Thursday, February 23, 2012
He eventually sold Superior Bankcard Service for $100 million and started a new company, Innovative Merchant Services, in 1999. Four years later, Intuit Inc. acquired IMS for $116 million. Kaplan stayed on to head Intuit's payments division after the merger, and from 2003 to 2009, he grew the division's yearly revenues from $24 million to $400 million, and expanded the work force from 95 to just under 1,000 employees.
Fast forward to 2011. Ed Freedman, TMS Chairman and founder, consulted with Kaplan about his company's search for a new CEO. "We wanted a person that's led large merchant account acquiring organizations, a person that really understood it all – sales and marketing, operations, finance and technology," Freedman said. "We wanted an industry veteran, a person that everyone knew and respected. In summary, we wanted a 'Joe Kaplan' – a real rainmaker."
And they got him.
So when the man who already built two companies and sold them for a combined $216 million takes on a new challenge leading another payment company, the obvious question is why?
"Being retired isn't all that it is cracked up to be," Kaplan said. "I am not hardwired to be idle. I actually enjoy working and figured that I should do something I know and love. Doing something just because you love it and not because you need the money is a great place to be and from that point it was easy."
Kaplan added he knew what it was like to start a company and was now looking for a different opportunity. "I wanted to lead a company that had a lot of runway where I could add value coupled with having fun at work with partners that were smart, aggressive and that I could trust." He said TMS was a company that met those aims and was looking to expand.
Kaplan said TMS will make large investments in existing programs, sales channels and technology. "Our new mission statement, which will dictate our strategies and priorities, is to become 'The premier global provider of easy to use business and payment solutions that can be used on any device, anywhere, anytime which inspire and empower our customers' success,'" he noted.
The new CEO believes TMS "is in a terrific financial position. It generates an enormous amount of free cash flow. We are looking to reinvest this money to grow the business aggressively." The cash will be turned into upgrades and improvements in program and product offerings, customer boarding (including enhancements to application processing and underwriting), and technology, Kaplan added.
"In the end, we are going to create a big gap between us and the rest of our competitors in regards to – world class customer service, ease of doing business and sales partner support," he said. "In addition to having the best program offering, we are going to provide technology, products and service levels that will be the envy of the entire industry."
Kaplan believes TMS sales channels are depending on the company to take the mission statement to heart. To this end Kaplan hired Jeff Broudy, who formerly worked for him as head of Intuit's Payment Sales Division.
"Jeff was one of the first people I called, when I decided to get back into the bankcard industry and to join Total Merchant Services as its CEO," Kaplan said. "His experience of building the payments division at Intuit, only reinforces the many reasons that I am excited to have Jeff as a key member of our leadership team."
There have been significant changes in the payments industry since Kaplan stepped down as the lead of Intuit's payments division in 2009. How will Kaplan and TMS adapt?
Kaplan realizes there are new dynamics in the industry. "The payments landscape is not immune to change, as most everything evolves and looks different," he said. "Change is actually a great accelerant to growth and allows well positioned companies to take advantage of the many opportunities that are created as a byproduct of that change.
"The most amazing opportunity that is created is that most companies will continue to play where the puck is and not where it is going to be. Innovation, guts, insight and the fundamental quest to provide an amazing partner and customer experience will separate companies who will enjoy the new world."
Kaplan said there are no plans to sell the company. "We have a great strategy to succeed and plan on growing aggressively over the next five to 10 years," he said. "There are simply too many opportunities in front of us and way too much fun. Truly, this is the most fun I can have with my clothes on."
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