TWST: What is Electronic Clearing House?
Mr. Harris: We're an electronic payments processor. We've been at it for roughly almost 20 years now, so a very mature company. We focus on providing credit card check and ACH payment processing primarily into the card-not-present market, the Internet catalog, direct marketing and those areas. We do have some penetration into the retail market, but primarily the card-not-present market. Our company is in Southern California with 240 or so employees. We are very much sort of a niche player in our space competing against very large FIs and established payment processors. The company in the recent past has begun to focus on a multi-currency and more of an international processing flavor as the Internet expands. We are following the trends of our customers and providing more of a global or an international payment service. That's essentially our offering in our target market.
TWST: What are some of the keys to being a successful competitor? What's the ultimate differentiator that you bring to that marketplace?
Mr. Harris: A common story is enabling payments for the companies that are selling in your core market, so you've got to be able to commit. We are really focusing on some of the things like the multi-currency capability and to be successful, you need to have that kind of focus on the market. When you bring up a Website, the majority of them are still in US dollar. And clearly there are people who shop from outside the US, and the ability to offer that consumer the ability to pay in their home currency, we think, is a pretty powerful advantage and that will help drive sales for our customers. Clearly, to the extent you can provide a product that helps customers sell more of their product, we think that's a smart way to grow your business.
TWST: Is there an agenda, a priority list for the next 12 to 24 months?
Mr. Harris: There is. We've got a couple of things that we're doing. We have a pretty exciting sales and marketing initiative we've launched in addition to our core direct sales effort, which is important. We have some niche markets that we're entering and we have a new sales model, what we call our embedded sales model. We are looking at crafting very significant large strategic partnerships with software or solution providers to our markets. We would go into a market and embed our payments into a software application and create the ability for that software company or that IT company to monetize the payments that today are flowing through their systems that they are not realizing any economic value from and creating a new business model for those people to do that. Our benefit is we'll leverage the relationships that they have with their customers, the stickiness they have, and we leverage a significant distribution that we don't have today.
TWST: As investors track and assess your performance, what are the key metrics that they should focus on? What should matter to the investor? What matters to you?
Mr. Harris: I think they look at, obviously, revenue. There is financial, so they look at revenue growth and margins. Those obviously are important to us, but I think it's important to also look at the industries we're in, particularly. ECHO is a very unique company. There is a scarcity value to small processors in the space. There is a reason there are not a lot of others like us around, because at this point it's very difficult to get into this business. We're a little guy and we've achieved a level of critical mass. We really stand alone and from a size and capability standpoint. We are big enough to be effective, but we're still small enough to care about our customers. We are not a big generalist, but from an investing standpoint view we are a very unique payment property. I think in addition to the financial matrix, the specific markets we're going into, the e-commerce markets and some of these things where I think there is great growth opportunity, it's also important to remember that we sit in a very unique space, given our size and industry.
ECHO 1-yr chart