VeriFone CEO Works to Heal Company's 'Self-Inflicted Wounds'
VeriFone CEO Paul Galant says he is re-organizing the terminal maker's fragmented research and development process and improving its current cost structure in an effort to repair the company.
Galant became VeriFone's CEO and a member of its board of directors on Oct. 1, 2013 as a permanent replacement to longtime CEO Doug Bergeron, who left the company in March of 2013. Galant took over a company dealing with issues such as deteriorated customer relationships and heightened competitive pressures.
Galant is working to overcome various "self-inflicted wounds" from late certifications, shipments and product launches in the past and "fix our foundation," he said in a March 24 presentation at the Barclays Emerging Payments Conference.
It will be important for VeriFone to "globalize" its payments-as-a-service offering because there is "no need for it to look different in northern Europe than it does in Mexico or Israel," Galant says. VeriFone also needs to focus on providing merchants with terminals that allow loyalty programs, couponing, targeted offers and currency conversions, he added.
"We are very realistic about having to invest in the growth of this company, having to make sure our clients get product on time, every time, with high quality in the markets that they need and that the product is certified," Galant says.
It is wise for VeriFone's CEO to bluntly discuss and address the company's problems, says James Wester, research director for global payments at IDC Financial Insights, in an interview.
"Paul Galant is an incredibly sharp guy and this is more than just noise," Wester says. "VeriFone is really going to make these changes."
Like any large company, VeriFone slipped into some bad business practices with little concern about competitors, Wester says. "This is a company that probably could have done quite well for a really long period of time just shipping to very large clients, but then you suddenly turn around and realize your market share has eroded."
VeriFone's latest line of terminals "shows that they know what they are doing" in staying in the forefront of developing payments technology, Wester adds.
Board member Richard McGinn served as CEO on an interim basis prior to Galant's hiring from Citigroup.
During that time, McGinn acknowledged that VeriFone's troubles ran deep, calling his conversations with customers an "eye-opening experience" in which they were "brutally honest about our lack of partnership."
McGinn expressed confidence that VeriFone could recover from its mistakes by focusing on next-generation technology, including unattended terminals and mobile point of sale devices.
The coming decade will be the most important for the payments industry "that any of us have ever lived through," Galant says.
Bergeron left the company amidst disclosures that VeriFone had engaged in prohibited business dealings with Iran through a third-party distributor. In September of 2013, Bergeron became CEO of Opus Global Holdings, a company that seeks acquisitions in the payments and financial technology sectors. He reportedly invested $50 million into Opus.