rabbi walks into a store ... No, this is not the beginning of a bad joke. It's what happens when Sam Chanin, Chief Executive Officer of New York-based Business Payment Systems (BPS), is hard at work. Chanin is a rabbi at heart, if not by vocation.

"I would be a really good rabbi; I just didn't follow that love," he said. Before he founded BPS, Chanin taught students, thousands of them, about Judaism. And if that doesn't sound difficult enough, they were teenagers. If you can face a room of teenagers, you can face just about any crowd.

Chanin fondly recalled conducting seminars on Judaism or rabbinical teachings for groups as large as 500 people. The experience helped him identify his skill in educating others, which he puts to use in his business daily.

It also helped him understand the importance of building a solid foundation and investing in the future. "My religious studies gave me a real belief in people and myself," he said. "Letting people know I believe in their abilities has been a real positive for me."

From telemarketer to CEO

While Chanin pursued religious studies, he supported himself through a variety of positions in financial services, including telemarketer and sales agent.

While working as a telemarketer for an agent of an ISO early in his career, he overheard a conversation between the company owner and a sales representative. He learned that for each completed transaction, the sales rep would receive only pennies.

"I could not sleep that night and decided that if I were going to make calls, it would be for me," he said. "I also found out during the same conversation that the $5 I was paid for each lead generally led to an equipment sale of $500 in profit. I was sold."

After mastering the business from the bottom up at a number of ISOs, Chanin opened his own shop six years ago. Since then, BPS has become a major force in the merchant services industry with more than 1,400 agents and a merchant portfolio of 20,000. It serves regional and middle-market merchants throughout the United States.

A lifelong investment

Chanin emphasized investing in the future and building a solid, trusted business. He plans to stay at the helm of BPS for a very long time. He likened the payment processing industry to the real estate industry.

"Real estate is very similar to our business right now; [it] creates a receivable where you collect rent, and at any point you can sell the building." But Chanin is not erecting any "for sale" signs. "I am not here to build and sell," he said. "I am here to stay, like First Data or Bank of America."

Chanin continued the analogy to illuminate his long-term vision. He explained that if someone is building a house simply to resell it for a quick profit, he may use inexpensive materials or cheap labor because he doesn't have a personal stake in the property. "If you are going to live in the house, you will invest more," he said. "We live in our house. Our friends are here. We hope our kids will work here."

Chanin's personal stake in his company and his employees is evident in the way he conducts business each day. For example, he hires people he knows and trusts, and who share his abiding, personal commitment to the company.

He has 11 siblings and, as such, is never short of family and friends to recruit. His older brother is in charge of the company business in Brooklyn, and another brother heads BPS' telemarketing arm in Israel.

"Every friend and former classmate who is business savvy is working for me," he said. "Additionally, when we started BPS, we realized the need to have a bilingual staff. The same family/friend relationships developed [with our staff as well]. We have several sets of siblings and cousins working together and will continue to encourage our employees to recommend friends and family."

Chanin also uses BPS to help at-risk teens make positive changes through a program the company devised that trains them to work in BPS' offices. "We've put 30 kids through the program, and we have 10 kids in the office now," he said. "It's a place where they can get paid to be part of something. If they learn the business and are good, we will keep them on staff." The youths are between 18 and 20 years old, and companies such as Northern Leasing Systems Inc. and Calpian have been generous supporters of this socially responsible program.

Chanin is most proud of building BPS into one of the largest ISOs in the industry. "Our growth has been built one merchant at a time," he said. But he's not ready to rest on his laurels. "I hope to have Business Payment Systems evolve into some quasi-type of bank structure, providing full-service loan products to merchants."

BPS is already involved in a venture in which it provides merchant loans based on future credit card receivables. "We are thousands and thousands of dollars into [the loan program]" he said. "We have an awesome agent program [which allows agents who sell the program to earn revenue from it]." This new venture only motivates him more. "The evolving of the credit card business into other value-added businesses keeps my mind very active."

Recruiting quality agents

Chanin is well aware that the financial services industry is not perfect. One especially problematic area is the recruitment and retention of quality sales agents. Most agents rely on equipment sales for income while their residual nest egg is developing.

He believes the prevalence of ISOs and processors that provide merchants with free terminals is detrimental to new agent recruitment. He thinks these programs, which are an effort to grab market share, have hurt the industry. "What these ISOs and processors don't understand is they are preventing new blood from looking at this as a career or a business opportunity," he said.

Even so, Chanin is hopeful. "It is getting tough, but there's still enough money out there," he said. "The average account produces residual income of $50 to $100 a month, so there is money; it's just a matter of sharing." But, he quickly pointed out that when both ISOs and the processors want to earn the $100, there is little left to entice quality sales agents to join the equation.

Chanin is frank about the rigors and sacrifices of sales agents, and he doesn't candy-coat the facts. "Anyone who thinks he or she will get rich quick is making a mistake," he said. "We hire an average of three people a day; 20% survive, and 20% of those actually are successful." Chanin noted that it is extremely hard for new sales agents to develop their careers unless they have a cash reserve to meet their living expenses while they build their client base. He suggested that organizations be open to allowing agents to draw against their commissions.

Even with the challenges potential sales agents face, Chanin and BPS have identified two groups that are well suited for such a career.

"We have a lot of success with two types of salespeople: the very young, such as those still living at home, and people who already have a job, such as an insurance salesperson," he said. "For them, this becomes a referral program. Just to get someone off the street and tell him he can live on these earnings alone is not going to work."

Solutions for an optimal future

If he could change one thing about our industry, Chanin would alter the interchange structure, perhaps simply having one rate for keyed entries and another for swiped entries. "I would simplify the pricing mechanism, because it is so sophisticated and no one knows if they are getting paid accurately," he said. "It's a massive headache for me and many of my agents."

Even with the industry's shortcomings, Chanin is optimistic about the future of his company, and the industry as a whole. "Our country's population continues to expand, which is an opportunity for continued business growth," he said.

Specifically, Chanin identifies pay-at-the-table solutions, Internet protocol-enabled POS solutions and the continued expansion of the Internet as areas for opportunity. "I am very optimistic about the short and long term [prospects] for my company." BPS is currently on the lookout for a workable pay-at-the-table solution for the restaurant industry. "We talk to merchants daily," he said. "When the right solution comes along to integrate with restaurant software in use today, we will implement it."

Chanin is motivated by his play-to-win attitude, as well as the energy and excitement he finds in each new day. "I love this business and could not see myself doing anything else," he said. "The challenge of dealing with sales agents, in-house staff, vendors and processors is very exciting."

This entrepreneur, teacher, investor and visionary will be part of the financial services industry for many years to come.