John Paul Golino knows how to build things.
After graduating from Wethersfield High School in 2001, Golino built a couple of businesses. First came a landscaping company, then Bar-Celona, a nightclub on Congress Street in Hartford that he and some friends started and later sold.
He built another business by investing in real estate and renovating and flipping houses. But when the market plummeted in 2008, he had to start over.
He became an independent agent for North American Bancard (NAB), a Michigan-based company providing credit card and electronic payment processing to merchants. His job was to visit businesses and sign them up as NAB customers.
After a year working on behalf of someone else and learning the industry, he decided to build his own company: Choice Merchant Solutions.
Today, the Hartford-based business has three divisions (including an international operation), more than 100 employees, and revenue growth that has exceeded 200% over the past three years.
That ranked it No. 1,933 on Inc. magazine’s 2020 list of the 5,000 fastest-growing U.S. companies. It was the third consecutive year Choice made the list.
And yet, Golino considered selling the business in 2015.
“I was going to walk away from the industry because we weren’t growing,” he said.
A trillion-dollar industry
Merchant processors like Choice take sales information from clients, get authorization for each transaction, collect money from the bank that issued the credit or debit card used in the purchase, and then send the money to the merchant, collecting a fee for each deal. As more merchants rely on electronic payments, the volume of transactions is soaring.
The 2019 Federal Reserve Payments Study reported that core non-cash payment transactions — involving debit and credit cards, checks, and electronic transfers often referred to as automated clearinghouse (ACH) payments — totaled 174.2 billion in 2018, up 21% from 2015. The value of those payments totaled $97 trillion, up nearly 12% from 2015.
That demonstrates the huge market opportunity for companies like Choice Merchant Solutions, which is headquartered in Hartford’s “Candy Cane” building at 10 Columbus Blvd.
The problem in 2015 for Golino was that his company was still an independent sales office. It was registered with Visa and MasterCard, but did not have a contract with a bank. Choice was affiliated with Electronic Merchant Systems (EMS), an Ohio-based merchant payment processor.
Many of the large processing companies like EMS had been around for decades and had stopped innovating, Golino said, making it difficult for them to compete when mobile payment-processing apps like Square and Stripe entered the market.
That led him to make two choices: first, he started cold-calling banks to find one that would independently support his firm’s transactions and allow it to break from EMS; second, he hired people who could build Choice’s own technology platform.
“Square and Stripe are not really payment companies, they’re technology companies,” Golino said. “They got into the payment space because of their technology.”
Tools for merchants
Golino hired Andres Ordoñez as his chief technology officer and formed Choice Technologies, a division of Choice Merchant Solutions that officially launched in 2017.
The division developed a payment platform to manage a variety of back-office functions, including online applications, automated underwriting, risk management, fraud prevention and more, which it then licensed to other companies.
That raised enough revenue to cover both the cost of developing the system and a staff of developers.
The next step was to develop tools for merchants. Many use multiple providers and systems for payment processing, online ordering, inventory management, gift cards, loyalty programs and more. Choice created a platform to manage all those features in one place.
Since it began offering that platform, the company’s growth has spiked. It now has more than 50,000 merchants on its platform. Revenue so far this year is up 80%, Golino said, adding he expects gross revenue to top $25 million in 2020.
Its client list includes HobbyTyme, a high-volume e-commerce seller of collectibles and hobby materials; Systemic Formulas, an online vendor of vitamins and supplements; Goodspeed Opera House in East Haddam; Roly Poly Bakery in New Britain; and Clark Farms at Bushy Hill Orchard in Granby.
Clark Farms owner Becky Clark said the farm signed on with Choice Merchant Solutions a few years ago because she was frustrated with her previous processing company. She praised not only Choice’s services but the way it provides “a person to talk to” whenever there is an issue or need.
Clark said Choice was especially helpful during the pandemic.
“We needed a way to take transactions remotely, because customers don’t want to cash out in the building,” she said.
Choice provided its A920 portable smart terminal that allows sales to be completed remotely.
Golino said the pandemic has shown merchants that they need to have a variety of ways to conduct business transactions, whether in person or online.
