I’ve been reflecting the past few days on thedeparture of Doug Bergeron as CEO of VeriFone Systems Inc. I recallspeaking with the brash, cocky executive when he first took overthe payment-terminal maker 12 years ago. One could tell he wassomeone who got what he wanted and wouldn’t stand for anyonedisagreeing with him. The staff he put together was based on allbeing on the same page.
Bergeron’s attitude and commitment worked well for a number ofyears, and VeriFone succeeded in becoming a major global player.Bergeron even was able to acquire most of the non-U.S. operationsof VeriFone’s chief rival, Hypercom Corp., now known in the U.S. asEquinox Payments LLC (ironically owned by Gores Group LLC, the samecompany Bergeron helped to buy VeriFone from Hewlett-Packard.)VeriFone now is a public company.
But along with company growth came growing pains, and Bergeronlost his footing along the way, first with an accounting error thatrequired VeriFone to restate its earnings for 2007 and the firsthalf of 2008. That cost Bergeron his board chairman title.
Later, as the market began changing around him, the company founditself facing unexpected competition, when newcomer Square Inc.,led by an equally brash exec named Jack Dorsey, who earlier createdTwitter, had the nerve to suggest there was a terminal marketVeriFone had missed. Square quickly captured the micromerchantmarket, which prompted VeriFone to fire back with its own product,Sail, to compete against Square, but in doing so VeriFone losttrack of its commitment to address the needs of its core clients,which were facing EMV-related issues. Moreover, the same smartphonerevolution that spawned Square similarly created demand formobile-related innovations from larger retailers, but VeriFoneseemed preoccupied with other concerns.
For a time, it seemed Bergeron could talk his way out of board andinvestor unrest. He even overcame a Securities and ExchangeCommission investigation into alleged insider trading when theagency ended its probe without action. And VeriFone’s decision tosell its Sail micromerchant operations earlier this year was a signthe company was getting back on track.
But the hammer came down on Bergeron when VeriFone reported in afiscal first quarter 2013 SEC filing that the company engaged inbusiness activities with Iran banned by U.S. sanctions against thecountry. VeriFone also said it faced a shareholder lawsuit allegingsecurities fraud.
Bergeron was forced to step down from his role as company CEO onMarch 12. For him, much of the time he spent at VeriFone was apositive one for the company. But distractions got the best of him.And, like the Hypercom brand he was able to eliminate, DougBergeron, too, might be a bygone name in the annals of the U.S.terminal market.
