Capital Payments, LLC Acquires Applied Merchant Systems, Inc.

Capital Payments announced today that it has acquired both Applied Merchant Systems and PayQuake (combined: “AMS”) from its founders and shareholders. Based in Chicago, IL. AMS is an electronic payments services company specializing in credit card and check processing, and other payment related services for small and medium-sized businesses, corporate merchants, ecommerce merchants, and trade associations.

Headquartered in Melville, NY, Capital Payments, LLC has built a unique distribution model working with Trusted Advisors such as CPAs and Attorneys. Capital Payments was founded by industry veterans who understand the challenges faced by businesses and bring decades of experience in delivering leading-edge payment processing solutions and financial services to serve the ever evolving needs of U.S. based businesses.

The acquisition of AMS supports Capital Payments ‟core strategy to grow through both strategic acquisition and strong organic growth. AMS services over 12,000 merchants throughout the United States and will extend Capital Payments‟ platform as the leading national provider of payment solutions to the Trusted Advisor community and their small business clients who rely on their advisory services.

“We are excited to add AMS and PayQuake to the Capital Payments ‟ family”, states Todd S. Whiton, President and CEO of Capital Payments. “The AMS business has been built by partnering its considerable technology resources, including a comprehensive end-to-end merchant boarding and reporting system, with industry specific client and practice management software developers, offering their clients a robust and fully integrated payment solution. AMS‟ management team and its employees fully share our superior service philosophy and we look forward to continuing our strong and profitable growth as a combined company”.

“I am looking forward to working closely with the Capital Payments management team in a continued advisory role in taking the business to the next level,” states Darrin Ginsberg, former CEO and one of the founders of AMS. “Our combined experiences along with our sales and marketing techniques and “trusted advisor” focus will serve to position us very favorably in the marketplace.”

Capital Payments will maintain AMS‟ operations and sales offices in Chicago and will remain headquartered in Melville, New York. Mr. Ginsberg will be maintaining a leadership role at Capital Payments.

About Capital Payments, LLC
Capital Payments is a leading provider of merchant and electronic payment solutions. The company is uniquely focused on working with trusted advisors to help them navigate their business clients through the increasingly complex world of electronic payments. The company provides transparent and competitive pricing, very fair terms and conditions, and best of breed payment products and services to its merchants.

Capital Payments is led by industry veterans with decades of experience in working with small and midsize businesses and their CPAs, Accountants, Attorneys, and other trusted advisors. For more information, please visit www.capitalpayments.com.

About AMS
Applied Merchant Systems provides electronic payment products, services, and consulting to businesses of all shapes and sizes across the nation. The company specializes in tailored credit card processing solutions that maximize efficiency, security, and cost savings for the merchant. Founded in 1996 and headquartered in Chicago, Applied Merchant Systems is a recognized leader in the payments industry and facilitates over $1B of electronic transactions annually for its rapidly growing portfolio of merchants. For more information, please visit www.appliedmerchant.com.

The Expanded Role of the CPA

A life-line -- that is what most businesses are looking for nowadays. Someone or something that can help them successfully navigate the rough waters of the current economic climate. For most businesses, salvation is sitting right in front of them – in the person of their CPA.

One of the most deeply entrenched business relationship models is that between a CPA and his client. Over the years, the role of the CPA has expanded well beyond the conventional model of handling clients’ books and records into that of ‘trusted advisor’ in all facets of a client’s organization. With many businesses today in survival mode, we find an even further expansion of the role of CPA -- creating a new environment complete with both challenges, and rewards, for those in the CPA community.

“Clients are asking for more service and demanding more precise information,” notes Steven Sundack, CPA, Commack, New York. “They want you to take a look at their overhead. They want to know if they’re charging the right rates to their customers. They want you to tell them point-blank how they’re doing, if they can make it, or not. It’s important to know your clients to help them.” Steven first opened the doors of his practice in 1979, and now with a client base of more than 300, has seen a new-found significance of the full service model in the CPA community. Embracing the expanded service model not only benefits your clients, but can protect your practice as well. “With so many businesses closing,” Steven notes, “we don’t want to lose 10-20% of our clients. We need to be as proactive and creative as possible to add value and keep our clients going.”

Meeting heightened service demands entails not only taking a closer look at your client’s business operations, but advising a specific course of action. This may mean the following steps:

1. Lowering their operational costs. (ex. researching competition to counsel on service rates)
2. Advocating for their business. (ex. successfully renegotiating a lease with the landlord)
3. Using your role as a financial advisor with institutions (ex. working directly with a client’s bank to reinstitute a credit line)
4. Becoming a strategic extension of their management team (ex. recommending personnel cutbacks, implementing a marketing plan)

Steven advises his clients to watch and conserve their cash, don’t take on too much debt and don’t commit too far. “Clients need to put themselves first in their business. At the end of the week, they must be able to take home a paycheck.”

Taking to heart his full-service role, Steven’s practice has expanded to offer insurance and payroll services to his clients. “If I can save a client $25,000 in insurance expense, for some, that’s the equivalent of writing $250,000 worth of business.” Steven recommends, “If you don’t offer these types of services, it’s important to partner with other associates who can help you.” Joining a network group is a good source of potential partners, as well as referrals.

In considering how to handle compensation for the extra services provided, it’s important to remember that now is not the time to start giving extra bills. “Everything is looked at. Things that weren’t questioned before are now being questioned,” notes Steven. Also, many clients are also asking for a reduction in fees. “For some, I do give a temporary reduction because we really are all in this together. We have to bend like everyone else.”

Steven is confident he and other like-minded CPAs can reap benefits from this new call to service by their clients. “I’m providing service all day – that’s how my business has grown.” The extra hard work and concessions pay off by helping clients survive, and thrive, in this economy. Steven confidently notes, “If my client grows, I grow.”

There is no doubt that strong relationships with customers are key to retaining and growing business. Especially in today’s economy, solid client relationships are not sustained by product or price alone; they must consistently be nourished with exceptional service. Most would agree, bringing this ‘full-service’ relationship model to fruition can stave off attrition and be a harbinger for success for both you and your clients, even in the toughest economies.

Best Practices for B2B and G2B Merchant Services Transactions

Patricia Keller, CFO, Capital Payments, LLC

I won’t go so far as to say I was dragged kicking and screaming into the world of blogging because that would perhaps be a slight exaggeration. Suffice it to say that, as a true numbers person, blogging is not something I would normally do. A CFO “out of water,” so to speak, in the world of verbiage. That said, because I feel strongly about raising awareness on business-to-business and government-to-business merchant services best practices, blogging turns out to be the perfect venue.

Credit card acceptance in both the B2B and G2B market segments continues to increase annually. Today, more businesses are adopting B2B cards to reduce administrative expenses and identify opportunities for savings. Many are making B2B card acceptance a requirement to do business. Simultaneously, government contracts are aplenty and procurement policies often specify G2B acceptance as a requirement. So what does this mean for you as a merchant?

No one can deny the obvious -- that acceptance of B2B and G2B cards allows a business to generate more revenue through multiple sales channels. But, while less obvious, no one can deny, too, the opportunity to effect significant cost savings by taking advantage of the lower interchange (processing) rates these cards can afford. To qualify for the lower rates, a little education goes a long way.

As a result of the growing B2B and G2B segment, MasterCard and Visa have implemented specific rate-sensitive requirements to which card acceptors must adhere to qualify for the lower processing rates. B2B and G2B transactions are Level 2 and Level 3 (versus Level 1 consumer transactions) and have the largest interchange rate spread. With a standard merchant account, Level 2 and 3 transactions will automatically downgrade, increasing the costs of processing the cards – costing you money. You won’t even know it’s happening…until you get your merchant statement.

Level 2 and 3 transactions require a specific method of processing to qualify for the lowest rates. For Level 2, most standard terminals and payment gateways can be used. Level 3 requires special software in conjunction with a Level 3 processing service. Level 3 transactions provide specific information such as item description, quantity, unit-of-measure, price and sales tax information, combined with detailed merchant and cardholder information. The bottom line? The more information you collect at the time of purchase, the lower your processing rate will be. Qualifying for the “gold standard” of Level 3 processing rates for B2B and G2B cards reduces processing expense overall. Savings can be significant. And Level 3 capability will increase your competitiveness. Your costs can, in fact, be less than your competitors.

If your business is trending to the growing B2B and G2B market segments, now may be the right time to reevaluate your current merchant processing provider to take a look at what you’re gaining – and potentially losing – with your current program. It’s a given -- no one knows your business better than you do. But, at the same time, it’s imperative to work with a merchant services provider who is proactive – who knows your industry and will take the time to advise you what best meets your needs – to secure the lowest rates possible.

With more than 18 years in the industry, I can stand tall and admit interchange rates are my passion. Remember, I’m a numbers person. I’d be more than happy to speak with you about how you can realize significant savings with B2B and G2B card acceptance.

Businesses Can Get Significant Relief on Operational Costs

Todd S. Whiton, CEO, Capital Payments, LLC

The past few months have been a difficult time for many businesses trying to navigate the turbulent waters of today’s economy. Being proactive in reducing operational costs to dramatically increase cash flow has been a key initiative to survive. Simply stated, more cash flow translates into more time to concentrate on one’s core business; more time to focus on marketing, strategic planning and client needs.

It is absolutely critical to maintain a healthy cash flow by securing revenue as efficiently and quickly as possible. By now, most businesses realize credit and debit card acceptance is a major component of good cash management in today’s economic environment. However, it’s also important to realize that not all merchant services providers are created equal. At the risk of sounding cliché, “caveat emptor” can easily be applied to the merchant services business. In “Dirty Little Secrets of Merchant Services,” a whitepaper I wrote in 2007, I talk about the elements of deliberate obfuscation, a ‘hit and run’ sales mentality and the fine print terms and conditions that separate one merchant processor from another.

Capital Payments typically saves businesses 10-40% of merchant processing costs. Many businesses don’t realize that 70% of credit card processing costs are variable – and, therefore, manageable. Unraveling the complexity of payment processing costs in terms of interchange optimization is one of the founding principles of Capital Payments. As an example, through an analysis of their businesses’ current credit card processing situation, one of our CPA partners was able to present two of their B2B clients a combined percentage savings of over 25% -- equating to $42,000 annually. Money saved and quickly put back into managing their businesses. Another partner saved 26% in operation costs, and was afforded a cumulative merchant services savings of 11% on five retail businesses he owned.

There’s no denying that in today’s economy, it’s prudent for businesses to re-evaluate their payment card processor – to take a closer look at what they are gaining, and potentially losing, with the status quo. If a business is with the right merchant processor, there’s money out there to be saved.

Introduction to Capital Payments’ Blog

There’s no denying blogging is a major social, political and economic phenomenon. According to Blog Pulse , there are more than 105 million blogs on the internet as we speak, with a new blog coming to life every two seconds. With numbers like that, how can we deny our participation in this vast pool of knowledge? So, we decided to start a blog of our own. One that will explore current merchant services and credit card issues and events to educate, inform and, maybe, from time-to-time, even entertain. Our blogging qualifications? An eclectic group of industry veterans with decades of credit card processing experience in working with small and midsize businesses and their banking entities, CPAs, accountants, attorneys and other trusted advisors.

Capital Payments, LLC is a leading provider of merchant and electronic payments solutions. We’re uniquely focused on working with the trusted advisor community to help them navigate their business clients through the increasingly complex world of merchant services. For all of our merchant accounts, we provide transparent and competitive pricing, very fair terms and conditions and best of breed payment products and services. We offer a full range of electronic point-of-sale and online payment solutions and deliver a fully comprehensive suite of leading edge credit card processing payment products and services that address the needs of businesses in all industries.

Some of the names you might see? Todd Whiton, President, CEO and co-founder, an energetic, results-oriented visionary (yes, it’s true) who is responsible for driving our success. Pat Keller, CFO and co-founder, is our numbers guru who can realize credit card processing cost savings for our clients at a glance. Craig Stokum , CPA, Senior VP – Business Development. Craig is a highly effective speaker whose innate sales ability makes him a formidable presence in the merchant services industry. Natalie Silva, VP – Marketing and Program Management, is our marketing maven who delivers our message with unsurpassed energy, enthusiasm and product knowledge . We couldn’t do it better with a Times Square billboard. Christine Curzio, VP – Operations and Systems, embodies the perfect blend of people skills and technical expertise to effectively support our customers.

So, there you have it. Capital Payments abridged. Research shows a 96-second blog reader attention span; we didn’t want to overstay our welcome the first time out.