Honolulu check
verification company
plans to hire 300
over two years

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By Tim Ruel
truel@starbulletin.com

A Honolulu check-verification company that has prominent local investors plans to hire as many as 300 employees, mainly customer service call-center workers, to work downtown in the next couple years.

EpiCheck, a business of International Financial Services LLC, said it has recently secured a major contract with travel reservation services firm Galileo International and is close to reaching a potentially larger contract with Galileo competitor Sabre Holdings Corp.

Hiring will be sporadic. EpiCheck, which has 40 to 50 employees in Chinatown, hired five last week.

EpiCheck started about four years ago after local businessman Randall Preiser and check-guarantee veteran Kevin Murphy bought UniCheck, a 30-year-old Hawaii company that has spun off major check-verification firms. One spin-off, TeleCheck Services Inc., is now owned by Colorado-based First Data Corp. In 2000, TeleCheck authorized more than $163 billion in checks, the company said.

Local folks who have bought into EpiCheck are former state Attorney General Margery Bronster, attorney Arthur Roeca, investor Robert Kneisley, accountant Mark Hunsaker and Kevin Hughes, a developer of the World Wide Web.

Also, a major local insurance company bought a 2 percent stake, said Preiser, who is chief executive of International Financial Services. A total of about $3.3 million has been invested so far, and the firm has benefited from the state's high-tech tax-credit program Act 221, Preiser said. "The state has been extremely helpful in getting this enterprise going," he said.

EpiCheck has a system that lets merchants accept checks over the telephone and Internet and instantly make sure funds are available for withdrawal. Any retailer who accepts Visa or MasterCard can use EpiCheck. The firm draws revenue from each written check, though the fee is usually less than the typical credit card transaction fee, Preiser said.

EpiCheck will spend the next two to three years setting up more than 16,000 travel agencies that work with Galileo, a subsidiary of Cendant Corp. Once that's done, the potential revenue for EpiCheck is estimated at $80 million annually, Preiser said.

The Sabre deal, which EpiCheck has been negotiating for about a year, will take about the same amount of time to set up, but could generate $120 million each year, Preiser said.

The big trick for EpiCheck is securing funding in the meantime through equity financing. The firm is betting its value will skyrocket over time, and doesn't want to sell stock too cheaply, Preiser said.