Scott Meyerhoff | Executive Profile | ATLANTA TREND
Creating Commerce Through Prepaid Solutions
By Karen Rosen
Scott Meyerhoff grew up in Edison, New Jersey, which calls itself “The Birth Place of the Technological Revolution.”
With that revolution still going full steam ahead, what would Thomas Alva Edison think of InComm, the Atlanta-based prepaid and payments company where Meyerhoff is Chief Operating Officer and Chief Financial Officer?
“He’d be proud of our innovative roots,” says Meyerhoff. “InComm has 159 worldwide patents and really at our heart we’re a technology company that enables the retailers and the partners to stay relevant, create commerce and make things more convenient.”
InComm invents new commerce solutions to reward consumer loyalty, drive foot traffic at retail and provide unique gift-giving opportunities. However, unlike Edison, whose trail-blazing work is well-known, InComm operates under the radar.“We’re involved in many of the products and services which people buy and use every day,” Meyerhoff says, “but nobody knows we’re the ones doing it.”
Not only will InComm print 750 million plastic cards this year, the company also provides digital and mobile solutions to reach beyond the ubiquitous card racks and into e-commerce. InComm has almost 2,000 employees in nearly 30 countries.
“This is not a U.S. phenomenon; it’s a worldwide opportunity,” Meyerhoff says. “We are a network, not dissimilar to what Visa, MasterCard or American Express do. But unlike other networks where they charge you something, with us everybody makes money.”
A retailer devoting space to a gift card rack gets a margin for selling the product. Then the bearer of the card goes to a store or restaurant and usually spends more than its value, so that’s a win for the provider.
Meanwhile, InComm is paid for making the transaction, moving all of the money and handling the racks, displays, merchandising and planograms, the science of deciding where the cards go on the rack. InComm will process more than $30 billion dollars in transaction volume this year, a six-fold increase from six years ago when Meyerhoff came on board.
“We’ve created categories of payment and we’ll continue to create categories of payment,” Meyerhoff said. “Today, InComm is a proprietary closed loop network which sells more per square foot than anything in retail today. It’s one of the fastest growing categories in retail. And it’s not just retail, it’s the dot.com sites, and any places that avail themselves of the opportunity to sell something.”
InComm was founded in 1992 by Brooks Smith, who is now president and CEO. He had an idea for helping people who did not have long-distance service following deregulation. Noting that Europeans used telephone cards, Smith saw a market opportunity and created a system to activate and sell those cards in the U.S.
“InComm was Interactive Communications originally, but InComm now is Innovative Commerce,” Meyerhoff says. “What we’ve evolved to is continuing to look at consumers and their needs and requirements and provide products and services to make them part of the mainstream economy and not disenfranchised.”
InComm partnered with Walmart to roll out prepaid wireless cards, which were integrated into the retail point of sale.
Joining forces with Apple, InComm was the first to offer iTunes gift cards and even today represents a large percentage of all iTunes cards sold in the world regardless of medium.
The Visa, MasterCard and Discover gift card category also originated with InComm. Under its brand Vanilla Visa, InComm is the largest seller of open loop gift cards, meaning they can be redeemed anywhere.
Gaming cards, such as Xbox, Nintendo, Valve/Steam, Sony Playstion, League of Legends, Blizzard and Minecraft are the most popular. According to surveys, Meyerhoff says, “The No. 1 requested gift for a holiday is a gift card.”Father’s Day and graduation are the biggest non-Christmas occasions for a gift card, but on Mother’s Day gift cards are also now the most requested gift.
“In the early days, if you gave Mom a gift card, you weren’t a good son,” Meyerhoff says. “You weren’t thoughtful, you didn’t take the time, but for Dad, that was fine.” These days, gift cards are less of an impulse buy and more of a destination. “They’ve become such a part of the fabric of everyone’s life,” Meyerhoff says. “It’s not just gifting, it’s also self-use now.”
Because the majority of gift cards are purchased by women, InComm devotes time and resources to making packages that are so appealing they will “pop off the rack,” Meyerhoff says.
“It needs to be giftable. It needs to have the look, the feel and the touch, which is why we’ve got dozens of in-house designers to put everything together to make it an appealing consumer product.”
People also like the security of a gift card because it eliminates the necessity of putting their credit cards online or using them at a specific store.
A prepaid card is also a means of digitizing cash.
“You can bang a $20 bill on your computer screen and you’re not going to get to buy anything,” Meyerhoff says, “but if you have a Visa gift card, you can do all the shopping you want to do online.”
InComm has also innovated technology that allows cards to be activated using a strip of data on the back, so cards have no value until activation. A similar loss prevention system scans phones at the point of sale to activate them, meaning they no longer have to be tethered to the shelves.
However, if someone loses a gift card after it has been activated, that’s just tough luck.
“In many cases, we don’t know who they are,” Meyerhoff says, adding, “What happens if a consumer drops a $20 bill into a sewer grate? Do they go to the Federal Reserve and seek the money back?
“You can’t legislate against consumer behavior. You give them every opportunity to have a very fair experience and then after that, it’s on them.”
Meyerhoff was raised with a strong work ethic instilled by his father, who had a small accounting business, and his grandfather, who worked on the railroad for 45 years. “It was basically a culture of ‘You gotta earn it, you gotta work for it,’” Meyerhoff says. “Don’t care about the result as long as the effort was there, because generally the result will come with hard work.”
He majored in accounting at Penn State and moved to Atlanta to work for Big Four accounting firm Arthur Andersen.
“Today I believe I’m a recovering accountant,” Meyerhoff says with a laugh.
Not only has his accounting background helped him throughout his career, Meyerhoff also has been mentored by CEOs and company founders that he says, “were innovative and had a gut and a feel in addition to just logic.”
Those executive leaders were John Collins at The Intercept Group, Jim Schaper at Infor Global Solutions and Smith at InComm.
“All had strong personalities and none of them ever looked at things one way,” Meyerhoff says. “They looked at things from four, five or six different angles and it broadened my horizon and my ability to interpret situations. You can’t take the easy way out and take the first answer; you’ve got to look at it in multiple directions.”
At age 29, he took his first company public as CFO. That was The Intercept Group, a bank technology processing company.
After growing the company and selling it, he moved on to Infor Global Solutions, an ERP supply chain software vendor worldwide, as executive vice president and CFO. The company had large operations in Europe, giving Meyerhoff his first view of international business.
Seeking to cut down on travel, he co-founded The Intersect Group, which focused on consulting and staffing in finance and accounting. “We grew that business from nothing to $50 million in revenue in four years,” Meyerhoff says.
Intersect was named to the prestigious Inc. 500 list and was one of the fastest growing companies in Georgia.
Through Intersect, Meyerhoff met Smith at InComm. After helping him on a couple of projects, he came on full-time as CFO, continuing his streak of only working for companies that start with “I.”
“The industry was fascinating,” Meyerhoff says.”It was such an untapped market. We had the technology, we had the knowledge and it was just a group of people that wanted to succeed.”
He tackled the back office operations of the company, shoring up the finance and accounting group. That quickly led into the financial aspects of InComm’s contracts, its underlying costs and vendor relationships. As Meyerhoff moved more into strategy and direction, he took on the COO role as well.
He says an employee taught him long ago that he couldn’t do everything himself or he’d implode. “He said, ‘Give (your staff) clear and concise directions and trust them, because you are not scalable as one.’ And I’ve hired people smarter than me, given them direction, and then let them go create, while making sure that they are still cognizant of the goals and missions of the organization.”
During his career, Meyerhoff has been part of some 100 mergers and acquisitions. Recently, InComm acquired point of sale service SIRAS.com from Nintendo of America. SIRAS connects to many of the retailers that are already InComm partners. While Incomm combats loss prevention on the front end by scanning a bar code at purchase, SIRAS handles the back end. If a product leaves the store without being purchased, it can’t be returned for store credit.
“That’s just another one of the applications through the point of sale that our network can enable,” Meyerhoff says.
In the Meyerhoff household, his wife Debbie makes most of the gift card purchases. They live in Atlanta with their three children, ages 12, 8 and 7. Meyerhoff coaches baseball and watches his children play soccer and participate in gymnastics. He is on the Chick-fil-A Peach Bowl team relations committee and represents the bowl at college football games.
Meyerhoff is also on the board of the American Transaction Processors Coalition. “We are trying to explain what payments really are to head off what I call ‘laws of unintended consequences,’” he says.
As payments evolve to include the Google Wallet and Apple Pay, the infrastructure is still built around transaction processing companies. InComm can connect its data to any device to enable the consumer to spend money.
“Apple Pay justifies the payments industry and especially Georgia’s position in the payments industry,” Meyerhoff says. “We’re excited because I think everybody realizes the payments industry isn’t an easy business. Atlanta specifically and Georgia more broadly are really the epicenter for payments innovation.”
At InComm, there are conference rooms with wall-to-wall whiteboards, brimming with new ideas.
“I think one of the reasons that InComm has been so successful is we’re not afraid to reinvent ourselves fairly regularly,” Meyerhoff says. “We invest in new categories, new countries, new opportunities, many of which if we took a short-term view wouldn’t be viewed as a smart investment. “But our goal has always been to be in this for the long haul and to give our retailers and partners all the products and services to stay relevant in a changing world.”
The newest trend is digital gifting, where consumers have a digital code sent to them instead of a physical card. “Digital gifting will continue to increase in popularity because of the ease of use,” Meyerhoff says.
InComm is currently working on a product to allow people with a monthly premium under the Affordable Care Act to take their bill into a CVS drugstore and pay by scanning a bar code.
There is no fee.
“CVS had an idea, we said, ‘We have the technology; we can enable it,’” Meyerhoff says.
While CVS hopes to acquire a pharmacy relationship, InComm is content to continue operating behind the scenes.
“One of the things we always like to say is, ‘When no one knows you’re there, it’s probably a good thing,’” Meyerhoff says. “That means it worked.”
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