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Who's who: Neil Johnson

In an industry in which many are obsessed with the book value of their ATM portfolios, Neil Johnson is focused on the value of another book - the good book, to be exact. Both coworkers and competitors say that the president of International Merchant Services provides proof that ethics and entrepreneurial drive are not mutually exclusive qualities.

July 24, 2002

In an industry in which many are obsessed with the book value of their ATM portfolios, Neil Johnson is focused on the value of another book - the good book, to be exact.

Neil Johnson

Johnson, the president of International Merchant Services (IMS), a Euless, Texas-based ISO with some 3,000 machines under contract and about $15 million in annual revenues in 2001, has a bachelor's degree from Howard Payne University with a double major in psychology and Bible. He also studied Greek in college so he could read the New Testament in its original text and went on to get a master's degree in divinity from Southwestern Baptist Theological Seminary.

In the age of Enron, Johnson is proof that ethics and entrepreneurial drive are not mutually exclusive qualities.

His boss has "intrinsic integrity," said Tom Hale, IMS' national accounts manager. "There's an old saying that a fish stinks from its head, and that's true of most companies too. The reputation starts at the head and moves down."

Hale described how Johnson first hired a costly third-party service technician to repair one of the company's ATMs in a California bowling alley and then dispatched a second technician from Texas when the first tech was not successful.

"That showed me that he had the integrity to take care of the customer first and the foresight to realize that it would ultimately pay off," Hale said. "There is a reason why this company is called International Merchant Services, not Zip Cash or Wahoo Cash."

Tom Hannon, an ATM veteran who sold his Hanco Systems to eFunds in February and now leads ATM management companies in the UK and Ireland, said, "I wish every competitor ran their business like Neil, with integrity."

Chip off the old block

While Johnson attributes his spiritual side to his mother, he got his sales chops from his father, who sold frozen pizzas to grocery chains. As a teenager, he accompanied his dad on trips and listened to his phone sales pitches. "He'd sell truckloads," Johnson said.

Johnson's first jobs were mowing yards, shoveling snow and selling greeting cards and homegrown vegetables door-to-door, all before the age of 12. When he was 18, he formed his own company and sold institutional pizza to small colleges.

After earning his undergraduate degree in 1972, Johnson enlisted in the Army, where he served as a hospital social worker. He and wife, Esther, married in 1972 and had their first child in 1973.

Johnson worked at Equifax, the credit scoring firm, to help pay the bills while studying for his master's. He conducted background checks on potential employees for companies, dictating his notes to be transcribed later by another Equifax employee.

After Equifax, Johnson headed up two of his own companies, Check Verification Technologies, which developed and sold check verification and recovery systems and credit card equipment, and Associated Financial, a collection agency specializing in check recovery.

Introduction to ATMs

He founded IMS in 1991, initially selling scrip machines. Texas was a hotbed of scrip and ATM activity because of a 1989 state law that allowed deployers to collect surcharges.

In 1993, Johnson helped convince Triton Systems, the supplier of his favorite scrip terminal, to add a dispenser to the product and create its first ATM. After Triton delivered a prototype of the 9500 in the spring of 1994, Johnson took it to a petroleum dealers show. "I sold 10 machines on the floor, and they weren't even manufacturing it yet," he said.

"(Johnson) was there at the beginning," said Bill Jackson, Triton's chief technical officer.

He remains a reliable source of feedback for the manufacturer, Jackson added. "It's a lot more valuable to us when we get honest answers from our distributors, even when they're not necessarily the answers we want to hear. Maybe you get a great deal on blue paint, but they come back and say it would look better in red. You better go out and get some red paint."

In 1996, Johnson joined forces with Hannon and several others to form the National Independent ATM Services Association, a group devoted to promoting industry best practices that later merged into the Electronic Funds Transfer Association.

Johnson remains an activist, serving on the North American Board of the ATM Industry Association and on the ATM Ad Council. He sees it as a "payback" to an industry which has been good to him as well as an affirmation of his Christian faith. "If I can help get a merchant from getting hoodwinked, that's a big plus for me," he said.

The family way

Johnson's firstborn, Jonathan, and second son Stephen, born in 1977, followed Johnson into the ATM business. Jonathan works with IMS' software developers and IT crew, while Stephen is involved in the company's marketing efforts. It's possible, Johnson said, that some of his other children -- 18-year-old Conrad, 16-year-old Caleb and 14-year-old Laura -- could also end up in the family business.

"You have to admire somebody who has raised so many great kids," said Hale, noting that it's not uncommon for Johnson to answer a call on his cell phone during a meeting and say "I've got to get to the soccer field," where Laura is a star athlete.

Johnson's emphasis on family is reflected in the many hobbies he shares with Esther, his wife of 30 years, including Bible study, attending their children's sporting activities and counseling other couples at their non-denominational church.

A little sheepishly, he admits they both enjoy romance novels. Esther would read aloud to him in the car on long trips to prevent him from falling asleep, and "I got hooked," he said.

In early 2001, Johnson introduced a full-motion video topper, which he believes may be a key to his continued success in the ATM business. IMS is already taking orders for the second version of the topper, which he said will roll out in September. He has also made a deal for his content management software to be used by a digital advertising company.

In addition to the topper and the software, IMS has invested in basics such as a service staff and a large parts inventory. "It's been my belief almost since the beginning that the companies with a strong service infrastructure will be the ones to survive," Johnson said.

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