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Transparent Financial Services, or TransFS, helps small businesses find credit card processing services (FinovateStartup 2009 video here). The company says it can cut an average of 40% off processing costs. In our test, the process worked flawlessly and was one of the best online application experiences we've ever had.

TransFS derives its revenue from generating leads for the card processors. The service is entirely free to the small business applicant. The company differentiates itself from other lead generators by providing comparison-shopping information and automating the application process.

How it works

1. Users complete a three-part online form at TransFS, answering questions about their business and card-processing needs (screenshot #1). Until a processor is chosen, the business does not need to provide any sensitive info. A new feature announced this month speeds up this process by verifying businesses based on their name and ZIP code.

2. TransFS conducts what they call an auction, allowing pre-screened service providers to bid for the merchant's business. However, in our test, we received all five "bids" immediately. So it was less an auction, and more a traditional price comparison. But the user experience was superb.

3. The small business owner is presented with the bids in a standardized form for easy comparison (inset). From the bids page, the user can view the bidder's service contract and anonymously contact the bidder for more information.

4. To purchase, applicants simply click Select Bid and TransFS introduces the user to a real person at the chosen processor and then facilitates the application process. Users can upload required documents to the processor through the TransFS site.

TransFS claims that the process requires less than five minutes. Our 4.5-minute test confirmed that estimate.

The company also provides a free rate-comparison report. Users can upload, email or fax a recent statement to get a custom analysis of their potential savings.

TransFS recently released its Credit Card Processor Directory where users can research, rate, and review credit-processing companies (screenshot #2). The directory allows users to search Transparent Financial's database of more than 800 card processors and access BBB ratings and other information.

According to Compete, TransFS saw 6,700 unique U.S. visitors in March, more than double the 3,000 in February (see note #1).

Source: Compete.com April 2010

Note: 1. Keep in mind that Compete's traffic estimates are not always reliable at this small of a sample size.

#1. TransFS collects business and card transaction data

 

#2. The credit card processor directory

Here are the news headlines we posted this week on Twitter (follow it here).

DebtGoal raises first round of VC funding - In its first round of institutional funding, DebtGoal raised $2 million. The round was led by Tugboat Ventures, with participation from seed investor New Cycle Capital. To date, DebtGoal has raised a total of $3.1 million. http://bit.ly/bZxzq4

Diversinet awarded two patents - Diversinet was awarded two patents for mobile technology. One patent was awarded for a system that detects and classifies mobile devices, allowing apps to be matched with handsets. The other is for security technology for mobile digital data delivery. http://bit.ly/cDkHOU

Finovate Alums Among Webby Award Honorees - Finovate alumni FiLife, Kapitall, Lending Club, and SimpliFi are among the 12 honorees in the Financial Services category of the 14^th annual Webby Awards. Fifteen percent of Webby nominees received honoree status. The actual Webby awards, presented by The International Academy of Digital Arts and Sciences, will be announced June 14^th. http://bit.ly/cqC9Fa

GreenSherpa holds contest for savings tips - GreenSherpa is hosting a contest for reader-submitted money-saving tips. On April 21, two winning tips will be randomly selected. Winners receive annual subscriptions to GreenSherpa. http://bit.ly/cDakPl

Lending Club raises $24.5 million - Lending Club received $24.5 million in investment funds from Foundation Capital, Morgenthaler Ventures, Norwest Venture Partners, and Canaan Partners. The company says it will use the capital for new loan products, new investment tools, and website improvements. http://bit.ly/9zU4lO

Lending Club also recently announced its fourth Twitter contest, in which daily winners will be rewarded for tweeting about the company's ongoing photography contest. Twitter winners will receive shirts, messenger bags, and other products. http://bit.ly/d19g5g

Mint adds new feature to track cash spending - Mint added a new feature that allows users to manually enter spending data. Previously, all transactions had to be automatically uploaded from financial accounts. http://bit.ly/a3EtRb

Monitise reports more than 2 million registered users - Monitise has passed the 2 million registered user mark. The company stated that the increase in users was driven by increased uptake of its smartphone apps. Monitise serves more than 240 banks and financial institutions in the U.S. and U.K. http://bit.ly/cjMh7R

SecondMarket launches asset-backed securities market - SecondMarket, which provides a marketplace for trading in illiquid assets, announced that it launched a market for asset-backed securities. The move adds a ninth asset class to SecondMarket's platform. http://bit.ly/b2GHFc

The company also announced $70 million in private company stock transactions this March, the highest amount that SecondMarket has ever traded in one month. In contrast, the company traded $44 million in private stocks in February. The company reported that 41% of the transactions were Facebook stock trades. http://tcrn.ch/bpcXpQ

SeerGate announces new COO - Jim Fancher has joined SeerGate as its new chief operating officer. Fancher was previously general manager at FIS subsidiary Endpoint Exchange Network and has also served as senior vice president of marketing at VECTORsgi and CEO of Gilson & Associates. http://bit.ly/9FilPo

SmartyPig recognized at Prometheus Awards - SmartyPig was honored Breakout Company of the Year by the Technology Association of Iowa in its fifth annual Prometheus Awards presentation. http://bit.ly/bUi0Hf

ThreatMetrix provides fraud detection for OnlineLabels.com - ThreatMetrix is providing fraud detection for OnlineLabels.com, which produces laser and inkjet-printable labels. The company's online ordering system is automated, making it an easier target for credit card fraud. ThreatMetrix helps the company analyze transactions to detect suspect orders. http://bit.ly/bGRFMl

Transparent Financial Services adds business verification system - Transparent Financial Services, also known as TransFS, added a business-verification system that speeds up the company's submission process. The new system identifies businesses based on their name and ZIP code. http://bit.ly/amDwqf

Zopa honored for innovation - Zopa was recognized by the U.K.'s Nesta, the National Endowment for Science, Technology and the Arts, in its Open 100 competition, which honors firms for open innovation. Peer-to-peer lender Zopa was awarded in the open business category. http://bit.ly/bs82cL