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Acies Corp. is bringing
revenue enhancement and cost savings to merchants through their innovative payment
14 Wall Street, Suite 1620
New York, NY 10005
Chairman, President and CEO
Jeffrey A. Tischler
Chief Financial Officer
Interview conducted by:
Lynn Fosse, Senior Editor
September 22, 2005
Chairman, President and CEO
With an expansive knowledge of telecommunications, technology, and payment processing, Mr.
Firer currently oversees operations of the company and has led the company since its
inception. Previously, Mr. Firer served as the Chief Operating Officer for Digital
Wireless Universe, a leading B2B distributor of wireless voice and data communications
products and services. Under his leadership, the company developed an automated credit
risk management and wireless procurement system. His work prior to Digital Wireless
Universe involved serving as a Managing Partner of CellCellCell, LLC., a premier online
distributor of wireless products and services; Vice President for SpeedUS Corp (NASDAQ:
SPDE), a holding company that owns an equity interest in diverse businesses as well as a
pioneer of Local Multipoint Distribution System ("LMDS"). Through his past
experience, Mr. Firer is an experienced leader with the knowledge and capabilities to lead
Acies into the future with great expectations. The success he has had in the past includes
experience as a Senior Operations Manager, building presence and generating profitability
in highly competitive markets. He also has proven achievements in new product launch, new
market development and establishing market presence.
Jeffrey A. Tischler
Chief Financial Officer
Mr. Tischler has 27 years of professional experience, much of which was serving in a
financial management capacity within financial services organizations. As Chief Financial
Officer, Mr. Tischler oversees the companys accounting, treasury and investor
relations functions, and he is significantly involved in strategic planning and
acquisitions. Prior to joining Acies, Mr. Tischler was Vice President with Asta Funding,
Inc., a NASDAQ-traded consumer receivables asset management company, where his
responsibilities included involvement in operational and financial functions ranging from
strategic planning to strengthening the companys infrastructure. From 1993 to 2000,
Mr. Tischler was Executive Vice President and Chief Financial Officer of NYSE-traded
LandAmerica Financial Group, Inc., including serving as Executive Vice PresidentChief
Financial and Administrative Officer of LandAmericas acquired predecessors,
Commonwealth Land and Transnation Title Insurance Companies. From 1980 to 1993, Mr.
Tischler was with Reliance Group Holdings, Inc., where he last held the position of Vice
PresidentFinancial Planning & Analysis. A certified public accountant, Mr.
Tischler was a senior accountant with KPMG Peat Marwick from 1978 to 1980.
Acies Corporation is a financial services company that, through its wholly owned
subsidiary, Acies, Inc., specializes in providing payment processing and online banking
services to small, medium, and large-size merchants across the United States. Acies'
payment processing services enable merchants to process Credit, Debit, Electronic Benefit
Transfer (EBT), Check Conversion, and Gift & Loyalty transactions. Acies also offers
traditional and next-generation point-of-sale (POS) terminals, which enable merchants to
utilize Acies' payment processing services. Acies' banking services offer customers
traditional banking services and the ability for customers to apply for an on-line bank
account and pay bills electronically. For more information, visit http://www.aciesinc.com.
CEOCFO: Mr. Firer, what
is your vision and how is it developing?
Mr. Firer: Our vision is to bring cost savings to
merchants within the United States through our payment processing services, including
credit and debit card acceptance for the business community. Further, our vision is to
bring cost-effective solutions to help merchants increase their revenues and productivity
while decreasing the cost of payment acceptance.
CEOCFO: How exactly are you doing that?
Mr. Firer: We are doing it through multiple
distribution channels, with a two-tiered approach. We have a direct sales force based in
the Northeast and a national network of independent sales organizations. We take a
consultative approach with merchants, while we educate them as to the benefits of
utilizing Acies products and services.
CEOCFO: Tell us more about your approach.
Mr. Firer: Before we approach a potential customer, we
will look at the specific business and the industry in which it operates. For example, if
we are consulting with a restaurant, we make sure that we know everything that we need to
know about the restaurant industry, and we offer tailored solutions to the restaurant
owners that will increase their revenues. At the same time, we follow the dollars, from
the point-of-sale (POS) to the settlement and streamline the existing system, which will
ultimately result in savings, including but not limited to credit card processing costs.
Our main differentiator is that we bring innovative, cutting edge technologies and
sensible solutions to the merchants.
CEOCFO: What is it about your solutions that bring cost
savings to the merchant and why is it better than what they are currently using?
Mr. Firer: We pursue cost savings in a number of ways.
For example, for the quick serve restaurant environment we are able to bring an
innovative solution that was developed by Master Card called PayPass, where instead of
swiping your card a customer is now waving their card, similar to the EZ Pass highway toll
technology. In this technology, the card never leaves the consumers hand, thereby
increasing the security and the speed of the transaction.
CEOCFO: Are there particular industries that you are
Mr. Firer: We touch all industries from companies that
are currently accepting credit cards to those that may. However, we do have our top three
industries that we emphasize, which are petroleum, restaurants and supermarkets. They are
Acies largest represented industries, but we do target every industry that can
benefit from our product and service offerings.
CEOCFO: There are thousands and thousands of restaurants; how
exactly do you get your solutions into all of these doors?
Mr. Firer: Our direct and indirect salespeople may
leverage their own networks, to whom they have sold some other business-to-business
services, or they may do canvassing, such as going door-to-door. Other approaches include
telemarketing, with qualifying leads, setting appointments with merchants or utilizing
other resources, such as the Chamber of Commerce, to help them penetrate the marketplace.
CEOCFO: Are most of your customers already using innovative
solutions or is this something that has to be introduced to them?
Mr. Firer: It is a little bit of both. Most of our
customers are already accepting electronic payments, so when we go out there we are not
positioning ourselves as salespeople. As I mentioned earlier, we take more of a
consultative approach, whereby we gain an understanding of the merchants needs,
before we determine the best solution to present.
CEOCFO: Tell us about the competitive landscape for you.
Mr. Firer: There are definitely quite a few competitors
that we have. We are competing with banks and other payment processing service providers.
We believe, however, that we are unique with our consultative approach and
efficient business model. Very few companies are trying to do what we do; most of the
companies are just fighting for better rates or just giving them basic solutions. Acies,
however, goes beyond the basic solutions; we look at the full process from the
point-of-sale (POS), as we consider the best combination of services and products to
arrive at the optimal solution which will enable a merchant to increase revenues. We also
differentiate ourselves in the small- to medium-sized business market, which is generally
underserved by many larger institutions, and represents a market in which we can offer of
the greatest value to our customers.
CFOCFO: Do your contracts tend to be long term?
Mr. Firer: Our merchant agreements are three years,
which are renewable.
CEOCFO: Do you make a proposal to them; how does that work?
Mr. Firer: We develop and walk the merchant through a
tailored, customized proposal that shows them how they can increase their revenue and
productivity. If there is a product purchase involved, we show them how they can get an
immediate return on their investment.
CEOCFO: How do you know that the merchants are listening to
Mr. Tischler: They must be listening to us and
believing in us. It shows up in our financial results, as we have tripled our sales year
over year for our fiscal year ended March 31st over the prior year. We have
continued to grow at a very steady and rapid pace, even beyond the year-end, throughout
the fiscal first quarter and even today.
CEOCFO: Could you explain your revenue model?
Mr. Tischler: Most of our revenue is derived from
services that we offer to our merchants, whereby Acies receives a portion of the amount by
which a merchants volume is discounted on each transaction, based on a complex set
of formulae taking into account the size and type of transaction.
CEOCFO: What do you need to maintain in terms of back office
to support all of this?
Mr. Tischler: We have partnered up with companies such
as JP Morgan Chase (NYSE: JPM) and First Data Corp. (NYSE: FD) to provide certain
outsourced services. We maintain a limited staff here in our New York office to handle
merchant and sales force relationships, quality control, technology, administration and
certain aspects of processing. The model is scalable and capacity may be readily and
CEOCFO: It seems like you are in a good spot, with everything
Mr. Tischler: You are touching on the beauty of our
business model: As we continue to grow, whether it is organically as has been the case
since our inception, or by the acquisition of merchant account portfolios, we will need to
add little if any to our monthly fixed costs or our infrastructure. We have the
foundation in place to handle the current volume, but it is also a very scaleable model.
CEOCFO: Tell us about the current financial position of the
Mr. Tischler: We are in very good shape; weve
done two financings, including one after going public through a reverse merger just about
a year ago. Right now, our working capital continues to fund our organic growth. Acies is
a debt-free company, with a very clean balance sheet and cash flow, which can sustain our
continued organic growth. Should we need to grow in other ways we have no problem
accessing capital markets, and it seems as though people are knocking on our door to offer
us financing. We do not intend to do an equity financing in the very near future, but that
is something that we will consider down the road. Should we need capital between now and
then we have every reason to believe that we could easily access the debt market.
CEOCFO: Are there any features that you would like to add to
your system or new services that would enhance your offering?
Mr. Firer: We are always looking beyond the horizon for
new products and solutions, but we will only offer what we feel will help our customers
increase their revenues and/or their productivity. For example, we have recently teamed up
with MasterCard to introduce a new contactless technology, which allows credit
cards to be identified by an embedded computer chip, which eliminates the need to swipe
the card through a traditional card reader. We believe that this technology will improve
transaction time and help reduce fraud, and represents a very exciting marketplace, now
and into the future, for payment processing services.
CEOCFO: In closing, address potential investors, why should they be interested in
Acies and what should they realize that doesnt jump off the page when they first
Mr. Tischler: One thing that we cannot overemphasize is
that we have a proven track record of growth, and that it has been entirely organic. We
are on a steady growth stream that has continued through today, and we have a very
scaleable business model that will let us take advantage of economies of scale. We are
confident that in the very near-term future -- and I cannot be more detailed than that --
we are going to be achieving profitability as a company. We have a clean balance sheet
which can be leveraged should we need capital. What the investor on the street might not
realize is the hidden value on the balance sheet: Our merchant account
portfolio. The value that is behind that merchant account portfolio is much greater than
generally accepted accounting principles allow us to show on our balance sheet, and that
value is continuing to grow by the day. In addition, it is a very high quality portfolio
in terms of the diversity of the merchants, the diversity across industries, geographic
diversity and the quality of the merchant. In addition, we dont have any merchants
that are internet-only, e-commerce businesses; we target bricks and mortar
merchants. All of these attributes serve to enhance the valuation of our merchant account
portfolio, which is not exhibited in our financial statements.
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