Elavon’s New CEO

U.S. Ban­corp’s Elavon is look­ing ahead to its next phase of growth. Spe­cial­iza­tion will be key to this strat­egy, ac­cord­ing to Elavon’s new CEO.

ISO & Agent - - INSIDE 07/08.2017 - BY KATE FITZGER­ALD

Jamie Walker be­came Elavon’s CEO in March. It’s a big job in a crowded mar­ket, so how can he find a way to grow the com­pany?

The U.S. mer­chant ac­quir­erpro­ces­sor arena is so ma­ture that the only dra­matic gains typ­i­cally come from con­sol­i­da­tion, lead­ing to even more for­mi­da­ble com­bi­na­tions that make the next phase of growth even tougher.

But there are also op­por­tu­ni­ties for com­pa­nies that know how to spe­cial­ize.

U.S Ban­corp.’s Elavon ranks among the top half-dozen of U.S. mer­chant ac­quir­ers in terms of vol­ume, and un­der new CEO Jamie Walker, the com­pany is ready to wield sev­eral ad­van­tages that ri­vals may find tough to counter.

Its com­peti­tors are as for­mi­da­ble as ever. Just in the past few years, Van­tiv pur­chased Moneris, TSYS pur­chased Trans­first, and Global Pay­ments ac­quired Heart­land in an in­dus­try where two deep-pock­eted pow­er­houses—jp­mor­gan Chase & Co.’s Chase Com­merce So­lu­tions and First Data—con­tinue to dom­i­nate the pack.

“It’s tough to show mar­ket share growth in such a crowded mar­ket, but I see op­por­tu­nity shift­ing in our fa­vor in sev­eral ways in the cur­rent mar­ket­place,” Walker said.

Walker, a long­time Elavon ex­ec­u­tive whose ten­ure dates back to 2001, was ap­pointed to the CEO role in March af­ter serv­ing in var­i­ous ca­pac­i­ties at Elavon over the years, in­clud­ing chief fi­nan­cial of­fi­cer.

Walker re­placed Si­mon Haslam, who left last year.

The key el­e­ments to Elavon’s growth strat­egy are part­ner­ship and spe­cial­iza­tion, he said.

“We’re re­ally go­ing to keep em­pha­siz­ing strate­gic part­ner­ships, be­cause we have a lot of as­sets that give us ac­cess to pretty broad dis­tri­bu­tion chan­nels, not just with U.S. Bank or with other large banks, and our very large ISO port­fo­lio,” Walker said.

That’s im­por­tant be­cause pay­ment terminal tech­nol­ogy is evolv­ing to de­liver more mo­bile and in­te­grated ser­vices, but get­ting new so­lu­tions out to the mar­ket­place is one of the big­gest chal­lenges, and an area where Elavon has an edge over com­peti­tors, Walker says.

“We show up as a re­ally strong part­ner to help com­pa­nies dis­trib­ute some of these new pay­ment so­lu­tions, not just

with our reach but with our tech­nol­ogy and plat­form,” Walker said.

For ex­am­ple, U.S. Bank and Elavon in re­cent years have in­vested mil­lions in a tech­nol­ogy in­no­va­tion hub in At­lanta, called The Grove, which is the site of on­go­ing tests of emerg­ing new mo­bile and next-gen­er­a­tion pay­ments, he said.

“We’re mak­ing bets on cer­tain types of tech­nol­ogy, and be­cause of as­sets we have that others don’t, we can pick and choose about which prod­ucts and part­ner­ships make the best sense to bring to mar­ket,” Walker said.

Elavon’s strength is its deep spe­cial­iza­tion in a few key niches, in­clud­ing air­lines and ho­tels. Elavon is the No. 1 pay­ment pro­ces­sor for air­lines in the world and pro­cesses pay­ments for sev­eral ma­jor in­ter­na­tional ho­tel chains; and it’s poised to dou­ble down in both ar­eas with new ini­tia­tives this year, ac­cord­ing to Walker.

“We have a fairly huge pres­ence al­ready in health care pay­ments, but we see a big long-term growth trend emerg­ing there, as more con­sumers shoul­der a share of di­rect pay­ments to doc­tors and hos­pi­tals,” he said.

For Elavon to achieve mea­sure­able growth, play­ing up its dif­fer­en­ti­ated ser­vices will be key, says Rick Oglesby, pres­i­dent of AZ Pay­ments Group. “The big chal­lenge for Elavon is to fo­cus on large seg­ments that are suf­fi­ciently siz­able to move the nee­dle, and to do so by en­abling small com­pa­nies that are more niche-cen­tric.”

While com­peti­tors may be eye­ing the same trends, Walker isn’t wor­ried about the threat from im­me­di­ate chal­lengers yet.

“The ad­van­tage to spe­cial­iz­ing in some of these niche chan­nels where we op­er­ate is that there’s a fairly high bar­rier to en­try, and some of these in­dus­tries re­quire very com­pli­cated ap­proaches for tak­ing pay­ments where we’ve al­ready built up deep ex­per­tise. No­body can eas­ily get into many of these ar­eas,” Walker said.

Elavon also serves a vast net­work of smaller mer­chants, many of which moved to EMV last year.

“We’re mak­ing bets on cer­tain types of tech­nol­ogy, and be­cause of as­sets we have that others don’t, we can pick and choose about which ... to bring to mar­ket,” said Elavon CEO Jamie Walker.

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