n the payment industry's highly competitive practice of ISO and merchant level salesperson (MLS) recruitment, processors will go to great lengths to differentiate themselves. They compete with pricing, creative marketing programs and compensation models. Many salespeople, however, simply want their processing partner to provide quality service and offer accountability. Can they find this with a public company?

Acies Inc. is a third party payment processor that is a wholly owned principal operating subsidiary of publicly held Acies Corp. (OTCBB: ACIE). Its shares are traded on the Over the Counter Bulletin Board, an electronic trading service. Although the OTCBB has no listing requirements (such as NASDAQ or New York Stock Exchange) Acies must fully comply with the regulations of the Securities and Exchange Commission, including filing and publicly disclosing financial statements quarterly.

Acies primarily provides payment processing solutions for credit, debit, electronic benefits transfer, check conversion, and gift and loyalty transactions to U.S. merchants of all sizes. It also offers POS equipment, cash advance products and a contactless card program.

Being a public company certainly has its challenges. One of these, said Oleg Firer, Acies' Chairman, President and Chief Executive Officer, is having the company books open. "Every single potential ISO that wants to join us, or is with us, is able to see how we progress and exactly who we are, while most of our competition is privately held and often gives out numbers that cannot be substantiated," he said.

Public status offers some advantages, though. "It's a great marketing tool," Firer said. "ISOs or salespeople would rather go with a publicly traded company than a private one. "They believe in the future of public companies. They know that there's not just two owners of the company who could cease their relationship at any time. There are shareholders involved, and it's a real corporate structure."

Acies' headquarters are on Wall Street in the heart of New York City's Financial District. "We think it's a great thing," said Jeffrey A. Tischler, Acies' Chief Financial Officer. "Not only from a business standpoint, as this is still the country's hub for financial services, but we also see it as being symbolic in what we want to represent to our [merchant] customer base and to our family of ISOs."

"We say, 'Ask your competition what they see outside their window,'" Firer said. "They see horses and farms. We see the New York Stock Exchange."

Humble beginnings with grand goals

More than 10 years ago, Miron Guilliadov (who is now Acies' Vice President, Sales) founded Acies' predecessor, GM Merchant Solutions Inc. At that time the company was what Firer called a small time ISO.

"I took over as President in June 2002, and we decided we needed to go to the next level," he said.

"Things really kicked into high gear in 2004," Tischler said.

In June 2004, GM Merchant was renamed Acies Inc. and "went public" through a reverse merger with a parent company that shortly thereafter changed its name to Acies Corp. In Latin, the word "acies" means sharpness: the quality of being sharp, clear and focused.

The company is focused on providing quality service to its customers, and in the past year, has achieved significant growth. Firer and Tischler attribute it to Acies' business model, innovative programs and strategic partnerships.

"From day one we have strived for quality in what we do, in how we service merchants and our ISOs," Tischler said.

"As a public company, we're all sharing in serving the customers, merchants and ISOs and growing the business together. With a scalable business model and a strong foundation, we really believe in our goal of becoming the blue chip company in the industry."

"We focus on brick-and-mortar merchants," Firer said. "They make up the majority of our merchant portfolio. We are focused on retaining our customers and ensuring that there's quality in our portfolio because it ultimately equates to revenue. We're not going after just anybody, [such as] high-risk accounts; we don't need them. We feel that we could make a mark in more stable industries."

For the full fiscal year 2005 (April 1, 2004 to March 31, 2005), Acies reported $3.9 million in revenue. Revenues for that year more than tripled versus the prior year. Year-end merchant account port-folio and gross margin and transaction volumes more than doubled, and the company saw continued, steady growth.

For the first six months of fiscal year 2006 (April 1 to Sept. 30, 2005), Acies reported more than $2.1 million in revenue. In January 2006, Acies announced that total merchant accounts grew 130% in the 12-month period ended Dec. 31, 2005. For the first nine months of fiscal 2006, total merchant accounts grew 94%. The company noted that merchant account growth was generated organically, and was effected with no significant additions to its infrastructure or overhead.

A contactless program and other incentives

In 2005, Acies launched a number of new initiatives for its ISO and MLS partners. One of these is a contactless card payment solution; the other is a merchant incentive program called Pay to Upgrade.

Working with several key strategic partners, including MasterCard International, VeriFone and ViVOtech, Acies was one of the first third party payment processors to make contactless payments available in the New York City area. And because more banks are now issuing the cards in more markets, Acies has been able to expand its offering to 30 more major metropolitan areas nationwide.

Contactless technology is ideal for use at merchant locations where checkout speed is essential, such as at quick service restaurants (QSR), gas stations and movie theaters. Consumers are issued credit or debit cards embedded with radio frequency identification chips. Rather than swiping their cards, they simply tap or wave them near terminals specially equipped for contactless transactions.

"We believe contactless is the future, and any merchant in the QSR or small-ticket arena should sign up for contactless because the cards are being dropped rapidly, and it's a great benefit for the merchant," Firer said. "We want to recruit and train ISOs to go out there and install contactless devices. We are subsidizing 100% of the device for the merchant. We're pretty much giving away a [VeriFone Omni 3750] with a contactless reader for the merchant."

Benefits for ISOs and MLSs selling contactless include: placing state of the art equipment with the merchant for no charge, improving merchant retention, expanding into new channels, and differentiating themselves from the competition. "At this point, the competition is still very small," Firer said. "Very few payment processors in the United States are able to accept contactless payments, and we're one of them."

Acies organizes its ISO and MLS offerings into two options. The first includes all of Acies' promotional merchant programs, such as contactless and Pay to Upgrade. The latter allows MLSs to offer merchants up to $1,000 (or up to 1% of their first month's processing) to work with Acies.

"There are minimums in terms of [merchants'] annual volumes," Tischler said. "If they meet those minimums, we think it is a great item for ISOs to offer right into the merchant's pocket. It's not merely an incentive for ISOs to sell, but it's an incentive for the merchant to buy."

The second option is a revenue sharing model with payouts of up to 85% based on volume. Acies compensates its partners by offering a true interchange split; a commission structure of 100% of all equipment lease income; monthly bonuses and sales contests; and residual income opportunities of 50% - 85%.

To track and manage all these programs, Acies offers its ISOs and MLSs Sales Central, a Web-based single point of contact for all sales support functions ( www.mysalescentral.com). Sales Central provides real time access to information. It is intended to help all sized organizations, from large multisite, multidepartment ISOs down to smaller ISOs and MLSs, to better serve their customers by delivering products and services more quickly.

The software enables users to immediately calculate and present cost-savings benefits to potential merchants during sales calls. Salespeople can track their commissions and get marketing support from the company. It also eliminates much of the required administrative paperwork.

"It's a self-service portal where they don't have to call our office constantly to get answers," Firer said. "Everything is at their fingertips. They can manage their day-to-day business and receive real time status progress on their merchant applications from the time they submit them to their deployment. Customer service is critical for ISOs, and Sales Central significantly enhances an ISO's ability to plan and track work as well as provide information to their customers in a timely manner."

To back up all its programs (from contactless, Pay to Upgrade, and even the Sales Central product) and deliver on its goal of providing quality service to ISOs, MLSs and merchant customers, Acies has a toll-free POS help desk available 24 hours a day, every day of the year, and a dedicated client services team.

"We're not looking for the fast buck, we're not looking for short-term relationships, with either our ISOs or merchants," Tischler said. "We're trying to build something for the long-term. Once a merchant signs on with us, we believe that the quality of the service that we provide ... will keep them with us for the long haul."