Rob Fawcett, Founder & President of Tiger Payment Solutions, joins Brian Cohen, Multimedia Specialist and host of ADDcast, to discuss the competitive credit card processing market; the critical issues confronting the heating oil & propane businesses in today’s environment; and Tiger Link, an efficiency tool designed to simplify the process of taking a payment, which in turn results in a better customer experience.
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Brian Cohen: Welcome to ADDcast, I’m ADD Systems multimedia specialist, Brian Cohen, and today I’m joined by Rob Fawcett, Founder and President of Tiger Payments Solutions. Rob, thanks so much for joining us today.
Rob Fawcett: Thanks, Brian. I’m happy to be here.
Brian: Now, Rob, I understand you grew up in the retail energy business.
Rob: I did. I’m a fifth generation oil and propane guy, and a credit card guy second. My family started a company in 1894 in the hay and grain business, before automobiles, in Cambridge, Massachusetts, and they went on to be in the ice business, where they’re cutting blocks of ice out of Spy Pond in Arlington, Mass. and packing them in sawdust and dragging them around by horse-drawn buggy. The original Teamsters, if you will. And then they got into the coal business, and, in about the 1950s, heating oil replaced coal, and have been in retail energy since then. My brother’s the primary operator of that business, and today it’s called Fawcett Energy. It serves about 20,000 residential customers throughout the Northeast.
Brian: So with all of that experience in the energy business, what prompted you to move into the credit card business?
Rob: Although I can drive a truck and tune an oil burner and install a heating system, I thought there might be a more interesting way to spend my days. So I got out of Colgate ‘91 and went off to business school and got out of Kellogg in 1998, spent some time in Latin America, where I met my wife who’s from Argentina. She was actually brand manager of Dove Soap for Latin America. When I married her and brought her back to Boston, I said, “now what am I going to do?” We had to think creatively, and, at that time, there was talk about opportunities to reduce the cost of credit card processing, so I spent some time learning about that. I ultimately wrote a business plan and submitted it to Wells Fargo and got them to underwrite me 15 years ago. So I’m proud to say we’ve been at it for a long time, and it was really down and dirty, just one sale at a time. But I saw an opportunity to not only help my family’s business dramatically reduce their cost of processing, I think, at the time we started looking into this, we were paying close to 4%. And we decided to take advantage of utility interchange pricing and some of the special programs offered by some of the card brands to dramatically reduce the cost of card acceptance. That was a primary motivator.
Brian: Well, in terms of credit card processors, I’m sure it comes as no surprise to anyone that it is a very competitive market, so how do you feel Tiger differentiates themselves from the competition?
Rob: Undoubtedly, there are many people in the business, and I have great respect for all of them. I’m happy to say that the other people serving our industry are all great, honorable people, so whomever a dealer chooses to work with, if they’re one of the ones seen in most of the trade shows, rest assured, they’re going to be treated well. But, I think where Tiger differentiates itself, is the fact that we’re the only independently owned, family owned, credit card processor out there now. All the others have been gobbled up either by large software consolidators, or private equity firms, so they have different marching orders. They don’t have the flexibility that we have to adjust prices or terms, or frankly, to be available. On nights and weekends, our phones roll over to our personal cell phones, and we’ll answer on a Sunday in the middle of January. We’re there for you. That’s where I think we really shine. I’m pleased to say we have virtually no attrition, and through that and word of mouth, we’ve managed to grow our business to the point where we’re in every state in the United States right now, which is kind of exciting.
Brian: Excellent. Now, what are some of the critical issues that are confronting the heating oil and propane businesses today that you’re seeing?
Rob: Well, I watch it firsthand through my family’s business, and I would say it’s threefold. The shortage of qualified labor, and finding young people interested in entering the field of heating and air conditioning – that’s a real burden. It’s not as attractive an industry as it may have been at one time, and as a result, people are having to reach farther and get more creative in trying to find people necessary to support their businesses. I know in the case of Fawcett, they’ve turned to using apprentices. And, instead of going to the regular trade shows or trade associations and their respective schools, it kind of has to be a grassroots effort to bring younger people up in the industry. I can’t help fix that one, but I can help fix what I think to be the second major issue and that’s the price today. With fuel now approaching six/seven dollars a gallon, that puts a tremendous burden in terms of cash flow on the day-to-day operations of a company. Imagine the same number of gallons being delivered or on the street and being weighed in collections not having not been completed. For that same number of gallons, you have almost twice as much cash required to support that operation. So, a dealer who may have limited available cash is certainly being forced to turn to their line of credit with their bank. And in some cases, I’m seeing that banks, the lines just aren’t enough to keep things going, so that turns to cash flow, and that’s where we really can solve a problem. Through credit cards you get instant payment, instead of having to wait for 30 or 45 days for an invoice to be produced for the customer to get around to writing a check. Keeping a credit card on file for subsequent use, you can automatically bill that card upon the delivery of goods and services. That’s a big help for dealers wrestling with cash flow constraints today. And the third thing, again, I can’t help you now, but it’s just the political and just the environment out there, and the perception that oil and propane are experiencing now that we’re not considered the cleanest fuel of choice, when, in truth, modern oil and propane equipment are extremely clean and should absolutely be considered when a homeowner or small businesses is looking to replace their equipment.
Brian: Of those three things you talked about, what are some steps that dealers can take to mitigate some of those challenges?
Rob: Certainly promote use of credit cards. From a cash flow perspective, credit cards are just a wonderful alternative. Not only does the consumer get their frequent flyer miles, their free trip to Florida every once in a while, but the dealer is able to collect monies, essentially on the day following delivery of the fuel, and that’s a big, big deal. So that’s the biggest thing. And then within the credit card realm, you want to promote MasterCard and Discover over Visa and American Express, simply because MasterCard and Discover permit fuel oil and propane dealers to take advantage of a little known element of what’s called the interchange table, where instead of paying traditional retail rates of about 1.54% and 10 cents, it’s a flat 0% and 65 cents. That’s materially different in terms of the overall cost to take that credit card over the alternatives.
Brian: Now I understand you had something you wanted to talk about today that you feel will help ADD Systems users. Do you care to elaborate a little bit on that, please?
Rob: Well, thank you for asking, I don’t mind if I do. So one of our great customers is a gentleman named Matthew Holt. He runs Herring Gas out of Mississippi. Matt and I have been working together for eight or nine years. He’s become a dear friend and collaborator, if you will, on how to do things better. People in the ADDs universe probably know Matt is an avid proponent of just doing things well and trying to make things incrementally better. He’s a programmer and kind of big thinker himself. He’s an IT specialist, and he approached me about helping him address what he thought was pretty low hanging fruit, and that was the elimination of the ID Tech M130 pin pads that all of the ADD dealers are using now to enter credit card numbers into their environment. So imagine you’re in an office with a half a dozen customer service representatives fielding inbound phone calls. When one of those inbound callers wishes to give a credit card number to pay their bill, whether it be for oil or for service, they, if they’re lucky, have a pin pad sitting next to them on their desk, but in many cases, it’s not on their desk. It’s on a colleague’s desk. So they have to jot down the credit card number, get up out of their seat, walk over, manually key in the card number into the encrypted pin pad, and then return to their desk to continue supporting the customer. I completely understand why ADD built it that way. It was a very intelligent decision because they wanted to keep raw cardholder data away from their environment for what’s called PCI compliance reasons. It makes total sense they did that, but we found what we think is a better mousetrap to satisfy the security needs of ADDs, but also the business operations and just general convenience for the user. And that is through the development of basically a web page, which we call Tiger Link. It’s not readily available. If someone types in Tiger Link, they’re not going to find it, because we’ve got it kind of hidden behind the veil, but what it is, it’s, I don’t know, I’m not comfortable calling it a portal because it’s not. There’s a lot of great portal companies out there like PriMedia and others who build wonderful products. This is a simple fix to eliminate the M130 pin pad. So if a customer service person again receives an inbound phone call from a customer wishing to make a payment, now, without leaving their desk, they could pop open a new window on their computer, log into Tiger Link, which in turn links through SmartConnect into the ADDs environment. It can take that credit card payment and will automatically flow through to ADDs, post to the customers transaction history, and the dealer will get payment the following day, just like they do today through the encrypted pin pad. Furthermore, it is stored in our vaults, securely, fully encrypted, for subsequent use. So if someone wishes to put themselves on a budget or do installment payments for a new heating system, that card’s there ready to be used, and the dealer can tap it and go forward as they normally would.
Brian: Well, can you talk about what went into the development of Tiger Link?
Rob: Sure, again I’ve got to credit Matt, because he really rolled up his sleeves, and we’ve had a weekly meeting for almost a year to get things ironed out. Today, it’s fully functional. Matt has 37 users in his environment across 24 or 25 offices now using it. They’re loving it. They’re high fiving him whenever he walks through the office, “thank you very much for simplifying our lives!” But the development really had to do with making sure that we properly integrated with the ADDs environment, making sure that fields were properly mapped, that, when a payment went through, it went seamlessly into the right place and was reflected properly on the customer account. And then we had to make sure that we had all the data security in place to not increase liability on that end, so there was a lot of behind the scenes work to make sure that it was a seamless integration, that it was secure. And then there’s just the user interface that we really worked hard to make simple. The beauty of Tiger Link is its simplicity. When you open it up, you’re like, “oh, that’s not much.” Reality is there’s a lot behind the scenes. What happens is, so let’s say Mrs. Smith calls up. She’s ready to make a $100 payment on a fuel delivery she just received. The ADD CSR would look up in the ADDs environment that customer’s account number. They would then, using their mouse, copy that number and then paste it into Tiger Link. When they hit enter, it’s going to automatically bring up that customer’s record within Tiger Link through the SmartConnect interface, and it will list all cards already on file in the ADD environment so that the customer can choose to use a card already on file, or they can enter a new card, which, as I mentioned, will be stored for subsequent use. They then enter the dollar amount, but it prompts them first for the amount to be paid. It shows the full balance due, and there’s a default value there. You can pay the full amount due, or you can elect to pay a lesser amount. Once that dollar amount is defined, you hit enter, and she’s done. Payment complete.
Brian: Can you talk about the user experience with Tiger Link?
Rob: Sure. I think basically it’s an efficiency tool. Like all these solutions online, they’re really tools, and they’re designed to help their user, and that’s what this does. It’s a way to simplify the process of taking a payment, which in turn results in a better customer experience. You eliminate the risk of user error by transposing numbers. You eliminate the risk of having credit card numbers written down on index cards that might be floating around the office. You eliminate the need to have M130 pin pads distributed throughout your organization, which, by the way, break – people spilled coffee on them, they get pushed off a desk and have to be replaced. Fortunately, Tiger Link, since it’s a web based solution, is not vulnerable that way, so the user experience is one of ease and simplicity. Open up a window, pick a card of choice, enter a new one, put the dollar amount in and hit Submit Payment. And that’s it – quite easy.
Brian: Well, while everything sounds fantastic, I’m sure one of the first questions that everybody has on their mind is the costs involved, so would you care to talk about some of that?
Rob: It cost us a pretty penny to develop it, but we did it because we want to be perceived not only as the only independent family-owned credit card processor out there that takes their phone calls on the weekends, but we also want to be perceived as a cutting edge technology solutions company. So, when we saw this opportunity, we said this is something worth doing. It’s going to help not only Herring, but we think it’ll help other ADDs users. And in the spirit of being a value-added credit card processor to our customers, the dealers out there, we’re offering Tiger Link for free. It costs the dealer nothing to use Tiger Link, provided they process their transactions through us. To see if Tiger is a good fit, it’s quite simple. We would just ask that an interested dealer send us a copy of a recent month’s statement. We’ll put together a simple analysis to confirm that we can in fact process their transactions for equal-to or less, in most cases it’s less, than what they’re currently paying today. In about 24 hours it will be live with us and Tiger Link will come along for the ride. Again, provided they have a SmartConnect interface. Those dealers that aren’t using SmartConnect would need to turn that feature on through ADDs, but, if they have SmartConnect, we’re ready to roll.
Brian: So Rob, for those who want to learn more about Tiger Link, how can they reach out to you?
Rob: The easiest way is to reach out to me personally at Rob@TigerProcessing.com or call me anytime on my cell phone. That number is (617) 892-3256 and, rest assured, I’m not the only person over at Tiger. I’m pleased to say we are 10 people strong, and it used to be an old elementary school house in Kingston, Massachusetts. We’ve got tin ceilings and hardwood floors, and we all go home to walk our dogs at lunch. But we’re there, ready to help whenever anybody calls to learn more about Tiger or to seek support going forward.
Brian: Excellent. Well Rob, thank you so much for taking the time to speak with us today.
Rob: It’s been a pleasure. Thanks for the opportunity.
Brian: To keep up with the latest happenings at ADD Systems visit addsys.com/blog, or connect with us on social media by following ADD Systems on LinkedIn, Facebook, Instagram or Twitter. If you have any questions about ADDcast, feel free to reach out to us at ADDcast@addsys.com. Thanks for listening. Have a great day!
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