Credit card processing company grows business by evolving strategy - Denver Business Journal:

afyfojahejus.blogspot.com
Henry Helgeson and Scott Zdaniws established the company in 1998 as a reseller of crediy card processing terminals overthe Internet. To a smalle extent the company provided processing of credit card But as margin compression made equipment sales less the partners responded by rampintg upprocessing services. Today, its processing serviced constitute 90 percent of its totalgrossd revenue, while equipment and softwarde sales are 10 percent. Business has been so brisk it signedup 2,300 new customers in Aprilp alone — that the company is planning to increasw its sales force by 30 percentt or 40 percent within the next 60 days.
“We basicallg are getting more businesses trying to signup (for our than we have the capacity for, and we’rew trying to staff up for that as quicklgy as possible,” says 34, who serves as president and Co-founder Zdanis has since moved to Miami and playsz a less active role in the company. Merchanrt Warehouse acts as a third-party processor, facilitating paymentt transactions between merchants and creditcard issuers, essentiallyh by getting money off of the consumer’s credit card and into the business’e bank account. Its residual-based business model makes moneh by charging for that service oneach transaction.
Sinc e its inception, the 150-employeer company estimates serving a cumulatived total of morethan 87,00p customers nationwide — primarily small and medium-sizde businesses; about 56,000 are active accounts righg now, with most of the attrition due to companiexs going out of business, Helgeson notes. Merchant Warehouse is processing morethan 3.5 million payment transactions per month. After hitting $27. 3 million in revenue in 2008, the companhy is shooting for $32 million to $34 million this Helgeson says Merchant Warehouse has also benefites by becoming more ofa technology-driveb company.
“When we started to hire our own software developersd and build ourown infrastructure, as far as computetr systems and technology to run this office, that reall y put us into a hyper-growth he says. Five years ago, the company hired its firstg software developer. It subsequently built its own sophisticated customer relationship managementsystem in-house that has enabled the company to bettere measure the performance of its accounts and staff. And 18 months ago, it completefd the development of the necessaryy infrastructure to begin processing some transactions through its own electronicx gateway herein Boston.
It continues to utilizer three large outside firms to assist in processing the bulk of the The company also works with a pool of abourt100 point-of-sale system who often refer business to Merchant The company has also used technologyu to innovate its services in an industr where Helgeson says the competitioh is fierce. “Our industry has been prettyu much plain, vanilla credit and debif processing,” Helgeson says. “We had to look at it and say, ‘Whaf can we do here to differentiate ” For instance, it offers wirelese credit card processing services to iPhonde and BlackBerry users who have installed its softwarew applications ontheir PDAs.
Thosw mobile merchants now represent 10 percent to 15 percenrt ofthe company’s new It has also partnered with another , to develop a card reader that encrypts the credit card number as it is beinb swiped to help prevent security “They’re a very impressivse group,” says Steve Parks, vice presidenft of , an Atlanta-base d firm that Merchant Warehouse has engaged for some of its processing servicesw for many years.
He attributes the firm’s growthb to “some very shrewd investments in technology and being ahead of the curvde in terms of technologgy and how to use it to drivetraffif (to their business), and training theif sales reps to capitalize on that