Outstanding Payments Executive: Edward A. Labry III

  In January 2006, Edward A. Labry III was ready to leave First Data Corp. The former president of Concord EFS Inc. had completed his two-year obligation to stay on after First Data bought Concord in 2004, and he was unsure if the transaction processor wanted him to stick around.
  "If First Data wasn't going to use me to what I thought my abilities were, I was ready to leave," Labry tells Cards&Payments.
  Instead, Henry C. "Ric" Duques, First Data chairman and CEO, named Labry president of First Data Commercial Services, the Greenwood Village, Colo.-based company's largest business unit. Labry is responsible for U.S. merchant acquiring, Telecheck check services and prepaid card services.
  Throughout last year, Labry led a turnaround of a struggling merchant-processing unit, which was losing customers quickly in part because of antiquated, paper-based enrollment systems and declining merchant trust, particularly among smaller retailers, observers say.
  Duques' foresight to keep Labry worked out well for the payments veteran, chosen winner of Cards&Payments' 2007 Best in Payments Outstanding Payments Executive award.
  Labry might not have stayed if Duques had not replaced Charles Fote as First Data's leader, observers say. "One of Fote's failings was he put Ed on the bench for two years. Duques came in to rescue First Data from Charlie, and a number of people told him that the one person who could revive the flagging fortunes in the merchant business at First Data was Ed," says Stephen C. Mott, principal of BetterBuyDesign, a Stamford, Conn.-based consultancy. "One thing about Ed is merchants always have trusted him, and you can't name five payments executives that have that kind of relationship with the merchant community."
  One of Labry's chief initial priorities was to reduce the number of merchants lost to competitors. "We are perceived as being too big, and we are perceived as being too hard to do business with," Labry said during a conference call with analysts in
  January 2006. "So what do we do? Immediately we change."
  In 2006, First Data reduced merchant attrition by 7% from the previous year, which Labry says translated to about $20 million in recurring annualized revenue. He attributes much of that success to the adoption of an electronic, automated merchant-activation process, which has reduced to two days or less the amount of time it takes to enable a merchant to accept payment cards. The previous paper-based system took two weeks to process. "If we take two weeks to activate a merchant, it will go somewhere else," Labry says.
  Commercial Services acquiring volume last year rose 16%, to $1.3 trillion, while total transactions rose 13%, to 25.5 billion. First Data added 600,000 merchant locations in 2006, up 22% from 2005's total.
  To further quell attrition, First Data last year rolled out a proprietary payment terminal, the FD 100, which enables independent sales organizations to more easily reach out to smaller merchants. The low-cost device is packaged with one rate, one settlement and one statement for all Visa, MasterCard and Discover transactions. The proprietary terminal and software prevents "slamming," which occurs when another processor takes over a merchant-processing contract without switching terminals simply by changing the software. Today, about half of the terminals First Data sells are proprietary, Labry says.
  "There's nobody in the business who can turn around and establish a strong customer orientation faster than Ed can," Mott says. "And he's only 44. He's still got another couple of decades, and he can continue to change this business."
  This year's runners up were...
  * Robert Selander, president and CEO, MasterCard Inc.
  * Douglas Bergeron, chairman and CEO, VeriFone
  * Robert Carr, president and CEO, Heartland Payment Systems Inc.
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