The team behind Arcum Partners think the merchant services space is missing something quite critical. “For an industry that uses the word ‘services’, there is a huge lack of services”, co-founder Sebastien Buils explained to Hypepotamus.
The Atlanta-based team built an analytics platform to help payment processors better understand their merchants and why they might be looking for new solutions. The goal added by Builes is to tackle the massive churn problem in the payments space.
“Payments are pretty commoditized, so anyone can offer business credit card processing,” Builes said. “[Most businesses] don’t know too much about credit card processing. Their concern is to start the business and ensure that the customers are satisfied with the product. Credit card processing is one of the last items on their priority list. As a result, many traders are exploited.
In these cases, disgruntled merchants will eventually unsubscribe and seek another payment processor. Arcum helps payment companies leverage historical data and behavioral patterns surrounding their merchants to better predict future churn. That, Builes told Hypepotamus, can give a company time to repair that relationship before it loses that customer forever.
Targeting the payments space
Arcum Partners takes its name from the Latin word for bow, which was “the first ultra-targeted weapon developed by man,” Builes explained. “We thought Arcum would be the name because we leverage data to help our clients increase their bottom line, and ultimately create insights that increase overall profitability in a highly targeted way.”
While Arcum’s initial go-to-market strategy was focused on the small and medium-sized business market, it has become clear over the past few months that major players in the payments industry are looking for a solution to combat churn as early as now. Builes said it had “changed the whole timeline and type of customers” early-stage startup plans were considering in the near term.
This type of service could be particularly beneficial for players in the payments space looking to build customer loyalty in times of economic uncertainty.
“If we go into a recession, the churn rate will increase. I think a lot of large organizations have seen the writing on the wall and determined that they can’t wait for the recession to hit. They should start finding solutions now,” Builes said.
The Arcam team
Raised in Colombia and Florida, Builes received his bachelor’s and master’s degrees from Florida State University before moving to Atlanta. He first began looking at customer churn while working for a consulting firm that helped newspapers and other publications better understand their subscriber base. Builes then worked as a financial analyst at Evo Payments, a public financial services and payments technology company.
Arcum was born out of Builes’ experience in analytics and payments. He co-founded Arcum with Taohang (Tad) Zhang and Mikhail Dmitriev, Ph.D., a current FSU economics professor who has taught Builes at the undergraduate and graduate levels.
Zhang and Builes were colleagues at a consulting firm before they both entered the payments space.
The team was seeded for the first three years before raising a small circle of friends and family via WeFunder earlier this year.
Most recently, the team won the top prize in the Fintech South Innovation Challenge 2022.
The team may have been all smiles at Fintech South earlier this month, but they are quickly getting back to work and ready to scale the platform to prepare for bigger clients.
“Our solution tries to put the word service back into the industry. We’re able to work with processors and let them know when a customer is upset and why they’re upset, so they can ultimately improve that service or provide a better solution,” Builes said.
Featured photo courtesy of Arcum Partners. Photo from left to right: Co-founders Tad Zhang, Sebastian Builes, Mikhail Dmitriev