North Carolina

M erchant Industry llc R

partnershipproposal

Acquir ingPract icalB u s i n e s s S k i l l s

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for

Cynthia Bostic Assistant Director of Support ServicesLeading Auxiliary and Program Services Division of PrisonsState of North CarolinaDepartment of Corrections


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Introduction

I n addition to making amends to society, rehabilitation is an important goal of incar-

ceration. Learning and applying new vocational skills creates a better sense of self-

worth and better prepares the formerly incarcerated for employment.

Merchant Industry would like to partner with the North Carolina Department of Cor-

rections in creating a program for the incarcerated that provides them with a skill set as

well as a working environment where they can put those skills to use. This program will

enable the inmate to transition into a workplace upon release where they have a chance

to build a new life.

Engrained in Merchant Industry’s DNA, is a commitment to second chances.

Many employees, including some at the management level, needed a second chance to

prove themselves and are now enjoying stable careers because they have turned their

lives around.

We want to further demonstrate our commitment by partnering with you in bringing

the opportunity for a second chance to the inmates of the North Carolina Department of

Correction.

What follows is a description of what we do, our corporate history, a description of

our senrior management and an initial proposal for what we have to offer the Division of

Prisons.Ali JavidfarManager,New Business DevelopmentMerchat [email protected]


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WhatWeDo hen a merchant accepts a bankcard (e.g., MasterCard, Visa, American Express),

there is a middleman who processes that transaction. Merchant Industry is that middleman.

Our clients, known as merchants, accept their customers’ payment. At the end of their business

day, the merchant “batches out” their transactions. Even though we’ve electronically provided

approvals for all those purchases, it isn’t until they’re batched out that they become actual trans-

actions.

The next day, we cash-flow the

merchant’s portion of the transac-

tion into their bank account. When

the transaction is reconciled, the

card company bills or deducts the

total amount from the customer’s

account, we are reimbursed for

cash-flowing the transaction plus

our fee and the bankcard company

has made their percentage which is known as “the interchange.”

The amount a merchant receives is a percentage less than the total purchase amount. It is

out of that deduction that Merchant Industry and the bankcard companies make their profit.

This complicated “calculus” all occurs within secure computer servers that only employees

with the proper security clearances have access.

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OurHistory erchant Industry was founded in 2007 by Leo and Jennifer Vartanov. Leo and Jen-

nifer foresaw the leverage they could bring merchants in negotiating their bankcard processing

fees when Congress passed legislation regulating the bankcard industry.

Since that time Merchant Industry has grown to have over100 employees at our headquar-

ters in Long Island CIty, Queens, New York. We are the fastest growing card processor in North

America.

Merchant Industry has partnered with over 80,000 merchants, process-

ing over $3billion annually, handling 250million transactions per month.

In August 2013, INC. magazine placed us #717 on their prestigious INC.

5000, ranking us #44 among financial service companies. . Merchant Industry is the only card

processor included in the 2013 listing. This link connects to our profile at INC. Magazine: inc.

com/profiles/merchant-industry.com

Our partnes include:

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SeniorManagement

Leo Vartanov, Chief Executive Officer / Co-Founder

Under Leo’s leadership, Merchant Industry has demonstrated unprecedented growth in

the financial service sector. He continues to design our corporate strategy, ensuring our

continued success. He is considered a leader and visionary in the independent card pro-

cessor marketplace. Along with his wife, Jennifer, they formed Merchant Industry in 2007,

predicting the tremendous opportunity that Congressional legislation would create in the

bankcard processing sector. Under his leadership, Merchant Industry has grown 642%

spreader over 3-years and has received many industry awards and recognitions.

Jennifer Vartanov , Chief Financial Officer / Co-Founder

Jennifer is focused on compliance and financial oversight. She is a well-respected figure

in the bankcard processing sector given her breadth of knowledge and innovative finan-

cial structuring. Jennifer and Leo live in Nassau County with their 3-children.

Christopher Benabu , Chief Operating Officer

Chris oversees day-to-day operations; growing Merchant Industry’s portfolio of process-

ing partners. He provides leadership to the new business development teams and con-

tractual oversight. Chris is a serial entrepreneur, having developed successful businesses

in diverse sectors.


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Frank Kotler, Chief Technology Officer, Infrastructure & Partner Support

Frank ensures the smooth operation and security of the 250M monthly transac-

tions that Merchant Industry handles. His expertise encompasses our complex

infrastructure as well as integration with merchant software used by our part-

ners.

Larry Emmons, Vice President of New Business Development

Larry strategies all new business initiatives and has achieved 100% growth for

each year of his leadership. He first joined Merchant Industry in 2009 on the

ground floor as an outbound lead generator. His acumen for structuring pro-

cessing deals along with his commitment to growing the business very quickly

placed him in a leadership role. Rising through the ranks of account manage-

ment, Larry is now a key executive ensuring Merchant Industry’s continued

growth.

A li Javidfar, Manager, New Business Development

Ali recruits, trains, and manages the lead generators. He plays a vital role in

expanding Merchant Industry’s portfolio by creating an inspiring workplace, en-

couraging the lead generator to excel. He also manages the largest individual

portfolio of accounts in the company.

SeniorManagement


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TheP rocess

ur primary source for new business is a group of Lead Generators.

Workers who make outbound calls generated by a third party dialing system. The

goal of these conversations is to convert a cold call into a warm lead.

Our Lead Generators are trained to solicit small and medium business owners

to send us a recent monthly statement of their bankcard process statement. This

is known in our sector as their “Merchant Account Statement.”

There are several techniques a Lead Generator may use in order to encour-

age the business owner to submit this statement, but essentially, it comes down to

the fact that they will save money if they process with us.

No sensitive information is exchanged between the lead generator and the

business owner. The Merchant Account Statement is faxed to a secure server

where it is then assigned to a member of our business team who becomes the only

point of contact for the business from this point forward.

OurdialercanbeconfiguredsothatthetheLeadGeneratorhasnocontrol

over its operation. It is a completely automated system that is run by a manager.

We have complete control of the information that is displayed to the operator. At

no time will the operator have the ability to make outgoing calls of their own choice.

Additionally, all conversations are recorded and can be reviewed at any time

for both quality and compliance.

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erchant Industry is seeking to create a vocational training program and work-

place opportunity within the North Carolina Department of Corrections, Department of

Prisons. At our expense, we want to provide the materials and training needed to ed-

ucate the inmate on how to work along with the dialer and interface with the business

owner.

Coinciding with these efforts, we would create a modest call center, where our

newly trained lead generators can put their new skill set to work and begin soliciting warm

leads for our business team comprised of citizens located in a different location.

Learning the ability to convert a cold call into a warm lead, as well as computer

skills, will make the inmate more employable upon release. There will always be barriers

for the formerly incarcerated. Ex-offenders can do their part to minimize these conse-

quences by reentering society with valuable business skills that employers need.

Merchant Industry already has a track record giving the formerly incarcerated an op-

portunity to transition into the workplace. We work with halfway houses, Inmate Reform

Organizations, and work release facilities in the Five Boroughs of New York City recruiting

individuals looking for a chance to reintroduce themselves to society as a meaningfully

employed citizen. We embrace people of all classes, backgrounds, and ethnicities.

Many of our employees have successfully reinvented themselves and have broken

the cycle of recidivism and incarceration. They are now career minded, business orientat-

ed individuals who contribute to the business world.

While it is ultimately the accomplishment of the individual, Merchant Industry is

proud of that we have been able to provide an infrastructure that supports freedom and

success.

MOurPartnership


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TheFuture any incarcerated individuals do have business acumen. Many of them have

experience in sales, distribution, asset management, etc. We believe that with the prop-

er guidance and opportunity, many ex-offenders will become successful business pro-

fessionals on the right side of the law.

Merchant Industry’s formula for advancement is the same for every member of the

New Business Development Team. Team members start out as lead generators. As a

team member advances, access to training is available that will advance them onto our

businessteam.Atthislevel.theteammemberqualifiestoreceiveapercentageofwhat

the merchant processes and begins to earn what we call a residual income.

Working with Merchant Industry is not a dead end job. It is an entrepreneurial

opportunity. Merchant Industry provides the overhead, infrastructure, and leads that a

motivated team member can use to create a portfolio of merchants. As that portfolio

grows, so does the team member’s participation in the residual income generated by

those merchants.

Ex-offenders who have successfully participated in this program will be eligible to

join our workforce as an Independent Sale Operator (ISO): a freelancer who is compen-

sated for each warm lead they generate. As an ISO, the individual has the opportunity to

build a portfolio and eventually build a business that will generate a substantial monthly

income.

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MovingForward

l though we a re exper ts in ca rd p rocess ing , we a ren ’t fami l i a r

w i th the complex needs and regu la t ions o f the Nor th Caro l i na De-

par tment o f Cor rec t ions .

The goa l o f th i s p roposa l i s to p rov ide a f ramework and the in -

sp i ra t ion to c ra f t a de ta i l ed bus iness p lan tha t w i l l p roper l y con fo rm

to the contex t i n wh ich i t needs to opera te .

Perhaps par tne r ing w i th a non-pro f i t f am i l i a r w i th runn ing p rograms

w i th in the Depar tment o f P r i sons wou ld be va luab le .

Whatever the pa th , Merchant Indus t ry looks fo rward to work ing

hand- in -hand w i th you to c rea te a p rogram tha t w i l l he lp be t te r p re-

pare the fo rmer l y i ncarcera ted to reente r soc ie ty ready to cont r ibu te

and not cont inue to re l y on “ the sys tem.”

A

M36-36 33rd Street

Long Island City New York 11106

866-811-1005 (v)877-493-0770 (f)

M e r c h a n t I n d u s t r y

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