​TSG hitches US launch of Debitsuccess to Azure

Recurring payments platform rolled out on Azure for elasticity and payment security compliance.

Microsoft's Azure cloud service is underpinning the launch of Transaction Services Group's recurring payments platform Debitsuccess in the US.

The greenfields launch of Debitsuccess is a strategic departure for privately-owned TSG, which entered both the Australian and the UK markets through acquisitions.

Craig Marshall

New Zealand-based TSG bought Australian operator Paysmart in 2004 and followed that last year with the buyout of two UK subscription payments providers -- Harlands Group and DFC. As a result, the company now has two million customers worldwide initiating over 36 million transactions worth more than NZ$2 billion a year.

TSG entered two acquisition processes in the US but neither led to a deal, TSG chief executive Craig Marshall said.

"The only way to get a presence is on a greenfields basis which is not easy but that's what we've decided to do," said Marshall, who remains open to further acquisition discussions.

"We will not ignore opportunities if they come along, which they invariably will."

In June TSG appointed a US chief executive, Michael Feliciano, based in Scottsdale, Arizona and has a vice president of sales based in the New Zealand Trade and Enterprise "Kiwi Landing Pad" in San Francisco.

Along with delivering elasticity, Azure has also helped deliver PCI DSS payments system compliance for the new US business.

"Part of that rollout and our modus operandi is ensuring we are PCI DSS externally audited and accredited," Marshall said. "To ensure we remain accredited in the US we need to have a platform that is likewise accredited. That's one of the big reasons for using the Azure platform."

TSG's chief information officer, Steven Holmes, said Azure allows the company to scale up and down in its live, test, and staging environments. It also enables TSG to to keep core data in the US without putting "tin on the ground".

When it came to a choice between Azure and AWS, it also helped that Microsoft provided clear guidance on PCI DSS, covering which parts it was responsible for, which the client was and which were shared.

"Ultimately we are a Microsoft shop and they were being particularly aggressive at the time in terms of pricing," Holmes said. "They've given us some sweeteners around signing an enterprise agreement and getting us up and running."

The US business will be different from those in other territories in several ways to cater for local payment preferences and, initially at least, a different target market.

TSG's core business is health and fitness subscriptions. However, the company will initially focus on verticals such as entertainment, eye-ware, insurance and retail in the US before tackling the gym market, Marshall said.

One reason for that is that TSG has to internationalise its proprietary CRM system, Clubware.

"Clubware opens the door to billing and it appears in America there is a tight correlation between your software and your billing," Marshall said. "The two are tightly integrated.

"Our billing platform unplugs from Clubware because we are very successful in other verticals.

"Our clients will be non health and fitness in the first instance and as we bed down the product we will integrate it with Clubware and then push into health and fitness."

Another difference is that in TSG's current territories the primary payment method is bank account direct debit. Credit card payments are secondary. In the US it's the other way around.

TSG recently scored a big win outside of its core market in Australia with entertainment giant Village Roadshow, which is now offering a subscription payment service for theme park membership.

Village Roadshow used to have to undertake significant promotion to get customers to sign up for another year. The new subscription service "ticks away" each month making membership more affordable, Marshall said.

Other businesses have approached TSG as a result, said Marshall, who forecast non health and fitness verticals will outstrip the core business in five years.