AI will transform every part of payments, and the biggest change is in sales and go-to-market. The industry will consolidate, and the winners will run on far more technology. I want to lead that change in merchant services. Fern Capital is assembling a software-led merchant services platform from the independent sales organizations that sign up and serve America’s small and medium businesses.
1. Why merchant services, and why ISOs
Every small and medium business that takes a card pays someone to make that possible. Much of that work in the United States is done by independent sales organizations: the ISOs that sign merchants, set their pricing, service them, and earn a residual on every transaction for as long as the merchant stays. The market keeps growing because these businesses keep taking more of their revenue on cards, and the residuals keep paying because merchants rarely move.
Most ISOs were founded fifteen to twenty-five years ago by a salesperson who was good at it. They are owner-run, profitable, and run for cash. Many have never engaged a banker or a buyer. Their founders are reaching the end of a chapter, and the books they built are worth more together than apart: inside a scaled, software-led acquirer the same residual stream carries better economics, better processor terms, and a product the merchant would not otherwise get.
The larger platforms have already consolidated the top of the market. The long tail of owner-run ISOs has not been rolled up, because until recently nobody could run the back office for a hundred small books at a cost that made sense.
2. Why AI changes the answer now
The mess is the margin. A small ISO runs on spreadsheets and residual reports that do not reconcile. The owner is the finance team, the compliance team, the support desk and the reconciliation clerk. Small-merchant volume is moving to software platforms that bundle payments with the tools a merchant runs the business on, and a standalone ISO cannot fund that software build on its own.
That build used to take years and a large team. A merchant portal, reconciliation, agent reporting and origination tools now take months with a small one, because agents do the work that used to need headcount. The largest gain is in sales: finding merchants, pricing them, onboarding them and supporting the agents who sell to them. The rule for the platform is simple. Rent what is commodity: the risk engine, the gateway, the support agents. Build what runs on our own data: reconciliation, agent reporting, origination. Own what matters: the merchant contracts, the residuals, and the pricing.
The first pieces of that back office already exist and are free for any ISO to use. OpenResidual checks the processor’s file against the ISO’s Schedule A, finds every merchant paid short and drafts the dispute. OpenRetain finds the merchants at risk of leaving while there is still time to keep them. Both are open source, and both run inside Fern today. The platform’s back office is being built in public before the first acquisition closes.
3. Who is leading it
Roll-ups in payments fail in the integration, not the acquisition. The buyer underwrites a residual stream and inherits a back office nobody understood. I have built three payments businesses from zero and run the operations behind them: enrollment, reconciliation, risk, support, and the bank and network relationships that make money move.
I founded Finexio and led it as CEO for eleven years, with J.P. Morgan as largest investor and five publicly traded banks on the cap table. Before that I grew the payments business at Change Healthcare and ran a healthcare payments portfolio at Mastercard, and before that I was a founding member of EY’s West Coast working-capital practice. Fern Capital runs today on the same AI back office the platform will use: fast to build, transparent to audit, and run from anywhere. My role in the roll-up is executive chairman, setting the technology and M&A strategy, with a CEO running the platform day to day and the founders who sold staying close.
4. What it means for ISO owners
You built a business that pays every month. Selling it outright turns that into one check and a goodbye. Joining Fern turns it into a stake in something bigger, built with people who know exactly what you built.
Cash now, and a stake in what comes next
Owners take cash at closing and roll part of their ownership into the platform. Your book is bought as an ISO. The platform is being built to be valued as a technology company. That difference is the upside, and your rolled stake is how you share in it.
Your team and your family share in it
The people who built the book with you stay close, with a real part in the upside. For many owners this is the largest financial event of their career. Done this way, it becomes a second chapter for the whole team, and wealth that lasts for their families too.
The fun part
You stop being the finance team, the compliance desk and the reconciliation clerk. The AI back office takes that work. You get back to what you started the ISO to do: sell, build relationships and win merchants, with tools no independent ISO could build alone. And you get a seat at the table building a real technology company, in an industry you know better than anyone.
5. Who I want to meet
Three groups will build this platform with me.
ISO owners
Owners of a wholesale ISO with its own bank sponsorship and BIN, or of a smaller ISO, agent office or residual stream. Southeast preferred, not required. Your team stays close, and every conversation is direct with you, never an auction.
Talk to me about your ISOCapital partners
Funds with payments experience that have owned or built a merchant business before, can start at a lower-middle-market check and scale it, and want an executive chairman who has built payments businesses before.
Talk to me about participating in the strategyIndustry operators
A CEO or president for the platform, and the people who run sales, agents and risk inside ISOs today.
Talk to me about a role6. An open conversation
The best version of this platform gets built with the people who already know the industry. I want to compare notes: where the economics work, where they break, and where merchant services goes next. I will open my network in return: the banks, processors, sponsors and operators I have worked alongside for twenty years. Come with questions as much as answers.