When José Marina was getting ready to open his pizza shop, there was one essential ingredient missing in his business recipe.
The proprietor of the Magic City Pizza shop in West Miami needed a modern payment system to process credit and debit card purchases, which he knew would make up a large share of transactions at his Coral Way restaurant.
Marina looked at different options, including one large commercial bank with branches in the neighborhood, “but they didn’t have what I needed to solve this problem.” This bank offered him an older-generation credit-card device without the capacity for fast, electronic processing.
When he visited a local Bank of America branch, however, he found out about their payment processing system for businesses — Bank of America Merchant Services, or BAMS. Their services included a point-of-sale electronic “cash register” that handles credit and debit cards as well as cash. And most important: “The money from my sales appears in my account the next day.”
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BAMS “helped me since the beginning,” said Marina, who opened the Coral Way restaurant two years ago and now has another in Kendall. “They offered to lease me the register and other equipment when I didn’t have the money to buy it, and their rates were very competitive. They helped me a lot.”
After installing the equipment and linking up with the BAMS electronic system, Marina discovered that he could also obtain programs for handling payroll and inventory and other small-business management solutions, a big assist for a new business owner who wanted to focus on making tasty pizzas.
BAMS specializes in providing payment processing for small customers like Marina and other family-owned stores as well as for law firms, multinational companies and e-commerce enterprises. It’s a joint venture between Bank of America and First Data Corp., a global payments technology firm.
And it’s the country’s largest payments processor as measured by card-transaction volume; in 2016, it handled about 14.4 billion transactions.
Although it’s based in Atlanta, BAMS manages payments for thousands of companies in South Florida. In Coral Springs, its regional sales and service center has 300 employees.
“We serve about 650,000 merchants, and we help them get paid,” said Tim Tynan, BAMS’ New York-based CEO who recently visited the Coral Springs center. “South Florida is one of our most important locations in terms of clients — especially small businesses — and Florida is one of the top five states for BAMS.”
As Marina, the pizza-restaurant owner, learned, BAMS rents or sells its merchant clients the modern version of a cash register: a computer that processes all types of credit, debit and gift cards at the point of sale.
And as most consumers know, whether a transaction is approved or declined is usually known in seconds. After a merchant puts the charge through its register/computer, a payment processor like BAMS will check the information by forwarding it to the bank that issued the card for verification while also taking steps to avoid a fraudulent transaction. Once the card’s information has been verified, the processor transmits an approval to the merchant. The total for the pizza, in this case — less fees charged by the issuing bank and the processor — is deposited in the merchant’s bank account on the next business day.
BAMS makes its money by signing up a client, selling or leasing the point-of-sale equipment to the merchant, and charging a tiny fee for each transaction it handles. It also earns revenues from offering other products and services, like foreign exchange transactions, business software and advanced cybersecurity protection. Marina said that the fee totals vary according to the volume of payments going through his stores. For his two pizza shops, he pays an average of $500 a month for leasing the equipment, processing fees and other business solutions.
Bank of America manages the sales and customer service, while First Data processes the transactions at its processing centers.
Company name: Bank of America Merchant Services (BAMS).
Launched: Bank of America Merchant Services was set up in 2009, and its Coral Springs operation began the same year.
Revenues: 2016 was one of the best years for sales growth since the joint venture began operating in 2009, CEO Tim Tynan said. Market share grew by 1 percent last year, a big increase in a market where there are dozens of competitors. In 2016, Bank of America posted total revenues of $83.7 billion, and First Data reported consolidated revenues of $11.6 billion.
The difference: “We combine the technology and innovation of First Data with Bank of America’s enormous market reach and customer service model,” Tynan said.
Clients: Small and large businesses that need electronic payments processing for all types of credit and debit cards, as well as gift cards and other e-commerce transactions. The company says it reaches over 650,000 individual merchants.
Competitors: Other large payment-processing companies like Elavon and Vantiv, and similar systems run by large financial groups.
Employees: About 2,200 worldwide, nearly 500 in Florida and 300 in Coral Springs.
Offices: Corporate headquarters in Atlanta. The firm also has operations and offices in Coral Springs, nine other states (including Georgia), Canada and England.
Outside view: The Strawhecker Group, a management consulting company that specializes in the electronic payments industry, ranked Bank of America Merchant Services as one of the top payment-processing companies in a crowded market.
Business lesson: Developing and maintaining a smart plan to keep pace with market growth, which includes advanced technology to meet current and anticipated market needs.
Best decisions ever: Setting up the joint venture, which combined the technological and innovative talents of First Data with Bank of America’s huge international market, branch network and customer service expertise.
Challenges: “We can’t be complacent,” Tynan said. The company is very focused on meeting the growing needs of its clients [merchants] and their customers in all types of payment transactions, including e-commerce, foreign exchange and payrolls, and especially on providing the best technology to ensure security across all transactions. “Security is a huge challenge across the board.”
Strategy: South Florida and the U.S. Southwest offer strong opportunities for continued growth. “South Florida is one of the fastest-growing regions for us, and our goal is to grow with it,” Tynan said.
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