that he would eventually sell it to a bank, much less an Internet bank.

But that's exactly what happened. In December 2003, NetBank Inc., the country's largest independent Internet bank, purchased FTI, and made it a wholly owned subsidiary.

Since that time, FTI has undergone not only a name change, it's now known as NetBank Payment Systems Inc., but also a new direction. The company expanded from offering only ATMs to now offering an entire payment systems platform for small to mid-sized businesses.

But it also remained true to its original goal; it's the second largest ATM deployer, among banks, in the country. Among ISOs, it's the third largest.

NetBank Inc., a public company (Nasdaq: NTBK), is a diversified financial services company. In addition to the bank, and ISO NetBank Payment Systems, it owns a few mortgage companies (collectively it's one of the 30 largest mortgage companies in the United States) as well as a business equipment leasing company and a specialty lending company serving the boating and RV market.

The bank was started in 1996 to provide products and services via the Internet rather than through bank branches in order to save customers money on deposit rates and fees.

NetBank offers products including small business and personal checking accounts, money market accounts, CDs, IRAs, ATM cards, Visa check and credit cards, mortgages and home equity loans. The bank serves more than 165,000 customers in all 50 states.

Benefits of Being Part of a Bank

"NetBank Payment Systems is an ISO that's part of a bank, and with that brings many advantages," Glenn said.

Those advantages include more financial security and a quality, up-to-date and secure infrastructure; the company is also profitable.

So for ISOs and merchant level salespeople (MLSs), "there's a much higher probability that we're going to be able to pay you and that you'll have someone you can count on financially," Glenn said. "Not only can we pay you today, we'll be around long term to do it tomorrow.

"And although we're owned by a bank, we still operate like an ISO: We can move quickly and make decisions quickly. We try to have a fairly aggressive approach to the marketplace, but we also have this balancing factor of being part of a publicly run company and a financial institution."

The balancing factor Glenn referred to is regulation. As part of a publicly traded financial institution, the Office of Thrift Supervision (OTS), the Federal Deposit Insurance Corp. (FDIC) and the Securities and Exchange Commission (SEC) monitor companies such as NetBank. The companies must also follow the rules of the Sarbanes-Oxley Act, for example.

NetBank Payment Systems operates three main offices: its headquarters in Jackson, Miss., an office in Ft. Worth, Texas and one in Lake Forest, Calif. It has 65 employees and a market presence nationwide.

Glenn is NetBank Payment Systems' President. Before founding FTI, he ran the operations of a petroleum and convenience store operator. And before that he was in a completely different field: He was a psychotherapist. "Oddly enough, my degrees are in psychology," he said.

Glenn became interested in the ATM and payments industry about nine years ago. "I was in the retail business and exposed to the low end, low cost value proposition of ATMs, which, coming onto the scene then, seemed like a good opportunity," he said.

After founding FTI and growing the company for nine years Glenn said he realized, "that if we were going to continue to grow, we'd need a partner with enough financial strength to start doing more acquisitions, so we could have a certain market share and the leverage that comes with that in terms of pricing.

"When NetBank came along, its history had been in buying companies with good management, funding the company, and allowing them to run it. NetBank was a good fit for us, and we were in the right place at the right time."

Other officers of the company include De Lone Wilson, Vice President of Sales/Channel Distribution; Shana Bursi, Vice President of Operations; and Dave Murkherjee, Vice President of Finance.

A Complete Solution

The company is focused on expanding from offering not only ATMs but to being "a fully integrated, single-source provider of payment processing solutions to small and mid-size businesses" including multi-function ATMs, merchant services and point-of-sale activated prepaid services.

Services offered include credit and debit; electronic check conversion; government and payroll check cashing; recurring automated clearing house (ACH) debit; gift and loyalty programs; prepaid wireless and long distance cards; prepaid debit cards; and accounts receivable conversion.

The company can provide all of these services on one or two pieces of equipment. In the past, businesses have had to use one piece of equipment for each service, whether it was for credit/debit processing, prepaid services or check cashing.

To further explain "integrated," Glenn gave the example of a grocery store with an ATM at the front of the store that integrates with the store's POS terminals for check cashing.

"We're creating a platform where all of the payment solutions are strong and industry leading solutions, so if you work with us, you have a full range of processing solutions that you can offer and all from one company," he said.

"You can also say, 'I'm a payment solutions provider for this merchant,' instead of, 'I provide only credit card solutions.'"

An Important Sales Channel

NetBank Payment Systems highly values its distributor partners, or ISOs/MLSs; the company refers to them as "value-added partners."

As an MLS working with NetBank Payment Systems, you will benefit from monthly and quarterly training sessions for new products and services, personalized sales collateral, assistance with trade shows, advertising and direct mail services and back office support.

For qualified partners, the company will even set up initial appointments with prospects.

"We have a telemarketing group that sets appointments for qualified leads," Glenn said. "You tell us the zip codes you're working in, and we provide either the direct marketing to retail or we contact them directly to set the appointment. If you're doing business with us, there are no fees for this service."

In working with NetBank Payment Systems, MLSs earn their revenue through buy rate and revenue sharing programs. The company also offers performance bonuses and residual income.

The company's motto, "A person behind every machine," means that it offers 24/7/365 customer service and a staff of service technicians to repair equipment on site if needed.

NetBank's solution enables merchants to deliver all of their payment products through one POS device and also integrate those solutions with services offered on an ATM in their store.

"When you sell a value meal, per say, you are getting multiple streams of revenue, so it's more cost effective." This proves the same for both the merchants and MLSs.

Since the company has a history in the ATM business, NetBank has a strong presence in grocery and convenience store merchants, but also targets any retail brick and mortar merchant and medical facilities, too.

We feel like we're creating a new ISO/MLS model," Glenn said. "For people that have been out in the field selling one product for a company, we're leading a consolidated effort in bringing all these payment solutions together in a way so they have a better solution to bring to their customers."