How Netevia Seeks to Be ‘a Square for ISOs’

Payments platforms have worked for years to find the key to winning and keeping merchants while also holding on to independent sales organizations, the agents that are key to signing up merchants. Now Netevia Group LLC thinks it’s found that key in banking.

“It’s a pretty simple strategy,” says Vlad Sadovskiy, a 27-year payments veteran who a year ago took over as chief executive of the North Miami Beach, Fla., processor. “There’s not a single [payments] provider that can offer ISOs an opportunity to participate in the banking world.” So Netevia, he says, is filling that gap in an effort to be, as Sadovskiy puts its, “Square for ISOs. That’s never been done before—agents representing digital-banking services.”

In fact, the banking services—which rely on a virtual debit card linked to a bank account that pays up to 1.5%, with the ISO getting a percentage on top of what the merchant earns—are unabashedly positioned to follow Square’s approach in using cards and bank backing to win and keep merchants, only in this case also rewarding agents. The financial institution behind Netevia’s program is Attica, Ohio-based Sutton Bank, known for its work with fintechs including Square.

The basic proposition, says Sadovskiy, is that “the merchant will make more money if it keeps their money with us.” He characterizes the approach as “simplistic, easy to understand—opening a checking account and using a debit card.”

Also, like some of its fintech rivals, Netevia is preparing to roll out a a Netevia app that will be incorporated into terminals from Pax Technology Inc. The devices will likely be released next month, Sadovskiy says. The company already offers its own Android-based N-line devices.

The company is counting on the mix of products and services to tie merchants tightly to its platform—though sellers are free to adopt the banking services without processing with Netevia, through a service called “Banking Only.” The result, however, is the same, adds Sadovskiy: “Merchants are not leaving in our world.”

More programs and products appear to be on the horizon. “We plan to roll out many more programs down the road,” he says, while merchants that process through the company as well as adopt its banking services “will get more benefits.”

Still, Sadovskiy says, the key is not so much banking as it is holding on to merchants while letting ISOs manage their accounts. “We’re not trying to replace a bank,” he notes. “We’re trying to optimize merchant deposits and give control to the agent channel.”

Before the launch of Netevia, Sadovskiy spent eight years at payments provider Net Element Inc. and its Unified Payments unit. Net Element had been using the Netevia name for a set of payments and rewards technologies it offered merchants. But the company was forced to divest its payments-services business in 2020 when it merged with Mullen Technologies Inc., which at the time planned to launch a line of Chinese-made electric sports cars in the U.S. market.

Netevia processed $7 billion in transactions last year and expects that volume to grow by $1 billion in 2023, according to Sadovskiy. While it employs about 120 persons in operations, it works with roughly 1,000 ISOs, he adds. Merchant IDs—MIDs—total 25,000.