The Grocery Trader speaks exclusively to Elavon Merchant Services

Elavon is a leading global provider of merchant acquiring services, delivering a robust portfolio of secure and reliable card payment processing solutions to customers in North America, Latin America and Europe. Elavon supplies integrated payment processing to over 1 million merchants worldwide through its relationships with financial institutions, associations, independent Merchant Service Providers and other channel partners.

In the US Elavon is the second largest payment solutions and services provider after First Data in terms of numbers of customers. Measured on volumes processed, Elavon is fourth largest after Bank of America, the largest overall with just over $500 billion of transactions. In Europe Elavon is fifth largest, ranked on numbers of merchants.

While Elavon leverages its global reach, unmatched experience, and powerful network to power solutions worldwide, its local presence enables it to deliver exceptional service tailored to your needs. With Elavon, retailers establish a relationship that is as unique as your business – one that delivers numerous benefits immediately and over time.

Guy Harris, Elavon’s Director of European Business Development, spoke to The Grocery Trader.

The Grocery Trader – Guy, what does your role as Director of European Business Development involve? How much time do you spend here in the UK?

I manage a team of over 200 sales people across our European markets, ensuring we win new customers and grow our business. I’m based in Watford but typically spend half my time abroad, visiting customers and business partners to build relationships.

GT – When was Elavon founded and who owns it now?

Elavon was founded in the US in 1991 as NOVA Information Systems, and is a wholly owned subsidiary of U.S. Bank Corp, which is now the fifth largest commercial bank in the US, with $311 billion in assets and 60,000 employees, and rated one of the safest banks in the world by Euromoney Magazine. Separately in 2000 euroConnex was founded as a joint venture with Bank of Ireland, and the following year euroConnex entered Europe and then became part of U.S. Bank. In 2004 the company bought out BoI’s shares in euroConnex and began to expand rapidly through acquisitions in UK, Poland and Norway, entering Spain through an alliance with Santander. In 2008 work on a new, single processing platform for Europe was completed and the global Elavon brand was launched.

GT – How does Elavon Merchant Services fit into the U.S. Bank Corp structure?

The bottom line is, Elavon is owned by U.S. Bank Corp but works as a standalone organisation. Elavon as a brand and company was formed in 2008, and from a market perspective everyone then became aware of us as a new organisation but at the same time part of a long established business, U.S. Bank Corp.

GT – How big is Elavon now in turnover?

In 2010 total company revenue was $1,277.3 million, $11.3m above plan and $89.9m more than 2009, and it had $550.2 million pre-tax income.

GT – Which countries do you operate in?

Elavon currently provides end-to-end payment processing services to merchants and financial institutions in the United States, Puerto Rico, Mexico, Brazil, Canada, UK, Norway, Poland, Germany, Spain and Belgium and Italy.

GT – How big is Elavon in terms of employees?

We have 3,500 employees worldwide, of which 900 or so are in Europe. Some 470 of these are in the UK and Ireland.

GT – In non-technical terms, what does merchant acquiring services mean?

‘Merchant acquiring services’ means just that – ‘acquiring’ card payment transactions from the merchants concerned after they have completed the sale of goods or services to the consumer or customer, which have been paid for by card. We take those payments and complete the processing.

GT – What distinguishes you from the other merchant acquirers here in Europe?

Our USPs are our vertical market focus, our knowledgeable staff and our positive attitude to delivering the best possible services to every one of our customers, no matter their size. Also, we generate significant volumes of business throughout Europe, whereas, unlike us, the biggest three or four merchant acquirers get the bulk of their volume in their respective domestic markets.

GT – What characterises the UK as an environment for merchant acquiring services?

The UK payment market is a mature one, and the annual growth of credit and debit card transactions is relatively small. There are millions of people using cards and millions of merchants accepting them, but there are still opportunities for new business, and we are competing successfully and winning increasing numbers of customers.

GT – What share of your European business does the UK represent?

The UK represents approximately 20% of our European turnover. We currently have 6 or 7% market share of this very large market.

GT – Where do you stand alongside Visa, Mastercard and so on?

We are not competitive with them. They, along with Amex and Diners, are called Card Associations, and they make the rules for the card market. The banks or issuers are the organisations that issue credit/debit cards to  members of the public. Cardholders use their cards at various outlets in person or online, and somehow the money we pay on our cards has to get from our bank account to the merchant. ‘Acquirers’ make that happen. In the process we collect the ‘fee’ that the merchant has to pay for the service and pay the other organisations involved their part of that fee. The Card Association receives something called ‘Assessment,’ the issuing bank receives ‘Interchange,’ and we take our fee for making this happen.

GT – How much do you charge your customers for your services, and how do you take payment? Is it per transaction and/or based on turnover?

There’s no simple answer: we tailor solutions to customer needs and charge for that based on a number of metrics and volumes.

GT – Sorry if this sounds cheeky, but as a consumer why haven’t I heard of Elavon before?

It’s a good question! Customers are beginning to hear more and more of us. We rebranded the business as Elavon Merchant Services just three years ago, and have been in the market in our present form for this brief length of time. Elavon is currently the fastest growing merchant acquirer in Europe, through our expanding network of channel partners. We are becoming better known in the industry every day, and as we build our market share and customer base we become increasingly more visible.

GT – Can you talk us through the different financial institutions, Merchant Service Providers and other channel partners that you work with?

In the banking sector we have alliances with Bank of Ireland and Santander. We also have relationships with Costco and Bookers, who recommend our merchant services to their customer base. We offer bundled solutions to all these organisations’ customers, providing our merchant services at a special rate. We also work with 60 or 70 independent ‘resellers,’  called Merchant Service Providers. They take our products and sell them on, sometimes bundled with other services and products. These are organisations such as Servebase, Card Processing Solutions, Decimal Factor, Merchant Hub, Retail Merchant Services, FIS Global, Payzone and PCI Processing. We also work with various other strategic partners, including SafePay and Realex Payments.

GT – What payment processing services do you offer?

Our payment products are supported by what we believe to be the most reliable network in the industry and include credit and debit card processing, gift cards, dynamic currency conversion, multi-currency support, and cross-border acquiring. We handle every aspect of the relationship – transaction processing, risk and underwriting, settlement, equipment deployment, chargeback management, reporting and customer service.

GT – Can you talk us through the various services Elavon supplies, which are of specific value to grocery businesses?

We offer fast settlement of funds to the customer, meaning the merchant, as opposed to the cardholding customer. Because our platform is so reliable it is much less likely to go down than others. If the system doesn’t work for whatever reason, the merchant can potentially lose a sale, which is bad news for small businesses but is much less likely to happen with our system. We also help our customers with their industry compliance to Payment Card Industry Data Security Standards, and provide education, support and reminders to help steer them through the annual process.  We have local representatives, and a 24x7x365 customer service hotline.  We want our customers to be able to get on with thinking about their business, their core competencies, and not have to worry about whether the card payments they take will get processed.

GT – How are you set up in terms of account teams and so on to handle UK retail grocery customers?

We have a number of sales and key accounts people targeting key vertical markets. Account team members are specifically knowledgeable about the vertical market they operate in, so that they can offer the best support to their customers. In the SME sector we have relationships with the owner managers; in the large retailers our contacts are with the Head of Treasury or the CFO.

GT – Who are your target customers?

We go right through from stand-alone corner shops to global multiples. We are constantly talking to the major supermarkets and have many customers who are large retailers. That said, we are not just interested in major accounts; some 85% of our customers are small to medium businesses. We address all types of vertical market businesses. If a company provides card payment options, we can supply them with payment processing solutions.

GT – Do you publish customer case studies?

Not yet, but we will be. We have just taken on a new head of European marketing. One of her objectives is to produce case studies. We have a UK retail case study in this spread, Joe Richards Ltd.

GT – How do you compare with the other merchant acquiring services?

The answer varies according to which part of the world you’re in: here in the UK and Europe we offer a single pan-European platform. The typical benefits available to clients who choose to transfer to our payment system include increased efficiencies, cost savings, speedier payments, lower down time, because of exceptionally robust and reliable technology, and 24x7x365 customer service.

Compared with the national players in each domestic market, we stand apart in terms of our product offerings, our ability to secure transactions and deliver payment to customers in the most cost effective fashion, our quality of service, the calibre of our people and the competitiveness of our offering. In a price-sensitive market, we differentiate ourselves through the value we offer to our customers.

GT – What are the benefits for a retailer from having a relationship with Elavon?

We are a large, financially secure institution – in the current uncertain climate it’s good to know you’re dealing with a company that will still be there in a year’s time! Another benefit is our ability to deliver services that allow them to focus on running their business, rather than managing their payments.

GT – If a retailer already has a relationship with one of the other acquirers, why should they change to Elavon?

Elavon is a business that focuses on merchant acquiring, not a bank offering multiple products. We wake every morning and look at solutions and security, and invest in our platform to ensure the customer’s terminals work when they need to do transactions. At a practical level, we work with customers to ensure their system is specifically configured and positioned in their business to ensure performance as close as we can get to 100%.

GT – I can imagine that in other parts of the world payment systems might vary in efficiency and reliability, but in the UK hasn’t payment processing reached a consistent standard by now? How much room is there for improvement?

The payment processing market is changing. Like every other service/product it has to move on. Contactless is coming in as we speak; after this we will see mobile phone/wallets that can be used at contactless readers. Visa and Mastercard have been encouraging the adoption of contactless payments, and the card issuers have been issuing contactless capable cards. The ‘innovator’ merchants have installed contactless readers; now the market is entering the early adoption stage and more and more of the larger chains like McDonalds are starting to install the capability for their customers, it will grow from here as every other product lifecycle does.

GT – What is Elavon’s involvement in contactless payments and mobile?

Contactless is an important area for us. We’re working closely with the payment associations: the maximum contactless transaction in the UK is currently £15, and as part of our capability we want to enable as many merchants as possible to benefit from this opportunity. I’m part of the VISA Steering Committee on contactless: as the technology is increasingly deployed, it’s stable and it’s working, and showing a major increase in transaction volumes. We have also developed prototype systems for mobile payment: the challenge in Europe is agreeing a single mobile payment protocol.

GT – What help can you offer retailers with compliance with PCI DSS?

We support them in two ways – first we help them become PCI DSS compliant, and take them through the process with our service offering. We also offer them insurance so they are covered for any significant incidents with a small monthly payment, which works just like an insurance policy, against hacking or being broken into. PCI’s not simple, and people want to get on with running their business. To enable our customers to achieve PCI assessment, we partner with Trustwave, a large global organisation who are experts in security.

GT – How do your compliance services for PCI DSS and so on compare with those of other merchant acquiring services?

We have led from the front over the last few years, and we believe we are leaders in this area.

GT – Do you offer customers help with their on-line payment security?

Yes, we do. We insist on customers taking on 3D Secure at the start of an online contract with us, and we explain all the benefits to the client. We have experts in card present and not present fraud security, and keep customers up to date with the news about fraud incidents and trends in e-commerce.

GT – Can you tell us about your Electronic Gift Card Plus product and its uses for promotion and loyalty?

Our gift card offering enables customers to have branded cards to offer their customers The card can be used for marketing your business, for example you can add a small amount of value to the card and give them out in your locality, place your cards with a complementary business to drive new customers to your outlet, and use them as a pre-paid card so customers come back to your store to use the card, as a savings card for a Xmas club, or as a loyalty card. It’s not just the major supermarkets or chains that can have a loyalty card.

GT – Presumably like other loyalty card schemes, this involves tokenising customers’ payment details. Have you ‘ironed out’ the security aspects of this product?

There are no security issues, other than losing the card. This is not the same kind of technology: these cards do not hold any customer data. Merchants simply add some value which builds up as a ‘loyalty reward’ to be spent at some later date in the store, for example every time I spend £10 at my local grocers he puts 50p on my ‘loyalty’ card.

GT – Can you talk us through the processes involved in for a prospective customer wishing to avail themselves of your payment processing services?

If the contact has come through direct sales or telesales, once the customer wants a contract, we ensure the right details are in place from a financial perspective, first in terms of the banking process, after which it becomes highly automated. We deliver the terminals and train the customer, and put in place a raft of support structures to help them take payments and manage the system.

GT – How do you work with customers over time as their businesses develop?

We view the business as an ongoing lifecycle, and don’t just sell systems but treat them as long-term customers, with regular updates about the technology, industry issues and new rule changes. We work to expand our support: business is 24/7, 365. Depending on the Service Level Agreement, we can also organise call centres and so on to deliver maximum uptime.

GT – What difference has the recession made to your business? Has there been a downturn in card payments? How have you continued to grow?

Our market strategy is based on growth in different markets. There’s no denying the impact of the recession and the slowdown in growth in card payments here in the UK. The UK has been showing small GDP growth recently, but we’re growing by double digits and winning market share.

GT – Finally, where do you see Elavon growing from here?

We’re a business on a growth platform, expanding in the Americas and Europe, and we plan to continue to do so, either organically – through continued enhancements of our current offerings and by launching new products and services, or by acquisition. Elavon is showing significant growth here in Europe, with more than double digit growth forecast for 2011, and we expect to win more new customers on a regular basis, both corporates and SMEs, and see continued growth in the UK and in Europe in 2012.

Elavon Merchant Services

To make an enquiry call 0845 850 0195

www.elavon.com