Raising The SMB’s Payments IQ

As Amazon and Alibaba and eBay get bigger, it’s often tempting to assume that SMBs don’t stand a chance at competing. Meritus has a different point of view that starts with raising the “payments intelligence” of SMBs and a suite of tools that level the eCommerce playing field. In a recent podcast, their co-Founder, Alan Kleinman, talked about how gaining more IQ points in payments is making for a smarter and more profitable SMB online business.

Small businesses face a number of challenges. With respect to payments and commerce, what in particular are they most concerned about and how do you help them address these challenges?

AK: We believe that these challenges fall into three different areas.

One is just overall payment intelligence –how SMBs can maximize their payment processing capabilities, which includes optimizing interchange rates and more.

Second, we look at the challenges from an operational efficiency perspective. In other words, how do SMBs operate today and how can they be as operationally efficient as possible?

Lastly, and I think most importantly, is increasing revenue. At the end of the day, most small to mid-size businesses see this as their top priority. One method is to decrease shopping cart abandonment, which is about supporting multiple payments methods and options, like subscription payments.

What are you hearing from these businesses in mobile payments and mobile commerce? What is Meritus’ mobile roadmap?

AK: We believe that mobile is here to stay. It’s growing at a fast rate, but there’s still a small dollar amount that’s being processed via mobile. I think there’s a lot of hype and discussion of the mobile phone and dongle, and there are a couple of players out there that compete in that space. We really focus on mobile as a peripheral, as a different form of processing a payment, whether it’s in the card-present, internet, or mobile device world. That’s where we see opportunities, and we already see the adoption of mobile just by the methods of transactions being communicated to us. But we are still in the early stages of mobile adoption.

There are lots of players in this space who also target small and mid-size businesses. Is there a particular segment that you target? What makes Meritus unique?

AK: What makes us unique and has enabled us to be extremely successful over the last few years is that we’ve defined a strategy and executed on it. We are trying to level the playing field between these SMB merchants, particularly those in ecommerce, and the large enterprise guys. We have noticed that many in our client base don’t have the products or services, let alone the resources, and human and financial capital, to compete. So we’ve built a proprietary solution called Payment XP – a platform to allow our clients to easily integrate into us and process any form of payment from a single point of entry. Our goal is to have our clients only worry about their businesses while we worry about the payments end. And we’re doing this in a processing environment that’s safe, secure and easy.

For example, tokenization and data security are both very important – we have provided different ways to token and encrypt card methods to assure secure transactions. We’ve also built an API to make it easy for our client base to integrate into Payment XP. Also, we board our merchants quickly and allow them to grow very fast. Our credit and risk teams provide us with an advantage versus our competitors, and we are so accustomed to the SMB card-not-present world that we can quickly allow these SMBs to grow. In addition, we have many products that tie into Payment XP, which include our chargeback management system, reporting engines, and other things that help our clients improve their operations.

PYMNTS.com is about what’s next in payments. Can you talk to us about any upcoming product releases or news?

AK: In our space, we believe that no product is ever finished. We continue to invest in product technology – that’s really one of our competitive advantages. We believe that the only way we can stay at the forefront is by continuing to invest in our infrastructure, our product platform, and more.

We have many products that we’re releasing this upcoming year. Some of them include what we call Update XP, which is an add-on product to our recurring billing manager, helping our clients increase revenue. We’re also releasing a new API later on, as well as enhancements on our mobile capabilities. Lastly, we’re continuing to increase our reach around the world through multiple currencies and jurisdictions.

Lastly, tell us about how you think the payments landscape will evolve in 2015?

AK: As we’ve seen over the last 6-12 months, the industry is dynamic and exciting. When we see change, we see opportunity. There have been a number of things that will change and continue to change – one is the continuous consolidation of the marketplace. We’re seeing that in the integrated partner space and the card-not-present ecommerce space. For us, these acquisitions enable us to remain agile and nimble, and execute and exceed our customers’ expectations.

Meritus Payment Solutions started in 2008, with a vision to deliver to small and mid-size business world, particularly in the card-not-present space, payment solutions that really improve their productivity and profitability.

Alan Kleinman
Principal and Co-Founder, Meritus

Oversees sales, marketing, IT, product development, and corporate administration.

Previously Sr. VP / CFO / COO of National Merchant Center, a full service ISO. During his tenure, the company’s annual processing volume increased from $150MM to over $1 billion.

Prior to joining National Merchant Center, Alan was a venture capitalist at Pacific Venture Group, a $210 million healthcare venture fund, and was involved in the investment and management of a number of successful companies including Symbion, Visicu, Phaseforward, Zonelabs, Vivant Medical, LifeMasters, and Long Term Care Group. Prior to Pacific Venture Group, Alan was an analyst at Gateway Partners, a merchant bank that focused on consolidating niche industries. Alan is currently Chairman of the UCLA Alumni Venture Capital/Private Equity Group and is a Board Member of the UCLA Anderson School of Management. He earned his M.B.A. from UCLA Anderson School of Management and earned BS and BA in Biochemistry and Economics from UCSD.

Listen to the full podcast here.