Credit cards are convenient for consumers, but less so for Canadian businesses who face among the highest fees worldwide to process the transactions. This was the impetus for Chicago-based FeeFighters’ April entry into Canada under the direction of Marcus Dagenais, VP of business development–Canada. Targeted at small- and medium-sized business, merchants provide transaction details through FeeFighters’ website, which generates side-by-side bids from vetted processors, based on transparent pricing rules. The idea is open competition leads to lower fees. Free for merchants, FeeFighters takes a 50% cut of the processor’s net margin on transactions from successful matches. Toronto-based Dagenais (he is also director of sales and marketing at unaffiliated processor Caledon Card Services, which serves larger corporate clients) says FeeFighters has signed most of Canada’s processors in the SMB space. To date, he says FeeFighters has closed 22 Canadian deals from 134 auctions and hopes to increase that to 350 deals from 2,000 auctions by end of year. With plans to offer comparison shopping of other business services, the currently-private company is projecting US$1 million in revenue for 2011, up from US$200,000 last year, thanks to the Canadian launch and incremental American growth.
What is the greatest challenge currently facing FeeFighters in Canada and what are you doing about it?
The greatest challenge I would say is gaining critical mass and brand recognition. Anybody that I introduce to the concept thinks it’s great, whether they be a bidder or a merchant. But the challenge really is gaining the critical mass in Canada where merchants think of us off the top of their head when they’re thinking about business services related to credit card processing.
We’re spending a lot of time and effort on viral marketing. The FeeFighters guys are the experts in SEO, blogging, search engine marketing, and some video marketing that we’re getting into. All that kind of stuff is the main medium we’re trying to get in front of people right now.
Who else—person or company—do you admire for their innovative work and in what way?
I like the concept that Square is bringing to the payments market—the idea of bringing merchant accounts to everybody, and the idea of peer-to-peer payments. I think it is very intriguing and I don’t think it’s going to go away anytime soon. On that same basis, [I’m interested in] NFC technologies, which is near field communication—the whole idea of essentially the tap and go credit cards, or having a chip in your phone … I think there’s a few companies out there who are going to emerge and it’s going to be game-changing.
How would you describe your leadership approach or style?
I’m very much for everybody, regardless of titles, to bring forward their ideas. Don’t make me ask for them. I want to know about them and I want you to feel comfortable to bring them forward. Because a lot of the best ideas come from the people who do the work that I don’t do, which is the day-to-day dealing with merchants.
How effective is the Government of Canada’s voluntary code of conduct for credit card processors, and how do FeeFighters’ services align?
Personally I have seen some of the major acquirers [financial institutions that accept credit card payments on behalf of merchants] in Canada adjust their statements so they are in line with the code. At FeeFighters, we’re basically creating rules that we feel are appropriate. They’re certainly in line with the code and they actually go one step further. We disallow things like early termination fees or cancellation fees. And that’s just a business decision for us. So if you’re a bidder and you want to bid with us you have to abide by those rules. At the end of the day the whole code is promoting transparency. It’s not the fact that you can’t charge a premium fee if you’re providing a premium service. It’s just that the merchant deserves the right to understand what the premium is that they’re paying without having to read through paragraphs and paragraphs of fine print.
What challenges or opportunities do you foresee in the adoption of mobile payment systems like Google Wallet?
I love the technology, I love innovation in payments, but I certainly see the small ticket peer-to-peer payments or the tap-and-go type of technology as a double-edged sword. The technology’s great, but the security is sometimes being put on the back burner in favour of innovative technology and that’s scary. Especially given some of these security breeches we’re seeing lately … We’re going to get the technology, we’re going to take three or four steps ahead and we’re going to have to take one step back to make sure it’s secure and make sure people’s payment data is secure. Because people don’t care about using the latest cool gimmick to pay for their coffee if their credit card number’s going to get stolen.
You’re an avid cyclist. If you could tour anywhere in the world on your bike, where would it be and why?
I’ve always wanted to do a race called the Absa Cape Epic. It’s a seven- or eight-day mountain bike race across South Africa. I just think it’s a very raw place, with the game parks and all these animals that we traditionally only see in zoos just roaming free, and I think to ride in that environment would be pretty epic.