Electronic Check Services was a 2010 honoree at Springfield Business Journal's 2010 Dynamic Dozen awards. Information was accurate at the time of the honor. Click here for information about this year's event.About 10 years ago, Derron Winfrey had a tough choice to make.
His father, Dennis, wanted him to move back to Springfield and help build his small business, Electronic Check Services. The move would require Derron Winfrey to take a cut in pay and offered no guarantees for a future.
As a television news producer in Oklahoma, Winfrey had the luxury of a steady paycheck and the promise of one day moving on to a larger market – and a larger paycheck.
Winfrey talked to his wife and ultimately decided to move back to Springfield, despite a lucrative job offer as he was literally pulling out of his Oklahoma driveway.
The company he joined a decade ago was a small operation doing business as Midwest Check Recovery. It was supporting about 120 stores and taking in very little cash. In fact, the first few paychecks Winfrey received were from his dad’s pocket.
Fast forward to 2009, when Electronic Cash Services recorded $18.1 million in revenues.
Success had built steadily for several years, as ECS added prepaid cellular cards to its core business of collecting on bad checks through debit-card technology.
“We did very well because we had two things to talk to customers about: ‘Here’s a way to shore up losses on the check side and a way to shore up your revenue,’ and it was all working out of the same terminal,” Winfrey said. “You could call one company to get help.”
But the game changer happened four or five years ago, after Winfrey assumed leadership of the company following his father’s retirement.
Winfrey drove to Kansas City to listen to a couple of software developers pitch a program for check servicing, Softgate Systems. Immediately, he saw potential in the software that even its developers didn’t see.
“We were driving back … and I said, ‘Why don’t we just buy them?’” Winfrey recalls.
So they did, and in 2007, ECS launched a service built on the software design, allowing retailers to offer customers prepaid cellular, bill pay, gift cards and loyalty programs through a single terminal.
“It had multifunctionality that no one else in the industry had ever done,” Winfrey said, adding that the company sold $8 million in prepaid cards in January.
Winfrey said the success of that software is directly attributable to three things: the ability to give retailers a hassle-free way to offer customers more options, excellent customer service, and the fact that prepaid cellular is proving increasingly popular in a down economy.
“As people in a great country,” Winfrey said, “we get a little bit spoiled and we enjoy certain creature comforts … we don’t like to do without our microwave, our car or our cell phone.”
Before the recession, 90 percent of cellular users were on plans, Winfrey said, but “that has dropped to a little under 60 percent.”
Winfrey predicts that when the dust settles from the economic implosion, about 30 percent to 35 percent of cellular users will stick with prepaid options.
Terry Peeler, the first of about 200 sales agents to join ECS, said he was drawn to the company because of its fair business practices.
Based in Baton Rouge, La., Peeler was representing a company that was nudging him out of business, going so far as to contact a retail chain directly and offering to cut them a deal if they took Peeler out of the chain.
After contacting ECS, which was almost ready to launch its new prepaid services, Peeler joined the team, bringing the two dozen or so stores he represented with him.
“I wouldn’t even think of looking for another company to do business with,” Peeler said.
Winfrey is confident his company is poised to have another record year of growth, with the expectation of adding as many as 450 to 500 stores a month through summer.
“It won’t be long before we’re knocking down $10 million months,” Winfrey said.
“We should be (near) $100 million at the end of 2010,” Winfrey said, pausing before adding, “It’s weird for me to say.”[[In-content Ad]]
