Building Business Value in the AI Era

Speaker A: Foreign

James: shepherd here with another edition of the Merchant Sales Podcast Today. Got a great episode for you with Lane Gordon back on the podcast. Lane is a business broker in the industry. He's had a lot of experience in AI as well as payments. So we talk about the role of software and payments and how to build business value for an eventual exit. We also have today in Payments where Patty Murphy gives us a bunch of great tips and insights on what's happening in the industry today. Uh, the audio on my intro is probably going to be a little bit off. I'm doing this from my house today. I haven't done that, I don't think ever. Uh, but I really appreciate it. And yeah, uh, thank you so much for taking time to listen to the podcast. Also want to mention our sponsor, Nativia. Head over to nativia.com ccsalespro to learn more about all the cool things that they have going on. With that being said, let's dive into this edition of the Merchant Sales Podcast.

Lane Gordon: Welcome to the Merchant Sales Podcast.

James: Hey everybody. I'm here today with Lane Gordon, CEO at 733 Park. How you doing today, Lane?

Lane Gordon: Great. Great to see you again, James.

James: Absolutely. Great to see you. Great to have you back on. Uh, you know, Lane, I thought we would start out because it's been a little while we had in the podcast. It's been a little while back. For those who don't know what 733Park is or what you do, maybe we could start out with that, give us a little introduction into like, what you do and, and you know, how that kind of fits into our industry.

Lane Gordon: Sure. Thank you very much. So 733 Park. We specialized our, um, we started off and still one of our core specialties is the payment space. So we work with ISOs, we work with, uh, either ISOs or FinTechs or ISVs, looking to, um, bring in a strategic partner or looking to, um, have an exit or, um, anything in between. And then of course, in the course of working with ISOs, we have folks that build up merchant portfolios and there's a value to that, those residual streams in the market. And uh, we handle those transactions as well. And just one other thing beyond that, we deal with a lot of, uh, tech companies these days. So we're doing a lot of, uh, A.I. deals. We've got, uh, almost, uh, one every other month I think is kind of the track that we're taking right now, um, that we're coming out and we're actually closing on. And so it's Very, very exciting times and frankly AI is also helping to empower a lot of these payments companies. So I, there's going to be um, contrary to the doomsdayers and the naysayers, I think there's actually a lot of positive excitement for people.

James: Yeah, no, I couldn't, couldn't agree with you more. Um, so let's do this. I want to get into AI and some kind of the sexier things that everybody wants to hear about. But before we do that, let's talk about more of the legacy side of portfolios. I know you in recent history here, you had a big buyer you were working with, it was scooping up portfolios. Talk about that a little bit and talk about what is driving that interest in payments portfolios which again can tend to be a little bit, maybe seem a little old fashioned from a capital perspective. So talk about what's driving portfolio values and what people need to know if they want to build up a, you know, just a traditional payments portfolio that would be, you know, sellable.

Lane Gordon: Yeah, no, thank you. That, that's great. So it's, it's, it's very, very interesting to um, to try and dissect why people year after year are continually interested for, for various reasons. Sometimes it's the same as prior years and other times it's something different why they're interested in acquiring these portfolios. And if you were to ask me what the latest surges in uh, 2026, I would say maybe a combination of a few factors. One um, is that we're in as we all know now an inflationary environment. And in an inflationary environment, um, you know, the reality is, is that some of these portfolios are just going to grow by virtue of inflation itself and the underlying merchants, um, and whatever their merchants are selling who are marking up their prices. So I think to some degree pure financial buyers maybe look at merchant portfolios as a hedge, um, where they buy it and maybe the revenue stream grows just by virtue of um, provided again that there's not a lot of attrition, uh, and that's a whole other subject. But uh, provided that the uh, merchant revenue on a per merchant basis continues to grow. And so um, that's one of the reasons, the other reason I think is that there's some interesting um, fintech AI blockchain solutions or combination thereof that still um, see some of these merchant portfolios, uh, or merchants as being something that they may or may not be able to upsell into um, non competing products, additional goods, services, etc. And so, um, you know, even if they're buying a merchant portfolio and they're, they're following the terms, they're respecting the terms of their marketing agreement, uh, that they purchase this on, they still may find added value in pushing other products to these people. So, um, that's another thing. And then of course, you have, you, you always have larger ISOs, you know, this, this ecosystem within payments. You have, um, you know, the, the, the, the bigger fish eat the little fish and, and, and even bigger fish eats them. And so, yeah, what happens is, as people are, uh, oftentimes getting ready for exit, um, what they may seek to do is they may seek, in addition to growing organically their ISO or isv, they may also seek to, in fact add some inorganic revenue through these purchases of different merchant portfolios or revenue streams.

James: Yeah, uh, super interesting. So I have so many topics today that I want to touch on with you, and I just want to get your thoughts because you see the market, I think, in a very different way than a lot of my guests would, because you get to see so many different deals happening. And also, again, you're on this technology. One of the first topics I want to Talk about is SaaS versus payment monetization from, from a valuation perspective and building a business. So it's so interesting, the timing of all this. I'm actually going through this big strategic remake of, of Stackably right now, which is one of the businesses that I own. And you know, there's this, it's so interesting is when I go to capital sources like, you know, I want to get debt, right? And I'm like, okay, well, I'm getting debt based on a multiple of my recurring revenue.

Lane Gordon: Right?

James: Well, what's interesting about that is the banks seem to value the payments recurring revenue more than the SAS in some cases, which I find fascinating. But then if you actually go out to, let's say, venture capital or something like that, and they're like, well, are you a technology company? Because we, you know, and then it's like, well, where's your SaaS revenue? So I guess my question is, when you look at these different deals, how do you think about. Because, because again, there's, there's different ways to skin that cat. You can go real heavy on SaaS, but maybe not as much in the payments margin or give the payments margin away for distribution, you know, like the clover model, you know, or you can go like more on the payments, like a square model with the free software. What are your thoughts on this interplay

Lane Gordon: between these two yeah, that's a great question. And um, uh, to one of your points within that, um, you mentioned that, uh, uh, you mentioned about the banks valuing these things and I was laughing when you said that comment because, um, at least in my experience, oftentimes you have to educate the banks as to what a merchant portfolio even is, which for 20 plus years has seemed absolutely absurd. How can a bank not understand that most of them just miss out on all that wonderful business that all these great ISOs and great agents are locked into. They just don't get it. And they still don't get it usually.

Speaker A: Right.

Lane Gordon: So, so it's amazing you encountered one that actually was able to understand it.

James: Yeah, there are very, very few.

Speaker A: Right, exactly.

James: But then, but then it's, it's almost like then the ones who do, once they do get it, then they go, well that's amazing. We love it. Well, let's, let's use that. The SaaS revenue, well, that'll come and go. But let's go into this payment side and you're like, I don't know, I just find it fascinating.

Lane Gordon: Yeah, exactly. So it's interesting to me because um, we have spent a lot of time as a firm really digging in deep on AI. And so what I can now see very clearly from an M and A perspective and I'll bring it back to payments, um, you know, to me it's kind of like um, I've been doing this 20 plus years putting together deals, transactions, merchants and acquisitions. But I look at it somewhat akin to kind of like, you know, if you look at the sun in the sky at any given moment, right. It's shining on something else. And what I bring up with that example is this, um, you know, a few years ago, maybe a decade ago, I think legacy payments companies, you know, that the sun was shining and then the sun started moving towards uh, ISVs and then the sun started moving more towards SaaS models. And now of course the sun is shining on AI. Um, but what I think is critical for people to understand right now, if they have a SaaS company, if they have an ISV, if they're thinking, oh geez, I'm going to build this the next five years before I take my value and take my chips off the table. I would put forth something that I think there's a six month to maybe 18 month window on some of these SaaS and ISV plays to take your chips off the table today. And let me explain why that is. Um, if you take a look at ChatGPT Gemini, Claude, uh, and some of the other AI models. What's happening is they are becoming super apps. So right now they all offer these, what's called MCP connectors, where, um, you'll notice more and more of these SaaS models or individual apps that are out there, in order for them not to become a dinosaur tomorrow morning, are immediately offering up better than API, an API call, they're offering an MCP connection. And so now you can use your ChatGPT or Claude or whatever it is to actually control that app directly. Um, but at a certain point, some of these apps, you're just going to be able to tell Claude, hey, go out there and figure out who's doing this and that and everything else. And Claude's actually just going to. Which it can do in many cases already today. It's just going to write that app for you. So what's interesting to me is that, so then what has value going forward? Um, in terms of some of these SaaS companies and all that, it's going to be something that either for whatever reason, there's a very sticky customer base, a very niche vertical, or they're providing something, some sort of service that's so granular that it's still going to take a while for AI to catch up. Um, and there are these cases, or maybe they're bridging some sort of, uh, bridge between something that's a legacy product and uh, the uh, 2026, 2027. And so therefore they're one of the only bridges out there that makes this conn. And that's somewhat unique. And so it's, people have to start taking a hard look. If they're reliant on pure SaaS revenue, they have to look at their SaaS product and make sure that is this something that somebody's going to replicate very quickly using AI. So just to throw out a few other, if you like, a few other examples within that. So, for example, in some senses, um, you know, you look at CRMs, right? And there's 5 million CRMs for sure. There's going to be. And there already is a huge consolidation among CRMs. Um, can the AI replicate that? Yes. But the stickiness is we already have a lot of our data and our notes and all these other attachments and everything living in those CRMs. So for the time being, in the foreseeable future, a lot of those CRMs, it's probably more useful to people that they can take the AI, control their CRM and quickly look stuff up faster than them manually pulling down menus and trying to find it themselves that's got value today. Does that have value in five years? Can I replicate my CRM in five years? Maybe I can, but I don't think that's on the table in the immediate future. But there's other things like there were, there were other services in fact we even use internally to collect data on different things that now uh, I can have AI out there crawling in the background while I'm doing 300 other things and it might come back actually with better data than some of these data services that we were paying through the nose to subscribe to.

James: Right.

Lane Gordon: So that's kind of where it's going. I think people have to do a. And uh, I've gone a little bit off topic but I think people have to do a thorough evaluation in terms of if they're, you know, they have a SAS model or something that they're clinging to, they have to just look at it closely because it has value today for sure, it's a multiple of ARR, etc. But they need to look at it and take an honest uh, assessment for themselves. In terms of it has value today. Is it really going to have value in three years? Because this isn't 2020 or 2021 where we don't have automation and all sorts of incredible self intelligent tools on the horizon and already coming out and that God only knows what's going to happen next. Um, it isn't like that. So we didn't have that five year Runway let's say to 2026. Time is limited. So, so back to you. Sorry about that.

James: No, no, I love it, you know, so it's interesting. I'll, I'll, I'll play, I'll play devil's advocate and agree with you at the same time. So, so um, on the software side of it, which you know I'm a, I'm a developer at heart, you know, and so I don't do as much of that these days. But um, but you know what's interesting is, is I look at vertical specific ISVs, right? So CC storage, I'll use that as an example. One of the storage industry, I think we're the fastest growing right now. And what's so interesting about it is so we just got done building the mcp, right? And you know it's funny because like I have these conversations with people all the time and I'm always like, I agree but not me, this kind of. Right. In other words when I look at the self storage industry and what we built there. And then I look at what I'm able to build with let's say replit or something like that, I go, there's no way, uh, I don't even see it 36 months down the line. What I mean by that is there's so much of this like just nitty gritty data structure components. Now of course, we use AI to build all of it now with Claude. Right. As far as our developers are like way more productive. But as far as me saying to like Codex, go build this. Well, maybe. And I think it's interesting because you could build it for your individual use case. Like I think that's where the direction it'll be like, uh, I'm a larger operator, I've got a hundred, you know, locations of self storage. Well, I'm going to use something like a replit to build a software that only I use for my own business. Yeah, it's going to be very difficult for me to build something that everybody can use. That's uh, that, that may not be possible definitely for a long time. But so it's interesting to think about that individual use case. But again, most operators aren't going to do that because they're, they don't want to. It is still technical. So it's like, it's weird. Like when you look at a big picture and you use something like replit, you kind of at the high level you go, oh my goodness, this is going to wipe everything out.

Lane Gordon: Right.

James: You know, and, but then when you go, okay, but what about my uh, business and you know, the depth of knowledge and experience and connections and everything in there. So I push back in that way because I feel like everybody I know who's like really deeply into a vertical, they aren't as scared as you would think they would be. Do you know what I'm saying? Like, because, because it's like, yeah, there's so much, it's hard to explain, but it's like, man, there's just so much depth here to like the, the database structure. It's like AI isn't going to wipe me out in, in that way. You know what I mean?

Lane Gordon: Yes, and, and I agree to 100%. So first, so I, so I, I, I love the vertical that you're in with the self storage. I'll put it to you that way. That's, that's brilliant. Now if you're telling me you're just starting that vertical today, it might be a different conversation if you're already in that vertical and you already have a Bunch of clients and you're growing it and you're a trusted source, a trusted advisor, et cetera. Um, I think you got a lot of room to grow. Um, to me, some of the easy targets right now are again, some of these data providers where we used to subscribe, for example, as somebody that puts together transactions for a living, M and A transactions. We used to subscribe to a million different, very expensive databases to try and get the latest data on deals. But the reality today is, uh, you can, you can run deep research in

James: GPT and you're good to go.

Lane Gordon: Exactly. You can run multiple agents. So. So to me, but, but again, to your point about verticalization versus being a generalist, I would argue that some of those data providers are in fact general.

James: General 100%. And they're so.

Lane Gordon: Yes, so, so that's like one of the first things to fall because you can just do that yourself and then you can pull the data into any source that you want and you can use your MCP connector to dump the data back out there and run it pre process, whatever you want to do. So, um, but no, I agree with you. Verticalization is great, but I think that people need to take a look at where are they with it. You know, if they built out something and it's slowing down or maybe the head, there's headwinds for that particular vertical.

James: Right.

Lane Gordon: You know, kind of like when Covid hit, uh, talk about headwinds. Um, you know, if you were in the uh, dry cleaning or dry cleaning, uh, software, you know, dry cleaning management space, if you may. Um, that was tough for about two years because nobody was bringing a suit in or a tie or anything else to get dry clean. Nobody cared.

James: Right.

Lane Gordon: So that was very tough. But I think it's come back to a degree. Um, but I think people have to take a look and if they see that things are slowing down or you know, give you another example. So, so, um, you know, there's a lot of people out there, I think probably listening to this, that used to spend and maybe some still do a substantial amount of money on pay per click, right?

James: Yes.

Lane Gordon: You know, there's not that many people clicking anymore. I mean if you look at just the, the number of clicks on any campaign across all industries, I think it's down because now it's all about AI search. It's not about typing something in and having Google serve you up, you, and then there's a few advertisements that you click on. So, so things are changing. People have to take a look and are they fortunate enough to be in the right place at the right time that they get a tailwind and seeing double digit growth year over year. Well you know, hey, that's great. But at the same time double digit growth, that's also a great time to sell because you know when it starts slowing, um, you know you think you're going to pull all your chips off then. Well, you know, buyers aren't stupid. They see that the thing was growing at 20% a year, year over year and then it went to 8% and 5 and 4 and 3. You know there, there still will be a buyer but it's not going to be for some wild multiple once growth lows. So.

James: Right.

Lane Gordon: You have to always reassess where you are in the life uh, cycle of your company. And um, you know there's, there's um, again there's certain points in time when uh, it pays not to be greedy to take all the cash in your pocket. Um, because you may actually get a higher multiple than just running it yourself for the next few months.

James: No, for sure. I couldn't agree more. Yeah. And again going back to the CC storage example, right, like we give the software away for free. So you know, I'm less concerned because I agree and I actually think that software as like a competitive moat. I do believe that's going away one way or the other. Now it could be going away as in my developers are just so productive. Right. That my competitor. You know what cost me, let's say probably I spent uh, 2.5 million to build CC storage. Let's say if I was starting over today, it would cost me 700,000. If I started in 24 months it'll probably cost me 50,000. Right. So.

Lane Gordon: Right.

James: So again whether that's replit or whether that's just me having one developer who has like 20 AI agents, like either way software is going down in terms of cost. So it's like I think if your whole model is predicated on the features of my software are the competitive advantage, that feels very weak to me. Whereas when you have a model of like, you know, because it's funny I used to say for a long time and a lot of people said, you know, software is eating payments. I'm starting to think payments is eating software in some ways. Like you know, like you see these models where it's like uh. And again I think Square was almost like way ahead of its time with that. You know, where it was like sure, free software to run your business, no problem, just use us for payments. It's like that, that model is more and more relevant today because again if software is going to become less and less expensive, it is going to be more about other monetization models I think. And it's more about again I'm trying to focus a lot on distribution because I think distribution is going to be there for a long time there, you know, robots walking in and selling small businesses I think is going to take a while. You know what I mean?

Speaker A: Right.

Lane Gordon: So let me ask you uh, if we can, about your storage company. Uh, if we can ask what is the revenue stream then if you're not charging for the software, is it just purely the transactional, the per payment?

James: Yeah. So we do like a compliant dual pricing on it because we, because it's all card not present so you can show the cash and the card price and we have ACH as well. So it's actually triple pricing but got it. But we, we only do that like there's no other way to do it. And what's, what's really interesting about it is from like um, uh, you know, innovators dilemma type perspective. Right. We brought that model in, everybody was like oh you're nuts. Nobody's going to do that. You know. And it was true. We only got people with like 50 units or 100 units. You know, we just now every month we sign a new one up that does 5000, 6000, 4000 because all the big ones are going. Wait a second, hold on. So you're telling me I have no software fees. My, my, my opex cost is going to go down by X. You know, it's like whatever. And so, and again these disruptive models are going to be m, I think more and more prevalent because again when you take software out of the equation and say well anybody can build great software. Well now, now we have an interesting situation.

Lane Gordon: No, I, I think that's a brilliant model. I, I think it's absolutely brilliant. And uh, and I love that particular vertical. Um, no, I, I, I think it's, I, I totally agree with you that the cost of uh, software production is going down. And so software as a service, which again the sun was shining at that on one point in time and now it's kind of moving on a bit.

James: Right.

Lane Gordon: Um, you know it's, it's going to be less and less. There's going to have to be some other value add. Um, otherwise some of those other products aren't going to stand alone. Um, very uh, fortunately and, and uh, intuitive on your part that you had actually thought of that way ahead of the curve in terms of not charging for it. That, that is brilliant.

James: Because that, because that way, in my mind it's like, well, if a competitor wants to come along and they're going to, they're going to, you know, in 12 months they're going to go to Claude and say, I'm going to open, you know, I'm going to create a fake account in CC storage.

Speaker A: Right.

James: Just go crawl that and build the same thing. That's not totally possible in 12 months. So. But, uh, I don't care. Go ahead. Mine's free anyway. Like, I don't know, because you did that.

Lane Gordon: You know, the other thing is you, you've already reached critical mass. You already have these clients. They're happy with you. You're a trusted source. So.

James: Right.

Lane Gordon: So why would anybody. There's no reason for anybody to leave that.

James: Right.

Lane Gordon: It's kind of like, it's kind of like, um, for the same reason why a lot of Merchant processors and ISOs and all that, um, if things are going smoothly with their merchant, they leave them alone.

Speaker A: Yeah.

Lane Gordon: Because, you know, and, and how many times do you change your bank account? Right. Your business bank account? Almost never. Right. I pay my bills, I make my deposits, who cares? It's working. Don't bother me. So it's got to be something monumental. And I suspect that really isn't going to be the case, um, that you're really providing value there. So, um, that makes sense. And actually to bring it back to your conversation about, um, seeing value back in payments, that's a wonderful example of seeing value back in payments because again, in the first place, you never charged as a SaaS model.

James: So.

Lane Gordon: So all of your value was in payments, is still in payments. And now you're really exploding your vertical. So that's, that's wonderful. And I think people that think strategic like that and a little bit of timing and planning and a little bit of luck.

James: A lot of luck.

Lane Gordon: Yeah.

James: So.

Lane Gordon: So for those that are fortunate to be in a vertical like that, um, that's wonderful. You know, the other thing that you see that people have also used is that, um. And again, I don't know what direction it's going to go in, but, um, going back to your other point about dual pricing, so dual pricing, cash discounting, is that, um, a number of years ago, was it eight, 10 years ago, whatever it was, there was a number of ISOs that said, well, yeah, I want to see if I can get more revenue out of my portfolio and make it stickier because a lot of times once you get this uh, program going there's really little to no incentive for the merchant to leave. So you reduce attrition, you lock in a higher margin, you stop the race to zero, um, in as long as the card brands are going to uh, allow the uh, 300, currently 300 basis points, whatever it is, to maintain, they reel that in just a little bit. But um, again that's another very, very interesting strategy. Um, where does it go with payments unknown? I mean over in Europe a number of years ago there was that uh, lawsuit where they were able to uh, really crunch down interchange substantially to get interchange into the double digits of basis points versus three digits of basis points. Um, will that ever come to North America? I haven't seen any wins showing it is. But um, with some of the other things that are coming in terms of blockchain and everything else, it may just be competitive pressures from other rails that may emerge that, that has to get reeled in a little bit. But again people, small, uh, to mid sized businesses and even some large businesses, they're still going to want to have some sort of a relationship with a trusted entity that's handling their, their payments and when something goes down they can get a live person instead of being stuck. And I don't know if you've had the pleasure yet of being uh, uh, I called up, there was one company that was uh, doing a, uh, sending out a serviceman to my house and uh, uh, I called, I get AI answering, I get AI transferring me to another AI bot. Um, I never got a live human being while they're sending me text messages. We're going to be coming soon, coming soon, coming soon. Nobody ever came, you know, I said, you know what? Blocked them. I never want to deal with these people again. So.

James: Right.

Lane Gordon: So somewhere there still is going to be this trust factor. Even if things are much more efficient, even if you put in automation into your business, there still has to be a smart operator and some support people that in a pinch somebody can rely on. And that's part of the reason why they're not leaving, they're not switching because when the chips are down they know you're going to be there.

Speaker A: Father.

James: Yeah, it's almost like uh, the challenge of the AI now is not trying to figure out what it can do, it's trying to hedge for what it can't do.

Lane Gordon: Right?

James: Yeah.

Lane Gordon: Well said, well said.

James: We got to be able to deal because we did the same thing we actually did. Um, we had a customer service AI which we're bringing back probably in about four months or so. But we took it down because people get stuck in the AI loop and there's just a lot you don't think about in terms of being able to train the AI to, to reliably get a human involved when necessary is a lot harder than people think it is, you know, uh, so that's, that's been a challenge for sure. So. Okay, I have another question for you. So, you know something, this is a weird topic that we don't talk about in the payments industry much, but I think it's so important as we get into this AI new AI world. Um, and again, I'm talking mostly to people who own ISOs and ISVs here. Um, talk about the importance of the storytelling aspect of having a vision for your company that goes beyond, I'm going to sell more merchant accounts next year. You know, talk to me about the people that you work with that are successful at raising money or building towards a big exit. What are they doing to kind of cast a vision and to think strategically versus those that you've worked with that are kind of more the operator that comes in and like, well, I have this asset. What's it worth? And talk about that a little bit, if you would.

Lane Gordon: Right, yeah, no, great question. So, you know, it's, it's amazing because I remember, God, 2003, so that's 23 years ago when, when there was a couple of guys out there in the payments world and I used to jokingly refer to them as doom and gloom. And doom and gloom used to show up to the different conferences talking about how all you ISOs are going to be out of business in five years and everything else. And that was back in 2003. So, so the other business event would have been 2008. Well, it didn't. It never happened. Obviously. Here we are today. So, um, you know, so, so what are smart operators doing today again? I think some of the folks that are, that are more legacy operators. Well, let's actually start with the legacy and we'll work our way.

James: Yeah, sure.

Lane Gordon: So you, you, you still have in 2026, folks that know how to sell, uh, you know, ice to the people living up north and sand to folks living in arid regions to be politically correct. Um, you still have those operators out there that are legacy operators. And it's amazing to me. And some of those guys are doing, you know, 700, 800, 1,000 deals a month. And again, if they're good operators, they're not losing 500 out the back door a month. But there's a lot of them, um, the ones that exist that they've actually figured it out. So whether it's some sort of value added service, local service, they sponsor every local little league, uh, from here to California, who the hell knows? But they've figured it out and they've got visibility and they've got a traditional salesforce and that's working for them. And people feel like they're part of the community. So that does exist, but again, it's becoming a rarity. But there's some guys that just know how to do it. Doesn't matter what decade we're in. Um, a little bit higher up from that kind of goes back to the other thing we were talking about, which is people that decided that, well, this is interesting, I can increase my margin by going to a dual pricing model and, and in effect take away the disincentive for the merchants to leave me because they're really not seeing the, the full credit card processing costs, if you may. And so therefore why are they going to leave? Like, everything's operational, they're happy and all that. And some folks have moved to that with their legacy model. Um, another step further than that. You have folks that, uh, again, uh, what we talked about earlier, you have folks that they figured out some vertical that they can focus on, or maybe they did an analysis of their MCC codes and they determined, oh, wow, I didn't realize it, but like 20% of my portfolio is like used car dealerships or something like this. Well, okay, great. So what can you offer used car dealerships? And some of these folks, they've built some software, they bought some software. Some of them are, um, smart, like yourself, and don't charge for it, but handle all the processing. Others may be charging for it right now, but that's okay. They still have that opportunity to keep those merchants, perhaps by reducing the fee that they're charging for the software. Um, because again, they are a trusted source. And before those people start fleeing in droves, they could always work on that and try to lock them in more in another way and just keep making that nice payments revenue, um, on the very high end of things, you, you have folks coming up with ideas that quite frankly, um, you know, I, um, can't even, uh, begin to think about them. I like to think that I, uh, um, I'm a visionary. But you've got folks coming up with new and different ideas that are taking advantage of the AI, taking advantage of the ultimate in frictionless. Um, you Know, uh, whether it's uh, uh, signing uh, somebody up, if they can do it better, whether it's servicing somebody, if they can do it better. Not like the example I was telling you, the service company before. Um, there are people that are figuring out better models and also leveraging some of these models here that um, maybe they're in the background behind the scenes, they're running 50 agents, whatever it is, uh, and I'm talking about AI agents. And so consequently they offer um, superior support for a particular type of customer, a particular type of payment customer or something like that, that they can use that support. And that's helpful. Right? Um, if I'm a uh, large nutraceutical company, for example, um, I think at the end of the day if I'm threatened that uh, my processing relationship is about to be clipped, I want to know that the CEO of whoever, um, the high risk ISO that I'm using, um, that I'm on their cell phone, they're on my cell phone and that they can repair that. And frankly there's another interesting avenue. So if you look at high risk ISOs and you look at that business model that has always stumped and amazed me for years and years and years, um, and I'll tell you why. They're making more basis points than anybody else off of every single transaction. Right? But not many people want to go into high risk. Not many people want to deal with constantly kind of uh, juggling and shuffling and moving merchants around and putting them on different processors. But some people do and they're willing to do that. And, and of course when it comes to exits, interestingly, even though these guys are making tons of money and there's some high risk processors that they'll tell you they've had the same merchants, some of them for years and years and years and years. Um, but amazingly again, the buyers, most buyers, they run for the hills. They hear the term high risk, which, which really wasn't a good name that the card brands coined years ago to, to associate with that. Because if you look at a lot of the high risk, really what they are is they're medium risk businesses. There are some ultra high risk.

James: It's more, it's more reputational risk in a lot of cases than financial.

Lane Gordon: Exactly, exactly. So, um, you know, uh, uh, so it's, there's a huge opportunity to innovate and come up with something uh, uh, creative. And so what we're seeing is, we're seeing people that they're building very interesting platforms and like you said, they're finding other revenue sources. Sometimes there's, there's some SaaS component, other times they found something else. Maybe they're even selling them a product directly in addition to them using their platform. Um, but there's interesting and new ways being born as we're even having this conversation, uh, here.

James: I love it. Well, Lane, before I let you go today, I want to give you a second to just talk to my audience about what types of opportunities are you looking for these days, what are the types of transactions that your firm is undertaking, and who's the kind of person that should reach out to you and learn more about Park 33 or 733 Park. Sorry.

Lane Gordon: Absolutely. No, thank you. 733 Park. I appreciate that, James. So, um, you know, we, we always love folks that have a, uh, portfolio, starting from, from, uh, you know, uh, an agent book, an ISO book. We love larger books. We've sold books that are four or five million dollars a month in revenue. We've sold books that generally we maybe work as small as 25, 30 grand a month in terms of revenue. Uh, we've sold ISOs that range in EBITDA from, let's say, around a million dollars a year up to, uh, $20 million, $22 million a year. Always, um, love to have conversations. And even if folks are. They don't think they're ready to sell yet, that's a great time to have that conversation. Um, we always, we, we also advise people that, you know, you know, we get a lot of folks that are what I call, uh, their self helpers. They think they're doing themselves a service by having that conversation direct. I want to save the broker fee. Okay.

James: Right.

Lane Gordon: Um, I don't want to get a broker involved. And I play golf with three guys that own ISOs, and one of them is going to buy me. Well, that all of that may be correct and one of those three guys may buy them. But I guarantee you, um, we estimate that we on average have between 12 to 18% lift to the value of any of these ISOs or portfolios or other companies to that effect, just by being a professional involved in the transaction and taking it out of the mode where it's your buddy talking to you about putting together a deal, because your buddy may be your buddy, but they're not going to put up all of the chips on the table just by human nature. Yeah, it's not going to happen. It's only going to happen in an environment where there's an auction scenario taking place and Somebody that values your company more for a strategic reason is going to pay the final marginal dollar higher and really get you what you deserve. So, so that's in that, in that space. And then of course we love, look, we still Love looking at SaaS, we love looking at AI based companies. We particularly like it if there's a revenue stream, if there's an ebitda, but if there's no ebitda, uh, if at least there's customers on the platform that are doing things, transacting, what is. Some people get confused, James. They build a beautiful piece of technology. They come to us, they say, geez, I spent $10 million building this beautiful technology. Oh wow, that's great. Do you still have a team? No, I got rid of them, I didn't need them. Oh, okay. Um, do you still have any customers? Well, you know, we had a couple, but you know, I don't have any now, so. Okay, well again I'm giving you a worst case. Now in that particular case, what do

James: you have that's not a business?

Lane Gordon: You have a very dusty, and nobody wants to hear about dust with AI floating out there, a dusty software product sitting on a shelf that, oh sure, it does this thing and that thing and everything else and that's great, but so does Claude. And uh, ah, you know, I pay 200 bucks a month for that. I don't have to pay 20 million, whatever it costs you to develop. So, so I would tell people if they have a revenue stream going through there, if they have a team, if they have a real product, you know, those become interesting to us. We like larger ones. But we will talk to folks that have those elements because sometimes we've had transactions that we put together where um, we've sold these companies for an eight figure amount. So between 10 million and $99 million let's say. And what it's really been is it's been a product, it's been a team, anywhere from five to 50 people, employees that, that are uh, developing, building with expertise and some customers, some revenue that, that's survivable because depending upon their expertise, a much larger entity might say, hey, I couldn't find those 50 people and assemble them to save my life over the next two years. I'm just going to buy this damn thing, put it up, you know, either push it out to my clients or put it out of its misery. But I want these people on my team.

Speaker A: Right?

Lane Gordon: So, and that's, and that's referred to as an acqua hire in the business. So um, where they acquire and hire. So, so there's a lot of different things and, and uh, but we love having those conversations. I appreciate the question and uh, I hope folks reach out and shoot me an email, drop me a line. Love to, love to talk one on one and see if there's something that makes some sense.

James: Awesome. Well uh, where would they reach out? So it's 7:33 park calm I believe. Right.

Lane Gordon: 7:33 Park.com they can uh, shoot an email to uh, Lane at, at uh 7:33 Park. And uh, they also are welcome to uh, go on our website 733 park.com and they can uh. We got, we've got some uh, intake forms online and, and of course last but not least uh, is they can always reach us at uh, uh, on our um, phone, uh, which we have on the website 6175-6404-0461-7564-0404. And uh, you know, feel free to reach out. Any of those methods work? Great. We'd love to hear from you.

James: Awesome. Elaine, I always love having you on the podcast. Appreciate your perspective and insights. Thanks for jumping on today and sharing those with us.

Lane Gordon: Thank you very much James. Nice, nice talking.

Speaker A: Now for today in payments brought to you by Proscribes Inc. With Patty Murphy and James Shepherd. A federal district court judge has dealt a blow to the Illinois law that would ban interchange on tax and tip portions of card payments. Uh, the ruling permanently enjoined the state from enforcing the law against national banks out of state, state chartered banks, federal savings associations and payment networks. But it did not cover credit unions. Are banks chartered by the state of Illinois. Now the ruling comes on the heels of a vote by the Illinois legislature to delay the law for at least one year. So it was set to go into effect July 1st. Yeah. Now it's July 1st of 2027.

James: Um, but big shocker there. We called that probably.

Speaker A: Whether or not that's going to happen, I highly doubt that'll happen. But it, what, what's interesting is when I was doing the research on this, I found there are at least 11 states that have laws like this. Either the tax, the tip or the tax and the tip.

James: Yeah, interesting.

Speaker A: Yeah. Yeah. And uh, I mean I won't bore you with all the particularities of the ruling, but it basically was, you know, what we've talked about. You can't, you know, this is a interconnected system that crosses state lines and you can't just.

James: Right.

Speaker A: Impose rules on in one state.

James: Right.

Speaker A: Um, but still, that being Said they're still doing it to credit, uh, unions and state chartered banks. I mean, you know that they are issuing at least some credit cards, right?

James: For sure, yeah.

Speaker A: Yeah. So. So another interesting thing. International money transfer services are about to get pricier in Tennessee. The state is. As of uh, 1-1-2027, the state will impose a $10 tax on all cross border remittances plus an additional 2% of the transaction amount for remittance remittances over $500.

James: Wow.

Speaker A: Now um, Tennessee is not an outlier. Um, Oklahoma has had attacks such a tax in place uh, since 2009. It charges $5. The tax is $5 uh, for remittances. All remittances, uh, under 500. All remittances under $500. Excuse me.

James: Right.

Speaker A: And an additional 1% for larger amounts. And one thing that I did not realize is that the one big beautiful bill act that was signed into law last year established a 1% federal excise tax on international money orders.

James: How does that get collected, I wonder? I'm trying to think through that flow of funds.

Speaker A: Yeah, well that's one of the things. I mean, you know the, the money transmitter people are like, wait a minute. So you're, you know, these retailers. Because a lot of these money money orders are small mom and pop retailers.

James: Yeah, right.

Speaker A: They have a license to do that. Right, right. Um, so they're gonna have to collect that tax and keep it separate from many sales tax. They collect and record it and submit it to the state. They're gonna have to put in whole new systems that are just gonna.

James: Wow.

Speaker A: Be able to allow them to re. You know, and which is probably going to cause a lot of these um, mom and pop shops to stop doing it. Yeah.

James: I mean I can't imagine that they're making that much money on it to like justify, you know what I mean?

Speaker A: It's not. Yeah, they're not. Not to justify it. But you know what, it's what, what's going to happen is that um, it's gonna um, deter foot traffic which can generate other sales.

James: Right, right.

Speaker A: I think that's what you know, the.

James: Makes sense.

Lane Gordon: Yeah.

James: They want people to come in to do the money transfer so they go buy milk or whatever or something else.

Speaker A: Yeah. Now the state says it expects to generate as much as $54 million in new revenues from the tax. Oklahoma collected 13.2 million um, from remittance taxes back in 2024. Um, and here is another interesting stat. The Department of Financial Institutions, Tennessee Department of Financial Institutions Said that, uh, there were 16.3 million cross border transfers totaling $5.5 billion in fiscal year 2024-25.

James: Wow. Just in Tennessee, you're saying?

Speaker A: Just in Tennessee.

James: Wow. Okay. That's a lot more than I would have thought.

Speaker A: That's a lot. It's a lot more.

James: So they were, the state was seeing some dollar signs there, so.

Speaker A: Yeah, yeah. And they, you know, uh, so were the feds. I mean, think about.

James: Right, 1%.

Speaker A: Yeah, 1% on that. And that's only one state.

James: Yeah, for sure. And not even. Oh, you know, I can't. I mean, I'm sure like a California or a New York would be an order of magnitude larger volume than that.

Speaker A: Yeah, because I was just thinking you were saying that it's like Alaska is going to be minuscule to that, but.

James: Right.

Speaker A: But, but you know, Texas, California, Arizona, any, any, you know, a lot of the southern states have a lot of, have a lot of travel, immigrants.

James: Right, right, right, right. Yeah, you, I would imagine kind of your, you know, Florida, uh, you know, just. Yeah, there's a lot of, A lot of states that I think would just, I mean again, if Tennessee's at 5.5 billion, I mean California's got to be at, you know, hundreds of billions, I would think. You know.

Speaker A: Yeah, yeah. So what? I would, I would agree, I would agree. So, and, and nationally we're talking.

James: Oh, yeah.

Speaker A: I mean, trillion, you know, many hundreds of billions.

James: Right, right. If not over a trillion. Yeah, that's interesting.

Speaker A: If not a trillion. Yeah, the trillion might be a little bit up there, but you never have one.

James: Yeah.

Speaker A: You know, um, interesting. Yeah, it's pretty interesting. Um, I mean, in a way you see why the states? I mean, it's an easy tax.

James: Well, yeah, and nobody's going to be super. I don't think the consumer is going to be really, really upset by it. It's like, oh, I get it. I'm bringing money from overseas, you know.

Speaker A: Well, I'm sending money overseas. But here's the thing that, here's an argument I heard that was interesting. The uh, consumer who said, I've already paid taxes on my earnings and now I'm sending some of those earnings to my family back in Colombia or wherever.

James: Right, right, right.

Speaker A: And I'm having to pay a tax on that as well.

James: Yeah, right, right.

Speaker A: Yeah. But you know, um, let's face it, how many, um, you know, the, the, the, the people, those taxes, I mean those remittances are not being sent by everybody. It's a minority.

James: Correct. Yeah. So there aren't enough people to put, to put pressure on, on the government to stop that, because there's not any. Yeah, exactly.

Speaker A: Yeah. So, uh, next up, Minnesota is set to become the third state to banish crypto ATMs. Follows in the footsteps of Indiana and Tennessee. Tennessee again.

James: Yeah.

Speaker A: Um, courting in this. According to, um, ATM Marketplace, Minnesota received 134 complaints from consumers in between 2023 and 2025. Consumers, uh, who were victims of fraud involving crypto ATMs. Um, um, the losses to these consumers amounted to about a million dollars. Now, I, I don't know if we've talked about it here, but, you know, in the typical scam, consumers are scared into purchasing, going to a crypto atm, depositing cash, getting to crypto and then sending that crypto to a, an account because they believe that, uh, a loved one is about to be arrested or some other fake emergency.

James: Right, right.

Speaker A: I mean, as the states put it, the crypto, uh, ATMs are fraud magnets because they combine cash payments with rapid transfers and limited options, um, for recovery.

Lane Gordon: Yeah.

Speaker A: You know, Minnesota had already adopted licensing requirements and consumer protections related to crypto kiosk. But according to law enforcement, scammers just adjusted their, their scams, of course, by guiding victims to do the transactions and, you know, arranging deposits away that got around the safeguards. I, I heard a story, Um, I don't think it was in Minnesota, but it was, uh, someplace where this woman was, you know, putting money into a crypto atm. And, uh, this, you know, the local law enforcement were there and said, no, no, don't do this. You're being scammed. And she wouldn't believe them. She just kept feeding the money into

James: the, you know, what in the world.

Speaker A: Yeah, I mean, some people just, they just want to throw their money away, I guess.

James: Well, uh, I think they just get so convinced that it's like a real situation that they, that's it, that they're irrational.

Speaker A: So, yeah, I, uh, I saw a case just the other day on the news about this come this, uh, this couple who had lost, you know, their life savings to a scam artist who said that they were with the irs. And you know, they had to. Kept calling back. They had to keep sending more and more money in through, through a crypto atm. And um, and then finally they called the IRS and asked for this agent. And guess what?

James: Yeah, it's not a real agent.

Speaker A: Yeah. So it's, it's sad that people, that people get scammed, but, um. Yeah, I mean, In a way, I feel like there needs to be more education. But then you have that case of that woman who, you know, kept on feeding the money into the ATM even though, yeah, she was being told it wasn't a good idea.

James: Yeah. So, wow.

Speaker A: Here's a little aside. As I was researching that story, I. I discovered a little piece of, um, data that 70 million, 700 million Americans own cryptocurrency. And 83% of I gaming players in the U.S. are crypto friendly.

James: Mhm.

Speaker A: That's according to a study by Pay Safe.

James: Interesting.

Speaker A: I honestly didn't know a lot about. I don't know a lot about I gaming, but I do know that like I have nephews who love playing.

James: Right, right, those things.

Speaker A: You know, I took, I took one of my nephews to a uh, I gaming convention in Atlanta several years ago.

James: Really?

Speaker A: Yeah, yeah, they had it, they had it in this big theater. I mean, I couldn't believe that they were mostly guys. There were very few girls there, but yeah, they were mostly, you know, high school and college age guys. Yeah, um, you know, you know, so anyway, so here's the thing. Of course paysafe did this, talked about the survey. Survey or this data because, um, they now say, uh, that uh, gamers can pay with crypto with a new app that paysafe has put out in partnership with moonpay. And that's. Moonpay is an interest, um, um, fintech that provides infrastructure for buying and exchanging crypto. I'd never heard of moonpay before. I had to do a little research on them. But they really are legitimate. I figured they had to be legitimate if Pay Safe.

James: Yeah, for sure. You know, they did their due diligence, so.

Speaker A: Yeah. But Moon Pay all of me all made me think of us Moon Pies.

James: Do you know what I mean? Oh yeah, for sure.

Speaker A: Yeah. You're from Pennsylvania.

James: Pennsylvania, right, right, of course. Yeah.

Speaker A: It's like. Oh yeah, back, back when I was young, there was this, uh, band that had a song. It's like their, their refrain, uh, was uh, RC Cola and a Moon Pie.

James: Yeah, yeah, I've actually heard that oldie, I think a few times. So.

Speaker A: Yeah, yeah, yeah, yeah. So just to wrap up, um, I, I came upon a, um, a study by Payments Intelligence, which is part of payments.com. okay, okay. Um, that said 70% of consumers consider the availability of a preferred payment option when choosing a place to shop.

James: Interesting.

Speaker A: Yeah. And so, you know, the advice of course is to meet shoppers where they are. Merchants need to balance, you know, things like digital wallets, debt.

James: Right, right.

Speaker A: I now pay later. But they also have to be careful not to like, overload the point of sale because that's, you know, when consumers have too much of a choice, they say that there's just as much of a bad experience as not getting their preferred, um, method.

James: Right.

Speaker A: And, uh, additionally, 84 of shoppers say one click checkout is an important factor.

James: M. Yeah, well, and we, you know, that data's been out for a while because Amazon is, uh, destroying everybody. And that's what they do.

Speaker A: That's exactly what they do. Yeah. I mean, I'm a sucker for it myself.

James: Yeah.

Speaker A: Yeah, yeah. Well, that's it for this week.

James: Awesome. Great stuff. Patty, as always, thanks for keeping us in the loop.

Speaker A: My pleasure.

James: Thank you for listening to the Merchant. Whether you are an industry veteran processing executive or just trying to learn about the payment space, we appreciate your time. We hope you will tune in next week for more information and tips on building your merchant services business.