When making an online purchase there has to be somebody to enable that transaction to take place and that somebody is Electronic Clearing House Inc. in Camarillo. “We are what drives e-commerce,” said company CEO and COO Chuck Harris. “All these things we enjoy doing. If we can’t monetize it, it doesn’t happen.” Harris took over as CEO in July, replacing Joel Barry, who retired. A relatively low-key company employing 240 workers in offices in four states, ECHO was in the spotlight earlier this year when a $142 million acquisition deal with Intuit fell through. While the company said the decision was mutual, the deal ended at the same time it became public ECHO was a witness in a federal case involving use of its services to process illegal transactions with online gambling sites. The company was not charged with any wrongdoing. Since then, ECHO has focused on opportunities it had identified prior to the Intuit deal, Harris said. Harris joined ECHO in 2005 as president and COO. He previously worked at Electronic Data Systems, Paymentech, and Merchant Link, a wholly-owned subsidiary of Paymentech. “It was a great opportunity to work at a small company in an industry where there are not many companies like this left,” Harris said of the move to ECHO . “That was the compelling opportunity.” Question: So how is it going so far as CEO? Answer: It’s been going great. I’ve been on the phone a lot with investors, meeting our owners, if you will, and talking them through where the company is heading and answering questions and getting familiar with each other. Q: What kind of questions have investors been asking? A: There’s been a lot of consolidation and transactions in our industry recently and they are interested in that and how the company fits in with that: what’s the vision for the company, what’s changing, what’s staying the same. There have been a wide range of questions. Q: Electronic Clearing House itself grew through acquisitions. Is that something that will continue? A: We are not actively looking to buy anything at this point. As I’m sure you’re aware, we were close to a transaction with Intuit last year so most of the work is regrouping from that and getting back to growing the company, meeting customers and building products and working with the employees. There’s nothing active right now. Q: Speaking of Intuit, were the circumstances of why the deal fell through disappointing? A: I guess it depends who you ask. We weren’t looking to sell the company. As hard as it is to believe, we were excited about our strategy and where we were trying to take the company. The Intuit transaction came along and it made sense to both companies and definitely to the shareholders in our company. It was a transaction we thought made sense so we pursued it. For whatever reasons we ultimately didn’t close the transaction, so I suppose there is some disappointment with that. We’re a small company so it’s easy to assess the mood and tenor of an organization. Our company is excited about the things we were working on before the Intuit deal came along; people are back in engaged in the business. Q: What has the transition been like going from being COO to CEO? A: It’s primarily the investor work. I was running most of the company already and now I’m interfacing more with the investors. We are evaluating the strategy for the company and looking at where there is opportunity. The primary work has been the introductions and they need to be comfortable with the leadership. Q: Describe the function of Electronic Clearing House. A: We enable merchants to accept electronic payments. When you go to a Web site and you want to buy something, that transaction shows up on your credit card and that merchant gets paid. We make all that happen. They call it electronic payment processing. Q: That is a growth area in the finance industry? A: Very high growth, highly competitive, very mature. It has reasonably consolidated. Q: What’s the benefit your customers get from your services? A: The primary benefit is they can get everything from us. We offer the full credit card, debit card, paper check and electronic check [processing]. We offer a full suite of products. A lot of our competitors are very deep in one or two of those. We have all of them. We are a bit smaller but we have wider product match. Q: Does ECHO get much involved with protection from identity theft? A: We are on the merchant side. We certainly protect your data. When you shop it’s our job to make sure it doesn’t get stolen. A consumer wouldn’t know who we are. Q: Are there any markets left for the company to go into or has it gotten to all to them? A: There are definitely growth opportunities for us. We’re more niche oriented given our size. The big guys are all things to all people. As a smaller company it’s obvious we won’t be able to do that. So we are more niche oriented. Q: Meaning which niches? A: I won’t give a real example because we don’t disclose that but we might look at day care centers or something along those lines. We’d say that’s big enough for us to go pursue versus for our competitors if it’s not a billion dollar opportunity they wouldn’t waste their time. It doesn’t have to be a billion dollar opportunity for us to be successful in because we are smaller. We try to leverage our California roots and so we’re in technology-oriented businesses. We divide the industry into ‘card present,’ which would be traditional retail, and “card not present,” which is an internet site or a recurring billing merchant. Typically the ‘card not present’ merchants tend to be more technology oriented in terms of what they need from a product and service standpoint. I think a lot of that comes from our roots here in California and the types of businesses around here. Q: At your website it mentions that debit cards are used more and more these days. So a lot of people aren’t using cash as much? A: Cash or checks. Most people, if you ask, they scratch their head and say they are not writing as many as they used to. Which we love. We’re electronic payment processors, we benefit from that. Cash? We don’t make any money when you use cash. Q: Where do you want to see the company in three to five years? A: We are looking to grow the company. As we tell the employees here, your personal and professional opportunity comes through growth. As we grow the company we need more managers, more supervisors and more account managers and all the sort of things that are fulfilling and exciting career paths. Our goal in running the company is to create growth and that creates value for our shareholders and it makes it a better place to work for our employees. Then we get to hire more in California. We need more high-tech workers out here in Ventura [County]. Q: Are you in a hiring mode right now? A: Yes Q: For the more tech-oriented jobs is it tough finding people? A: It is more challenging. We try to have programs to grow our own out here but there are certain areas where that is challenging, where you need a specific skill whether it’s someone with Sarbanes Oxley [Act] accounting experience or Java programming. Those high-demand kind of people are more challenging. SNAPSHOT – Charles “Chuck” Harris Title: CEO/COO Age: 44 Education: Bachelor of Business Administration in Finance, University of Texas at Austin Most Admired: My grandfather Career Turning Point: When I left a company called EDS to work for First USA. It was going from a big company to a small company. It was that turning point of going from the safety and the anonymity of a very large company to a small company. First USA was how I got into the payments business. Personal: Married with twin daughters.
