Bipin C. Shah is credited with pioneering ATM networks, 24-hour ATM service, payroll debit cards, debit at the point of sale, cash-back with debit cards and pay at the pump. These days, he’s focusing his creativity on merchants.

“We did all those things for consumers in the ’70s and ’80s, and now we can do as much for small businesses,” he says.

From a passenger’s seat in a car passing beneath the Hudson River in the Lincoln Tunnel, Shah explained by phone how he came around to that way of thinking.

Two years ago, Shah got the idea of combining prepaid cards and payroll services. “Why handle a company’s payroll and then have them go to CVS to buy gift cards for their employees?” he asks rhetorically.

He took his idea to long-time colleague Peter Davidson, who suggested adding merchant services and transaction processing to the mix. Davidson, an owner of Brooks FI Solutions LLC and a strategic partner at Align fsc, worked with Shah at Genpass Inc., which U.S. Bancorp acquired in 2005, according to his LinkedIn page. He earlier was president of Speer & Associates, an Alpharetta, Ga.-based consultancy.

Together, the pair came up with the idea of creating an unusual “all-encompassing” company that caters to all of a small merchant’s business needs.

To pursue that goal, they formed the Universal Business Payment Solutions Acquisitions Corp. and established a headquarters near Philadelphia. Shah serves as chairman and CEO, and Davidson is chief administrative officer.

Shah approached private equity companies for funding but couldn’t get the deal he wanted. Instead, the new company raised $75 million last spring with an initial public offering of stock.

The capital helped the firm make the three acquisitions it announced July 9.  It bought Electronic Merchant Systems, a Cleveland-based ISO; JetPay LLC, a transaction processor; and AD Computer Corp. and its subsidiary, Payroll Tax Filing Services Inc., to handle payroll servicers and tax filing.

As Universal grows, it could use ISOs and sub-ISOs to sell its services, Shah says. The company also has an interest in buying ISOs and buying merchant portfolios, he notes.

JetPay has a stable of ISOs that will continue to work with Universal, Shah says.

Two companies, ADP and Paychex, dominate the payroll business, and 1,800 small firms divide up what’s left over, he notes. He foresees consolidation among the small players and hopes to acquire some of them.

Merchant cash advances, which provide funding for small businesses in exchange for a percentage of future card receivables, promises to become part of Universal’s offerings, Shah says.

Offering prepaid cards to consumers whose credit ratings don’t qualify them for bank accounts also holds special appeal for Shah because of his exposure to the poor during his early years in Asia.

Shah was born in India and grew up in Burma, feeling that his ancestors had made a mistake that led to his being born in the wrong place, according to an article published in Time magazine.

Shah went on to attend college in the United States, earning a bachelor’s in philosophy from Baldwin-Wallace College and master’s in the same discipline from the University of Pennsylvania.

He has served on the board of Visa Inc. and has held senior positions at American Express Co., the Vertex division of MAI, Genpass, Gensar Inc. and CoreStates Financial Corp. Shah helped create the MAC shared electronic funds transfer network while vice chairman and chief operating officer at Philadelphia National Bank, the predecessor of CoreStates.

Because of his entrepreneurship and innovation, PaymentsSource sister publication American Banker referred to Shah in a 1995 article as “the future Bill Gates of payment systems.”

Shah also found his name in the headlines in the ’90s when his former wife disappeared with two daughters. His offer of a $2 million reward set legions of bounty hunters on their trail, and he was reunited with his daughters two years later.


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