NC Trend: A Raleigh company gains momentum in a critical niche of everyday commerce.

Dustin Magaziner’s cell phone rang one day this fall. The caller was the director of agent experience at PayBright, the Raleigh-based payment processing company the 33-year-old Magaziner founded while he was in college.

It seems one of the almost 1,000 agents who sell PayBright’s services wasn’t happy.

The reason, of course, was money. The company had offered a promotion: Agents who submitted certain deals by the last day of a month, would receive a bonus. The aggrieved agent had sent his deals through on the first day of the month, or a day late.

“Now, our promo was very clear,” says Magaziner, “I think anyone would say, looking at (the materials), ‘no you’re not entitled to this.’ But he thought he was entitled to the money, and you know, sometimes it’s just better to keep things copacetic. Our agents are our customers.”

That scenario helps explain much of the company’s success in the crowded, but lucrative payments processing field, the CEO says. The business has more than 15,000 retail customers nationally, 55 employees and this year surpassed $100 million in residuals paid to its agents.

Much more growth seems likely. Paid residuals, which he says are the best barometer for the company’s overall performance, are expected to double in the next two years. More commerce these days requires “point of sale” (or POS in industry jargon) technology that enables payment processing at online and brick-and-mortar retail sites. Industry analysts expect the POS marketplace to triple revenues by 2030 to the $30 billion to
$45 billion range.

Payment processing companies facilitate transactions between customers and businesses, connecting credit card and other payment channels to the appropriate recipient.

Payment processor sales agents receive a tiny percentage of the transaction, on top of the percentage charged by credit card companies. Multiplied by millions of transactions, it can be a lucrative business.

PayBright is a small-to-midsize player in an industry dominated by giants such as Square, which is owned by Oakland, Calif.-based Block, and Ottawa, Canada-based Shopify. The industry has consolidated significantly, leaving various companies like PayBright that are larger than a mom-and-pop but not a giant.

As a differentiator, PayBright hires independent agents and provides them with access to more than two dozen POS products. Meanwhile, the industry leaders employ agents who only sell their own systems.

Having an arsenal of varied products is a clear advantage, Magaziner says. It’s also how he got into the business.

DRIVE TO THRIVE

Magaziner, who says his family is filled with “serial entrepreneurs,” attended Furman University in Greenville, South Carolina, earning a bachelor’s degree in 2015. He never imagined his college free time as eating Cheetos on the couch while playing video games. Instead, he landed a job selling credit-card machines for a Greenville POS dealer.

The advent of chip readers in the early 2010s created sudden market demand. Magaziner hustled around Greenville, cold-calling for accounts and having reasonable success. But his work for several industry players wasn’t a great experience.

“What I learned is that these companies weren’t offering that much. It was basically, ‘here’s a merchant application. Here’s how you sign up a business with us. Good luck.’”

Magaziner thought there was a better way, so he formed PayBright in 2012.

PayBright is not a technology company, but the first step in empowering its agents is making sure that they have solid payment process software systems to sell.

A significant number of the company’s staffers work on the  “POS Desk,” which focuses on meeting the agents’ technology needs. The desk staff solves problems, conducts demos, and helps integrate POS products with a client’s other systems. The latter approach is rare in the payment processing industry, says Magaziner.

“An agent might walk into a grocery store, where all these systems are in place,” says Magaziner. “Can he come up with a (POS) solution that will tie into what they’re already using for inventory and so forth? Can (the company) integrate without having to switch anything? The bigger the business, the more expensive and costly it becomes to change POS or hardware. But, they might be willing to work with us if we can make that work.”

Most payment processing companies don’t want to get involved in the time-consuming process of technical integration, he says. So if a sales agent asks for help, the typical answer is no.

“That’s a bad idea because it puts all on the agent’s shoulders. That’s not helpful for anyone,” he says.

While 35 of the company’s employees work in Raleigh, Magaziner’s senior staff includes people who live in Atlanta, Houston and Montreal.

FIGURE IT OUT

In March, PayBright invested in Figure, a New York-based mobile payment software company that specializes in restaurant POS systems. Restaurants make up about a quarter of PayBright’s client base, more than any other vertical.

The investment gave PayBright an exclusive with a competitive system in a key industry, and augments its agent’s abilities to find solutions in other industries.

Jin Woo Park, the founder and CEO of Figure, expects “to achieve 500%-plus growth in year over year partnership sales,” according to a press release.

Magaziner routinely sends his personal calendar to PayBright’s vendors, so they can sit in on video meetings where he discusses products, trends, and strategies. At one time, he said each PayBright sales partner had his cell phone number.

“I’m not quite sure that is still true. I wish it was, but it’s not as easy with a larger business.”

PayBright has a happy problem of struggling to keep up with inquiries from potential new sales partners, Magaziner says. Most agents work on their own, or are part of small teams that have intimate knowledge of an industry.

“(Landing new agents) is the secret sauce for us,” he adds.

Magaziner says his company is attractive to potential buyers, but the prospect of a sale is not his ambition.

“I’m entrenched in this industry,” he says. “There will be a lot of changes in the years ahead: Will crypto play a role, A.I., etcetera. But I think all that is just an opportunity. And we’re in a good position. PayBright has no debt, no external investors. And, hey, I’m 33. So retirement, and so forth, it’s not on my mind right now.” ■