OB Rawls | Executive Profile | ATLANTA TREND

A Winning Transformation

By Robert Green

A lot of changes have taken place at iPayment since OB Rawls took over as CEO and President in November of 2016. Under his guidance, the company has raised $550 million in new bonds and converted $250 million from debt to equity. iPayment has now experienced three consecutive quarters of revenue and EBITDA growth. Accounts on file, average size of transaction and merchant processing volume have all grown.

“It’s all been fundamentals,” says OB, “we work as a team and execute together.”

OB Rawls grew up on a farm in Washington, N.C. He jokes that OB stands for “Odd Ball,” but it’s actually O’Bealie, a name that first belonged to a Scottish ancestor who came to America. Rawls’ grandfather went by Bealie, but was often called “Billy.” That didn’t sit well with him.

“He said, ‘Just call me OB; that’s what stuck,” Rawls says. “The unfortunate part about it is not having a middle name.”

Although Rawls has a son named O’Bealie, he and his wife also gave him a middle name so he is not the fifth in the line.

Rawls graduated from East Carolina University with a degree in social work and corrections, which he likens to a psychology degree because of its behavioral studies. He took his first job as a parole officer for the state of North Carolina.

Rawls did some extradition work, bringing felons back to North Carolina from other states as well as the United Kingdom, Brazil and Argentina. Standing 6-foot-3 was an advantage.
“This was the mid ‘70s, so there was still a lot of residual stuff left over from the drug era,” Rawls says.

He liked the travel, but not the complacency he found at the state level where older colleagues weren’t keen on “young kids who worked really hard.”

After a couple of years, a friend working at NCNB (later NationsBank) recruited Rawls to become an outside collector. “I didn’t know what it really meant, but it paid more money than I was making,” he says.

Rawls eventually worked his way from repo man to branch manager after attending the bank’s first branch management school. He lived in eight cities in North Carolina and Virginia and earned his Executive MBA in Finance and Marketing from Queens College in 1991.

Running the credit card acquiring program for NationsBank introduced Rawls to the payments business just as interstate banking was beginning to unfold.

However, NationsBank had some real estate loan problems and -- like other banks with similar issues -- decided to jettison its merchant portfolios because it was important to get cash.

“We created a joint venture,” Rawls says, “sold half of the portfolio to an Atlanta-based company called First Financial Management Corporation (FFMC), which also acquired Western Union. In about a year First Data came along and bought FFMC, so they got us and Western Union and helped leverage the company and grow.”

Rawls left NationsBank, where he was SVP of merchant services, to become President of Unified Merchant Services, a NationsBank/First Data joint venture that was the ninth-largest merchant processing company in the U.S.

He subsequently went to the United Kingdom to build the Lloyd’s Bank joint venture for First Data, creating Cardnet Merchant Services. That marked Rawls’ first foray into international activity.

“It was a lot of fun, especially for a country boy from North Carolina,” he says. “It put a lot of really good tools in my toolbox, negotiating with the British, learning the other cultures and that everything’s not the same way it is in Atlanta.

“It was the beginning of an eye-opening, mind-broadening process. I’d lived a pretty sheltered life, growing up and working for the bank. I was always very comfortable. I really didn’t have an understanding about how big the world was.”

Rawls left First Data to join Caredata.com, a healthcare technology company in Atlanta. He was EVP Sales and Operations responsible for $37 million in revenue. During his three-year tenure, the company purchased and integrated 20 healthcare data companies, becoming the largest physician credentialing organization in the U.S.

Rawls then spent seven years with Hypercom Corporation as SVP. He was responsible for global sales and operations teams (inclusive of software development, distribution and logistics support operations) that produced more than $400 million in revenue.

In his office, Rawls has a photo of Hypercom executives ringing the closing bell at the New York Stock Exchange.

“There were times when we were a troubled company,” he says. “We were doing really well in the public space, but it took a lot of money to grow the business.”

Rawls returned to the United Kingdom in 2006 to rebuild the Hypercom distribution network outside the U.S. He traveled to 46 countries in 2006 and 37 in 2007. That included a lot of time in Brazil working with a support business that serviced 250,000 countertop terminals.

After a change in leadership, Rawls and Hypercom parted ways amicably. He spent time in international consulting before being asked to rejoin First Data. Prior to joining iPayment in early 2016, Rawls served as Senior Vice President and General Manager, Partner Solutions, where his role included engaging with First Data’s top ISO reseller partners.

Based in California, twenty-one-year-old iPayment has always been one of the top five ISOs (Independent Sales Organization) in the US, but was struggling the past few years. The selection of OB to run the company was an important first step toward positive change, given his experience and stellar reputation for transparency and integrity. He has the respect of his peers in the industry. Says First Data Executive Vice President Barry McCarthy, “OB is a true professional who has played many leading roles shaping the payments industry. He’s a deep subject matter expert, widely admired and well connected.”  

“I began at iPayment by telling the iPayment story. First to the capital markets, then to the employees and customers.” he says. “Next we did a revamp of the leadership team.” His small management team was expanded and jobs were made more discrete. “One thing I learned from Frank Bisignano (CEO of First Data), is that you hire really talented people but give them smaller jobs with intense focus,” he says. “Because of this, we now have better numbers and higher achievement.” Other changes include a higher commitment and greater focus on the customer as well as movement into desirable verticals. Ten percent of company revenue is now from the petroleum business and the company has begun forays into smaller ticket items with stickier customers, like parking.

“iPayment is becoming more of a technology company rather than just a straight processor,” says OB, “and offering more solutions to our customers. This is the path forward for all processors, to become technology and solutions companies.” The company has recently hired a new leader of integrated payments and just launched their own payment gateway.

Half of iPayment’s sales are direct via the efforts of its own sales team and half come from partners (sub-ISOs, agents and referrals). “While we are concentrating on more organic growth, we do have some high quality partners in fast growing verticals, such as petro, hospitality, wineries and others,” he says.

With the company now steady on a path of upward growth, its board has asked OB and his team to add 100,000 new customers in the next 12 months. They have six employees in Atlanta today, all working from home, and OB says that he will open an office in Atlanta when they reach a dozen. “We’re also open to making larger investments in Atlanta,” he says.

The transformation of iPayment is a great story for the payments industry but also reflects an economic truth discovered by private equity funds some time ago – the payments business is highly responsive to better management. “Private equity loves this industry because they know that good management can get them many multiples of what they invest. It’s been proven many times in recent years,” says OB.

“We will provide all services to our business customers,” says OB of iPayment, “becoming the place where small and medium-sized businesses come to get their business solutions – credit, debit, gift, loyalty, hardware and now, merchant cash advances,” OB says. ”We recently announced the formation of iPayment Capital, offering merchant cash advances to its customers. Only half of processors have an extension like this one.”

Increased complexity in their business offerings means longer sales cycles and more complex sales. iPayment is equipping their sales teams with more training and a better understanding of what merchants need today. “We believe that selling a merchant a solution based on three or more of our products will increase the lifetime value of that merchant relationship to us by over 8 months,” says OB. “Today, a small business can look and act like Amazon if they want to. This provides the stronger returns that attract PE firms.”
SMEs, or small to medium sized businesses, are the entire focus of iPayment. “Small business today is growing in this country,” says OB, “re-energizing everywhere. More people are empowered to invest in themselves and this bodes well for our company.”

For all the changes that he has inspired at iPayment, OB attributes all positive changes to common sense and teamwork. “I’m a big believer in never being afraid to ‘inspect and correct.’ It’s a simple thing, made more difficult by the fact that people naturally want to avoid problems. I try to coach my people to look for problems and not be afraid to face them.”

“Other than that,” he says “all I can say is that I’m fortunate to be the leader of iPayment. It’s really all about the team. They have a winning attitude.”



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