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by Phil Britt       

   IT IS IMPERATIVE THAT AN ISO DECIPHER WHICH PRODUCTS ARE A GOOD VALUE versus those that are more hype than substance. There are several issues to consider when choosing which option is best to offer to merchants. ISOs need to locate a vendor whose device boasts technology, ease-of-operation and the ability to customize programs for various markets. ISOs can also benefit from obtaining more information from the hardware provider. What has the company's history been in terms of technology? Do their late-model hardware or software systems still communicate with older systems, or has the technology been modified so that older systems are no longer compatible? Looking at a company's history can provide you with a good indication as to the company's philosophy.
   "When an ISO selects a technology company to represent, he needs to carefully look at the history and the added value he will be able to bring to his clients," stated Zenou.
   Outstanding customer service is not possible without proficient personnel and a solid product line. Zenou recommends questioning companies regarding the size of their customer support staff, how they define "ISO support" and if they have an ISO support department. Also ask if the company has a personal representative and if this representative be readily available? Are company executives available via phone and will they return calls? What is the average turn-around for return calls? Will the company provide employees to travel to and train your staff? If so, what is their flexibility to work within your schedule?
   "Companies need to be customer support driven," Zenou said. "The hardware/technology provider needs to be very consistent and must deliver what was promised and never rest on its laurels," Zenou added.
   In reviewing potential companies, also look for those who lead the field in developing new technologies. Technology is driven by a customer's demand and, although many companies have great theories and wonderful technologies, they do not meet the market's needs. Advances in technology must be logical and facilitate an ISO's training and selling processes. Vendors must remember that they shouldn't demand cooperation from an ISO; rather, they should work with what the ISO is requesting to produce a mutual solution.
   "If an ISO wants to sell something, he's going to sell it," Zenou said. "If an ISO can't understand or afford a product, he will never be able to sell it." It is the manufacturer's lifeblood to provide products that are tangible, perform better and contain new features that are understandable, without becoming dissimilar to the previous version of a product. "The migration from product to product and from platform to platform, should be carefully controlled," Zenou suggested.
   "A hardware provider should provide a platform for the products," Zenou said. "The products should be as close to compatible as possible to eliminate overhead and back-end costs. Every time I have to re-learn something, I have to train hundreds of customer service reps to support it - a very costly procedure." Hardware manufacturers should also attempt new concepts. Assuming the product retains compatibility with past products, the ISO will receive added value and opportunities for new revenue streams. Addition-ally, the software should provide as many revenue-generating programs as possible. However, it's important to balance this robust performance with simplicity. You don't want to overwhelm or confuse the merchant with the technology's capabilities. The user interface needs to be simple, though the internal technology may be quite complex. "The ISO works very hard and spends a lot of money in marketing, paying commissions and on overhead to obtain a merchant," Zenou said. "The manufacturer's job is to ensure retention of these merchants and to make sure that any attrition is not due to the performance of the hardware or the software."
   "The ISO's optimum goal is to locate a company that provides applications that assist and connect the merchant to the ISO, programs that give them the best selling ratio, the least amount of service calls and the highest revenues," Zenou explained.
   Some merchants complain that there are too many terminal choices and too many terminals to support. But, there is currently no definitive device that supports everything - it doesn't exist. "The most favorable solution the industry can request of a ISO or financial institution, is for a hardware platform that is supported in the same manner as various applications and terminals," Zenou said.
   "The bottom line is to look at the technology provider's financial statements, including growth rate and net income. If the technology provider is consistently making money, it is most likely providing the appropriate products and support services," Zenou explained.

About Mony Zenou

   During his years as a high-ranking officer in the Special Forces Division of the Israeli Defense Force, Mony Zenou never imagined that he would be president and CEO of a U.S. POS/EDC hardware provider. After leaving the service in the late 1980s, Mony initiated his studies at the Hebrew University in Jerusalem, where he earned a Bachelor of the Arts Degree in International Relations and Political Science. Mony came to the U.S. with a new invention and great aspirations for its success. The "Boomerang" was a postcard-sized mailer that one could open, turn over, reseal and re-ship to the sender. His invention offered convenience and met market demand; however, a U.S.-based company was the first to file for the patent.
   Not deterred, Mony ventured into the workforce, first as sales representative for a New York-based ISO representing Peachtree, Sioux Falls, SD, then as a regional representative for Citibank. After a short stint with Citibank, Mony operated an ISO program for American Bankcard Center of Northfield, IL.
   Mony first came in contact with the small, Israeli-based company, Lipman Electronic Engineering, when he made them a presentation while working for Citibank. In late 1992, during Mony's return to his country to get married, he was approached regarding the prospect of initiating operations for Lipman Electronic Engineering within the United States. Mony enthusiastically accepted this endeavor and thus began Lipman USA, Inc., housed in newly-married Mr. Zenou's one-bedroom apartment.
   Just eight years later, Mony is the president and CEO of Lipman USA, Inc. - a provider of POS/EDC hardware (landline and wireless point-of-sale terminals, ATMs, cash register systems, etc.) and the software that drives said machines for various market applications (retail, restaurant, direct marketing, etc.). Sales have cumulatively doubled each of the last five years, with Lipman USA sales exceeding over $50 million in the last year alone. Mony confidently expects that figure to again double in 2001.
   Mony credits the company's growth to "maintaining the highest possible customer care and customer service. We always service our own accounts, unlike our main competitors, who also provide the platform for all of the leading hosts such as FDR, Nova, NDC, Paymentech and others." On the contrary, Lipman was recognized as a "class B" company, meaning that hosts certified the platform for transactions, but did not support it directly. "Service" in Lipman's perspective means training and assisting the sales representatives, training the participating help desk employees as well as ISOs and providing innovative technical tools (Remote Diagnostics, PC emulation software, Web-based tutorials, Help Desk Index, etc.).
   The outstanding growth of the company has required Lipman USA to relocate three times since leaving behind the one bedroom apartment of its origins. As Mony has proudly stated, "It is expected that in the next couple of years Lipman USA, Inc. will once again move from our current 30,000-square-foot facility in Syosset, NY, to a larger facility." Not only has Mony experienced growth in the workplace, he currently resides in Great Neck, NY, with his wife Mira and three children Amit, Daniel and Ariel.

Zenou on the Future

   Wireless technology will be perhaps the biggest change ISOs recognize in the next few years, according to Mony Zenou. The technology has matured to the point that it's just as reliable as landline systems. Additionally, costs have continued to come down to the point that a wireless system can be more cost effective than a wired system.
   "It won't be long before virtually all POS devices will have wireless capability," Zenou said. He sees additional wireless-capable devices coming on the market regardless of the progress of "broadband" wireless, which will provide wireless transmissions at speeds much faster than today's wired modems. Faster speeds via broadband will enable the point-of-sale devices to contain even more robust features than they do today.    "I think that the immediate thing we are going to see is more of a wireless spectrum and, in the very near future, more involvement from the dial-up carriers of the world."
   Telecommunications companies are getting involved in the industry because the cellular networks have some excellent synergies. Verizon, AT&T;, etc. will be more interested in data and even more so in the ability to enhance the services to point-of-sale commerce. In the future, devices will enable wireless clients to utilize other robust features, but will be simplistic enough for those who do not need the extra functionality, Zenou predicts. "The future will allow a wide dispersion of capabilities including, enhanced dispatching, messaging and perhaps inventory control," Zenou said. "It is a simple task of the scanning and procuring the payment." Future technology will undoubtedly provide more data collection and increased data analysis.
   The Internet is also strongly expected to influence the products of the future. However, Zenou doesn't think that web-enabled terminals are the most plausible solution. Rather he believes the Internet is a vehicle to be utilized as a processing engine, driving the data.
   "In my opinion, Internet connectivity will not be applicable within the next few years," Zenou added. "The technology will be present, but it's still too early from a cost perspective and also from a merchant training standpoint." Bluetooth, a wireless media that has been tested in Europe is an exception, but Mony doesn't expect large scale penetration in the U.S. for a few years.

Phil Britt is president of S&P; Enterprises, Inc. Mr. Britt is a regular contributor to Transaction World Magazine and has been published in various banking and financial publications.