WebDevPARTNERSHIP

PROSPECTUS

Mark JacobsonNew Business Development

mark.jacobson@merchantindustry.com

646-704-8481

Introduction

Merchant Industry is partnering with web developers so they can enter the transaction loop and participate in the revenue.

As your partner, we will be providing back office support as a card processor behind the payment gateway you build for your customer. This is a significant opportunity for both our companies to expand the services we can offer our customers.

Merchant Industry was founded on the principle of fighting for the best possible rates with the bankcard companies to minimize the impact those fees have on a customer’s bottom line. Our goal is to ensure that bankcard transactions enter our client’s cash flow quickly and with minimal financial exposure.

In just 6-years, Merchant Industry has partnered with over 10,000 merchants and now processes over $2B annually and handles 2M transactions per month. Along with our tremendous growth, we have kept pace with superb customer service that comes with our transparent billing practices.

Last month, INC. magazine placed us #717 on their prestigious INC. 5000, ranking us #44 among financial service companies. Merchant Industry is the only card processor included in the 2013 listing. This link connects to our profile at INC Magazine: http://www.inc.com/profile/merchant-industry

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Preferred Processor Program

Merchant Industry is committed to developing a long-term partnership with web developers and is going to provide you with the support you need to become a successful provider of merchant services.

Once a customer's account activates, the web developer will receive 20% on the margin generated by the processing. This is referred to as residual income: you will continue to participate in this revenue as long as the account is active.

Merchant Industry will take full responsibility for establishing and servicing the account. The web developer will refer the account to Merchant Industry and we will take full responsibility for establishing and servicing the customer. We will walk them through the process, establish, and configure the merchant account.

Although we work with many different gateways, we do recommend using the authorize.net module. Our accounts enjoy discounted rates and we find their lines extremely reliable.

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History

Merchant Industry was founded in 2007 by Leo and Jennifer Vartanov. Leo and

Jennifer foresaw the leverage they could bring merchants in negotiating their

bankcard processing fees when Congress passed legislation regulating the

bankcard industry.

Merchant Industry has grown to have over 100 employees and in the last 3-years

expanding at a 642% growth rate.

Although it has been Merchant Industry’s commitment to small and medium-sized

business to deliver enterprise-level rates and service that has fueled our rapid

growth, we have partnered with several national brands.

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Senior Leadership

L eo Vartanov, Chief Executive Officer / Founder

Under Leo’s leadership, Merchant Industry has demonstrated unprecedented growth in the financial service sector. He continues to design our corporate strategy, ensuring our continued success. He is considered a leader and visionary in the independent card processor marketplace. Along with his wife, Jennifer, they formed Merchant Industry in 2007, predicting the tremendous opportunity that Congressional legislation would create in the bankcard processing sector. Under his leadership, Merchant Industry has expanded 642% during the last 3-years and has received many industry awards and recognitions.

J ennifer Vartanov, Chief Financial Officer / Co-Founder

Jennifer is focused on compliance and financial oversight. She is a well-respected figure in the bankcard processing sector given her breadth of knowledge and innovative financial structuring. Jennifer and Leo live in Nassau County with their 3-children.

C hristopher Benabu, Chief Operating Officer

Chris oversees day-to-day operations; growing Merchant Industry’s portfolio of processing partners. He provides leadership to the new business development teams and contractual oversight. Chris is a serial entrepreneur, having developed successful businesses in diverse sectors.

F rank Kotler, Chief Technology Officer, Infrastructure & Partner Support

Frank ensures the smooth operation and security of the 2M monthly transactions that Merchant Industry handles. His expertise encompasses our complex infrastructure as well as integration with merchant software used by our partners.

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Senior Leadership

L arry Emmons, Vice President of New Business Development

Larry strategies all new business development initiatives and has achieved a 100% growth factor for each year of his leadership. He first joined Merchant Industry in 2009 on the ground floor as an outbound lead generator. His acumen for structuring processing deals along with his commitment to growing the business very quickly placed him in a leadership role. Rising through the ranks of account management, Larry is now a key executive ensuring Merchant Industry’s continued growth.

E ric Lynch, Manager, New Business Development

Eric recruits and manages the lead generators. He plays a vital role in expanding Merchant Industry’s portfolio by creating an inspiring workplace and encouraging the lead generator to excel. He also manages one of the largest individual portfolios of accounts in the company.

D ianna Terrero, Leader, Latin American New Business Development

In just 2-years, Dianna has forged partnerships with a large portfolio of businesses that serve the Latin American market. Dianna recruited and manages her own new business development team.

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Processing Arrangement

We prefer an InterchangePLUS program for our customers. It offers simple, easy to understand billing. The customer will see exactly what the card company has charged them (the Interchange rate) and the amount we charge to handle the transaction (the Plus).

There are 3-costs to account for in determining the total impact processing incurs:1) the Interchange, 2) the handling fees of the processor, and 3) the fees that the gateway charge.

Interchange rates vary a great deal depending on the “type” of card used. All the card companies publish their current Interchange rates on their websites. The rest of the fees fixed. There is a glossary on the following page.

Although rates are established with each customer on an individual basis, this table is an illustration of what an ecommerce account, with no payment history, could receive.

Handling Fee .49% of gross

Transaction Fee $.10

Batch Out Fee $.05 per batch out

Monthly Statement Fee $5.00

IRS Reporting Fee $4.95

Customer accounts at these introductory rates will be reviewed after 6-months forrate reductions. We never increase rates, we only decrease them.

(continued)

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The last piece to account for is the cost of the payment gateway. Merchant Industry has an arrangement with authorize.net that allows us to extend a discount to our customers. The following table contrasts the authorize.net retail price with the fees paid if processing with Merchant Industry.

Authorize.net Merchant IndustrySet Up Fee $99 None

Monthly Fee $20 $18Per Transaction $0.10 $0.08

Batch Out $0.20 $0.10

GLOSSARY OF TERMS

Batch Out – At set intervals, usually at 18:00est every day, the system reconciles all the transactions for the day, indicating that the transactions are final. This triggers our system to cash flow the transactions within 48-hours.

Interchange – This refers to the actual cost of the transaction that the card company charges. It includes two parts: a percentage and a transaction fee. This charge varies greatly according to the type of card used (e.g., regulated debit, rewards card, corporate card, et al.). This rate is independently set by the card company. There is a specific classification for ecommerce transactions since the card is considered “not present.”

Statement Fee – Covers the cost of generating and mailing a statement each month.

Transaction Fee – The cost incurred to cover the authorization and transmission ofthe transaction.

IRS Reporting Fee – Under the Patriot Act, we are required to send transaction data to the IRS every month.

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PayPal

Many merchants lean towards using PayPal because of their name brand. That recognition and perceived ease of use comes at a price.

PayPal is NOT a good deal for a merchant. PayPal charges expensive monthly fees,their base rate is too high, AND they reserve the right to charge even MORE, depending on the type of card. It appears to be a “flat rate,” but it's NOT.

This comparison is based on PayPal's PaymentPro program and the Merchant Industry InterchangePLUS Program at a rate of .49%. PayPal's percentage STARTS at 2.7%, but they will charge more for cards with reward points, government, and corporate cards.

PayPal InterchangePLUS

$10,000.00 volume $270.00 $158.75

@200 Transactions $60.00 $58.80

Monthly Fee $30.00 $23.00

Batch Out n/a $4.50

IRS n/a $4.95

Total $360.00 $250.00

Effective rate 3.60% 2.50%

*PayPal reserves the rate to increase their rate based on type of card.; therefore, this table is based on qualified debit & credit cards. InterchnagePLUS includes Merchant Industry's .49% rate as well as the Interchange rates charged by Visa on ecommerce transactions. It assumes a 60% credit / 40% debit ratio.

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Other Advantages

As well as minimizing a merchant’s exposure for accepting debit/credit cards, there are other advantages that we have to offer.

American ExpressAccepting American Express can be problematic. Not only is it costly, but Amex charges the merchant for a separate statement. However, because of our tremen-dous volume, we can offer customers the Amex One Point program. Merchant In-dustry includes Amex transactions on our statement and the purchase enters the merchant’s cash flow in half the time as it would when processing directly with Amex.

Cash Advance ProgramMerchant Industry has the ability to advance projected future earnings when a business needs access to cash.

Cash FlowWe fund the transaction within 48-hours of batch out so that sales enter the cus-tomer’s cash flow quickly.

Customer SupportCustomers have direct access to account management at all times. We do not op-erate a tech support call center. Our customers always have access to an account manager who is familiar with their needs and can mitigate and resolve their issue.

International CardsOur network enables customers to accept a full spectrum of international cards: JCB, BC Card, Union Pay, etc. This eliminates the risk of losing a sale from a buyer who banks outside of the United States.

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