Calpian, the Dallas headquartered company focused on acquiring the revenue streams created between ISO providers (independent sales organizations who contract with credit card processors and sell processing services to merchants for the acquiring banks) and the small to mid-sized retailers served thereby, has created a stable revenue footprint in the electronic payment processing sector by becoming a vital link in this merchant processing/ISO chain.
By going directly to the ISOs that created the contracts with the merchants in the first place and underwriting every potential deal via the company's highly-evolved internal processes, CLPI has rapidly accrued a handsome set of residual portfolios and cultivated a powerful network of ISO partnerships which are constantly generating new merchants every month. To fully capitalize on this capability, CLPI has established a sophisticated PR presence in industry trade journals and relevant mediums, gaining traction in the ISO industry by showcasing the company's acquisition capabilities in leading publications like Transaction World Magazine (wholly-owned subsidiary of A.R.T. Holdings, Inc., a monthly, ISO/merchant service focused publication for the electronic payments sector), as well as The New York Times, and international press outlets like The India Times.
CLPI accelerates the groundwork for ISOs and merchants, as the ISOs accelerate payment processing for the merchants, handling all the complex back-end credit card processing tasks required (approvals, credit checking, guarantees, and etc.), from application through to execution. Just as ISO's also help merchants get their credit card payment infrastructure going, so too does CLPI aide ISOs, negotiating directly to purchase residual revenue streams and then closing via the processors (pending customary approvals) on said rights. Tight-knit partnerships with the leading domestic processors and banks has granted CLPI unprecedented strength for its size and the company routinely is able to punch above its own weight in the sector due to the superb mix of electronic payment processing services and industry connections available.
The management team has a collected 60-years of industry experience (even working as expert resources for both the Federal Reserve and Congress) with hundreds of portfolio acquisitions under their belts, many of them absorbed into CLPI management from A.R.T., whose activities represented some 35k merchants. It is this kind of boots-on-the-ground industry experience that has allowed CLPI to navigate so ably in this 10k-strong community of ISOs who directly service a market of some 2M smaller domestic merchants ($1B in residuals annually and growing) from across all industries.
Cash flow positive on an operating basis (Aug 14, 10-Q), the company has also pulled in some $2.1M in financing (issuance of stock/subordinated debt) to push through its Digital Payments Processing Ltd. (DPPL) initial equity investment in India, a particularly choice maneuver for CLPI which will place shareholders in the revenue pole position. India's middle class is larger than the entire domestic U.S. population at this point and the volume of transactions that this extremely capable, well-positioned, and veteran level-experienced firm can deliver, in what is essentially a novice-dominated space, should really spark investor interest. The amount of overwhelming force CLPI can bring to bear on that huge vector explains the company's strategy instantly.
Calpian has become enmeshed as an indispensable part of the massive electronic commerce grid, which is like a central nervous system for our economy, and with such a firm domestic footing, as well as a nice foothold in India emerging via the DPPL move, shareholders have an agile asset in CLPI. The company certainly has found a way to carve a low-risk slice off an industry that continues to grow and innovate out of necessity, often spurred on by tightened credit markets.
For more information on Calpian, Inc., please visit the company's website at: Calpian.com
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