First National Merchant Solutions Shifts Toward ISOs for Growth

Long quiet on the reseller front, First National Merchant Solutions is signing up independent sales organizations as part of a strategic shift mapped out by its new president, Diana M. Mehochko. The merchant-acquiring unit of First National Bank of Omaha signed up half a dozen ISOs last year and is seeking more, Mehochko says, though she refuses to specify a goal. “If I say that, people will say, 'that's it, she's done,'” Mehochko says. Among her latest recruits is United Bank Card Inc., Hampton, N.J., one of the largest ISOs in the country. FNMS signed UBC earlier this year in the wake of the failure of its former processor, CardSystems Solutions Inc., and CardSystems' acquisition by Pay By Touch Inc. (Digital Transactions News, Oct. 17, 2005). After coming back to the processor nearly 18 months ago (she had worked there earlier in her career), Mehochko saw an opportunity to boost transaction volumes by using ISOs to sign merchants beyond the large, bread-and-butter national retailers FNMS serves, including OmahaSteaks.com Inc., Gap Inc., and L.L. Bean Inc. “I set a strategic plan for where I felt [the company] needed to go,” she says. The plan, she says, relies heavily on “growth in independent sales organizations.” Mehochko says FNMS, which processes more than $30 billion in card transactions annually, shied away from the ISO channel until recently chiefly because of its ownership of a stake in Retriever Payment Systems Inc., a large ISO acquired last year by Iron Triangle Payment Systems. “It kept us from signing ISOs,” she says. “You're not willing to compete with yourself.” But the Iron Triangle deal has removed these fetters, she says, and now the processor is hard at work on cold calls, referrals, and working trade shows. Mehochko herself was part of FNMS's delegation at the Electronic Transactions Association's annual trade show last week in Las Vegas, where she told Digital Transactions News she was keeping “extremely busy.” Under Mehochko, the company has also expanded its both its telesales and direct-sales groups. The latter calls on mid-market merchants. It is also redirecting energy into the markets where it is strongest, including general retail, restaurants, and mail order/telephone order (which includes e-commerce). With rapid industry consolidation, as well as events such as the collapse of CardSystems, Mehochko is eager to stress FNMS's stability. “We're not going anywhere,” she says. “We're not for sale. We're not going to be for sale. I'm not going to be a business card du jour.”