Michael Long and the art of starting again

A napkin is a charming place to start a payments company. It offers very little room for a spreadsheet, and absolutely none for a committee. In David Jones’s recollection, that was where he, Michael Long and Louis Hoch worked out the plan for Billserv. The company began in July 1998. Its business was electronic bill presentment and payment: helping the familiar household bill acquire an online life.

Long would spend the next 24 years as chairman of the enterprise that eventually became Usio. Along the way, its principal business was sold, its name changed, its payment operations grew, and its chief executive’s office passed to his longtime partner. The napkin provided a beginning. Keeping a company going required considerably more paper.

There is a useful way into Long’s story before the corporate names and transaction totals arrive. Jones remembered him as the technology executive who gave a young programmer without formal training a chance. Years later, Hoch remembered a colleague who made people feel their ideas mattered. Between those two recollections sits a career in an industry where listening to a customer could be as consequential as writing the software.

A programmer gets a chance

Long’s professional background joined executive management to systems development. Before Billserv, he was vice president of information technology at Billing Concepts, a third-party billing clearinghouse for telecommunications companies. He also worked in business development at Andersen Consulting and ran his own systems consulting business. His experience covered publicly traded businesses as well as work for hardware and software companies.

That background put him close to a practical problem: companies could generate bills, but getting the information into the right electronic channels involved another set of relationships and systems. Billserv’s opportunity was to do that work for them. A customer’s bill had to travel between businesses, banking services and consumers without requiring each participant to assemble the whole arrangement alone.

Jones had entered Billing Concepts as a website programmer after an introduction to Long. In his later account, Long took a chance on his ambition despite his lack of formal training. Jones subsequently developed an electronic billing proposal, presented it within Billing Concepts, and eventually joined Long and Hoch to launch their own venture.

The detail matters because it gives the founding story a human scale. Before there was a company to run, there was a person to hire. Long’s decision created an opening for someone who would become a co-founder. A résumé can describe experience very neatly; it has a harder time measuring what happens when experience recognizes possibility in somebody else.

The business changes beneath the name

Billserv’s early work placed it between billers and the networks that could put their bills in front of consumers online. An October 2001 agreement with Spectrum, a bank-backed payments network, illustrates the arrangement. Billserv would distribute client bills to a network serving nearly eight million online consumers through its founding financial institutions: JPMorgan Chase, Wachovia and Wells Fargo.

Long emphasized that billers could keep their existing banking relationships while gaining access to the network. It was a revealing commercial consideration. Selling new technology often involves persuading customers to change something they already understand. Here, part of the attraction was how much of their established arrangement they could retain.

Then came a much sharper change for Billserv itself. On July 25, 2003, the company sold substantially all its assets to Saro, a subsidiary of CyberStarts. The agreed price was $4.8 million, including $700,000 subject to earnout provisions, plus the assumption of certain liabilities. The assets included the infrastructure supporting its electronic bill presentment and payment services.

Those assets had produced nearly all its revenue. The company discontinued its primary electronic billing operations and concentrated on building an electronic payments business, while retaining its consumer bill-payment portal, bills.com. It adopted the name Payment Data Systems that July. This was a substantial reconstruction of the business Long led, with a new operating focus attached to a new name.

Several jobs, one desk

Long’s responsibilities expanded during the rebuilding years. Alongside chairman and chief executive, he became chief financial officer in September 2003. He held that finance role until March 2015. For more than a decade, the person directing the business was also formally responsible for its finances.

It is an unusually compact way to describe a long stretch of work. Three titles fit comfortably in a single line of a biography. The operating questions behind them are less compact: which services to develop, how to pay for them, how to serve merchants and billers, and how to explain the results to shareholders.

The company’s offering grew around credit and debit cards, Automated Clearing House transactions, and prepaid services. These are different ways for money to reach its destination, with different requirements for the businesses using them. For a payment processor, the breadth of the offering matters only when the individual services work for the customer who needs them.

Long also served as an outside director at FaceKey, a San Antonio company developing fingerprint and facial recognition systems for security applications. His professional interests extended beyond moving money to another systems problem: controlling access. Both fields demand attention to the awkward details that sit behind a reassuringly simple user experience.

A listing earned in increments

By 2013, Long was publicly pursuing a listing on a major exchange. Payment Data Systems had reported substantial increases in its 2012 processing activity, including electronic checks and credit cards. His stated ambition paired operating growth with a place on a larger trading market. The destination was clear, even if the eventual exchange differed from the one he mentioned at the time.

In April 2015, the board appointed two outside directors, Miguel Chapa and Kirk Taylor. The appointments created a five-member board with three outside directors and fulfilled one of the requirements for the anticipated Nasdaq listing. Corporate milestones sometimes arrive dressed as governance housekeeping. This one involved making room at the table.

The company’s shares began trading on the Nasdaq Capital Market on August 11, 2015. In December, Hoch was scheduled to ring the exchange’s closing bell. For an enterprise that had sold its principal operating assets twelve years earlier, the listing marked a distinct new chapter. The work between those dates deserves as much attention as the ceremony.

Long’s own language remained focused on the businesses using the service. In March 2016, he said, “merchants need to manage the complexity to thrive.” It is a serviceable description of the market he worked in. A merchant may want a payment to look effortless; somebody still has to manage the complexity on the other side of the counter.

The numbers need their small print

In 2015, Payment Data Systems processed more than $3.3 billion across more than 14.3 million transactions. Its revenue was $14.4 million, up 7.4 percent from 2014. Those figures describe two different kinds of scale. The dollars travelling through a payments platform belong in a different column from the revenue the platform earns.

The results also resist an entirely tidy success story. Revenue increased, but full-year net income fell to $1 million from $3.8 million the previous year. Operating income declined too. A record processing total could coexist with weaker earnings. The business required more reading than a large number printed in bold might suggest.

The following year brought further pressure. For 2016, the company reported $2.9 billion in processed payments, $12.1 million in revenue and a net loss of $1.2 million. Long’s years in charge and on the board included expansion and setbacks. Leaving both in the picture makes the persistence more intelligible than an uninterrupted procession of milestones would.

Handing over, staying involved

On August 4, 2016, Hoch became chief executive. Long remained chairman, turning his attention to leading the board after eighteen years as CEO. Their association already stretched back through Billing Concepts and US Long Distance. The handover brought an existing working relationship into a new arrangement rather than introducing a stranger to the business.

In June 2019, Payment Data Systems became Usio. The new name referred to a fusion of payment technologies and services. Executives marked the change with a Nasdaq closing-bell ceremony on July 1. Long was still chairman, now overseeing a company whose name reflected a wider collection of payment capabilities than the original billing venture.

Names do useful work in a company’s history. Billserv explained an initial service. Payment Data Systems announced the next operating emphasis. Usio gathered several capabilities under a shorter banner. Long’s chairmanship connected all three, providing continuity through changes that a casual glance at a stock ticker would scarcely reveal.

What his colleagues remembered

Long was born in Little Rock, Arkansas, on October 3, 1944. He later made his home in New Braunfels, Texas. His family remembered his patience, empathy and willingness to help, alongside his devotion to his wife, Kathy Ayers, his children and seven grandchildren. The descriptions bring the executive biography back to a more familiar scale.

After Long’s death on September 7, 2022, Hoch described him as a “mentor, confidant, friend, and business partner for nearly 30 years.” He also recalled Long’s attention to customers, employees and shareholders, and his ability to make people feel their contribution mattered. It was a colleague’s assessment built on a long working association.

“mentor, confidant, friend, and business partner for nearly 30 years”

Louis Hoch, remembering Michael Long · 2022

On September 12, Usio’s board unanimously appointed Long to the honorary, posthumous position of chairman emeritus. Hoch became chairman as well as chief executive. Long’s name remains on Usio’s leadership page in that memorial role.

The company he helped start had travelled from electronic bills to a broader payments business, through a sale, a rebuilding period and a succession. The people who worked beside him remembered something less easily entered in a financial table: he gave their ideas a hearing. For a career spent arranging how things move between people, that seems an apt place to end.