Newtek Business Services, a New York-based national super-ISO, intends to expand its stable of 10 or so active ISOs to as many as 250.
“Historically, the ISO channel has not been a significant contributor to our business but it will be going forward,” says Barry Sloane, Newtek chairman, CEO and president.
Some 32 ISOs are already considering signing on and as many as 100 could join forces with the company in the next 12 months, Sloane says.
To recruit and manage that outside sales force, the company has hired executives experienced with handling ISO relations for big companies.
Randy Sagar joined the company in January as executive vice president of business development and is opening an office in Louisville, Ky.
“Randy’s relationships and pedigree in this space” should help bring in ISOs, Sloane maintains.
Sagar’s a former partner in Financial Alliance and served as executive vice president of sales and marketing for National processing Center of Kentucky, or NPC, and its successor Bank of America Merchant Services, a Newtek press release said.
At BofA Merchant Services, Sagar built a team who added 8,000 merchant accounts per month, according to the release.
Two other new executives, Mike Valerio and William Berry, have worked with Sagar at NPC and BofA, and they will concentrate on developing Newtek’s ISO channel.
The ISOs that the new team brings into the company will promote Newtek’s payments platform and also the company’s value-added products, which include payroll services, web design, data storage, loans and insurance, Sloane says.
“If ISOs are interested in passing referrals for all these different products … there are a lot of opportunities to work with the small business authority and help their customers and gain ancillary income,” he says.
ISOs earn an upfront fee for facilitating a loan, a percentage of the revenue from payroll services and a portion of upfront revenue from web design. “If it is insurance, we would have to work out an arrangement to pay them that doesn’t violate insurance laws,” Sloane says.
Whatever Newtek products ISOs might choose to promote, they can use them to differentiate themselves from competitors and divert the sales pitch from pricing, he suggests.
“It’s an opportunity for them to monetize the great relationship they have with their customers and hand it off to a publically traded company that’s been in business for over 12 years,” Sloane maintains.
Newtek is processing $4.2 billion in transactions annually and will fund about $175 million in small-business loans this year and has been lending 10 years, he notes.
Meanwhile, Newtek tech products are becoming the focus of another new hire, Sundeep Dronawat, who has joined the company as executive vice president and advisor to the chairman.
Dronawat will work on future offerings in cyber security and point of sale in the cloud for e-commerce, according to Sloane.