United States, Ca... "MergePoint is a limited liability company founded in June 2000 in order to provide software and related services to credit reporting agencies (CRAs). More than 2,200 CRAs exist in the United States today, together filling the critical role of processing credit reports for hundreds of thousands of remote lenders, employers, property owners, and consumers. The CRAs are serviced by more than 17 different software developers who provide them tools to extract data from the three credit repositories (Trans Union, Experian, and Equifax) to create a credit report. Approximately half of the CRAs use an in-house software program and the remainder purchases a program from an external vendor. Over 600 CRAs opened their doors last year, and requests for credit reports have grown at a rate of 11% per year since 1997. NCRA, the flagship professional association of the credit industry, estimates that over 1,000,000,000 reports were pulled in 1999, and that credit reporting is now a $14 billion industry. This is a growth fueled in part by the introduction of new types of non-mortgage credit reports and those reports' new uses in employment, rental housing, and other financial service arenas. MergePoint is entering this marketplace because the credit reporting industry is poised for change. The players in the credit industry have just not kept pace with the increased demand. The credit reporting infrastructure is antiquated, with outdated technology that is costly and unreliable, abysmal levels of customer support, as well as poor training and marketing programs. Further, the pricing models favor entrenched players and discourage the emergence of new CRAS and credit products that will be necessary to meet demand. More than 50% of CRAs surveyed are unhappy with their current systems provider, and except for the CRAs with in-house systems, no one software provider has more than 5% of the market. Many credit reporting systems providers have not adopted technological advancements that are common in other areas of business, primarily because their customer base is captive: CRAs must use credit reporting software because processing the three-bureau-merged report required by Fannie Mae, the largest mortgage purchaser in the country, requires extensive time and is very inefficient to do by hand. The top packages on the market are legacy systems, with 3 of the 5 offering graphical and windows-based only within the last year and none of them utilizing an Internet front end or offering an Internet data transport. There have been no significant innovations in credit reporting software since the early 1990s. The industry is just starting to react to the need for these products. At the recent NCRA annual conference, one CRA owner commented, ""It is time for somebody to step up to the plate and force the entrenched players to start meeting the needs of their customers."" Founded by credit experts, technologists, and experienced business people, MergePoint is in a position to become the company that will change the landscape of the industry. Over the next two years, MergePoint will introduce software products and related services that will capture the credit reporting market, immediately winning the loyalty of CRAs, remotes and their clients and catapulting the entire industry to a new level of efficiency and customer service. The first of these products, MergePoint Plus (MP Plus), will be released to market in first quarter 2001. Preliminary tests show that the MP Plus user interface can reduce credit-reporting labor costs by 20-40% over the software currently in use. Further, MP Plus utilizes an Internet front-end and uses an encrypted Internet-based data transport that significantly reduces the customer setup costs and the downtime CRAs currently experience on a daily basis from failed dial-up connections to the repositories. In an unprecedented move, MergePoint will initially be providing enhanced technical support for free to CRA customers, responding to the fact that approximately 75% of CRAs list high tech support costs as one of their primary business issues. MergePoint's business model can sustain free technical support primarily because of the relatively low maintenance requirements of the MergePoint technical architecture. The increased transaction volume that will come when CRAs can reliably and easily use their systems will further offset technical support costs. Future products will include snap-in modules to the MP Plus package that will allow CRAs to process tenant screening reports, pre-employment verifications, and business credit reports. These products will be introduced in 2001 and 2002 in tandem with increased market demand. The NCRA estimates that by 2003, pre-employment credit screening will grow from the 5% that it is today to more than 30%. MergePoint will also introduce Loan Origination Software integration modules that allow remote housing lenders to utilize CRA reports more easily and modules to integrate with providers of information related to flood certification, unlawful detainment, public records, and other verification-related services. And finally, in late 2001, MergePoint will be commercializing its turnkey marketing program called Remote Access Marketing, piloted and proven by one of its founders, that will enable CRAs to pay an additional fee in exchange for active support in signing up lenders, property owners, employers, and others as remote customers. To help m...
Chief Executive Officer