From PRNewswire – http://sanfrancisco.bizjournals.com/prnewswire/press_releases/New_York/2009/12/08/NY22671

NEW YORK, Dec. 8 /PRNewswire/ — In an unprecedented payment to U.S. retailers, the law firm Constantine Cannon LLP today announced that merchants across the nation will receive checks this week for approximately $1.1 billion as part of a landmark antitrust settlement over Visa and MasterCard-branded signature debit cards. Continue Reading»

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I found the following article interesting and relevant, especially given the focus of Optimized Payments.   There are so many subtlties, nuances, and changing dynamics in the marketplace when it some to the procurement of non-core products and services that it would be difficult for a typical buyer to appreciate.  And when it comes to buying merchant services, our experience has shown that the average buyer has gone through four cycles of RFPs/RFIs in their professional career.   While four cycles is meaningful, an individual or firm that has done hundreds of cycles or RFPs/RFIs will likely yield better results.  And that’s precisely what we have found with our clients…better results after engaging our firm.  Enjoy the following article…here’s a link to the actual article.

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Last week, the Government Accountability Office (GAO) released its report on interchange as required by the CARD Act that was enacted earlier this year. Read the full report here.  Continue Reading»

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I read two articles of interest yesterday…both spotlighting the focus on interchange fees and potential for reform in Congress.

The first article was in yesterday’s Wall Street Journal titled, “Interchange Fees Step Into the Spotlight.”  The article talks about the increase in interchange fees over the years in the U.S. and potential for reform via congressional action.  Banks raked in $45.3 billion in 2008 from credit- and debit-card fees charged to merchants.  75% or $34 billion of these fees go the credit/debit card issuing banks and the remaining 25% or $11.3 billion in fees go to payment processors.   Continue Reading»

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Here’s a good article from the New York Times titled, “Card Fees Pit Retailers Against Banks“. The article was published two days ago and it summarizes the latest efforts by retailers to lobby for interchange reform.

It is true that legislation could regulate and thus, reduce Interchange costs. However, regulatory action is very untenable and could take years. The banks will be very aggressive in fighting any sort of regulation, having just lost their battle with consumers in the way of Credit Card Accountability Responsibility & Disclosure Act. Moreover, lawmakers will be a bit more reticent in implementing additional bank regulations that further stresses bank profitability, especially after sector weakness and increased regulations from the mortgage meltdown and the CCARD Act.

While there is potential for regulatory relief for merchants, there are a number of things that merchants can do on their own to reduce payment costs. Our Company’s entire business model is centered around helping merchants reduce their payment costs in the current environment.

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President Obama’s sent a draft proposal of new financial regulations to Congress today. This 85-page document outlines sweeping reorganization of financial-markets are supervised since the Great Depression. It will touch almost every facet of banking from “how mortgages are underwritten to the way exotic financial instruments are traded” according to Damian Paletta at the Wall Street Journal. Continue Reading»

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If you really want to understand the economics of the payments industry,specifically Interchange, this recent Fed paper offers a good historical perspective from a economic, social, and policy perspective from viewpoint of all impacted parties – consumers, banks, and merchants.  Read the paper here.

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President Barak Obama signed into law on May 22, 2009, the Credit Card Accountability Responsibility & Disclosure Act.  This sweeping legislation has significant implications for consumers, banks, and many businesses who issue gift cards.

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Pricing in the credit card processing industry is very complex and most merchant statements do not make it any easier to understand. There are so many technical and industry laden terms (Interchange, qualification tiers, downgrades, batch fee, ACH fee, authorization fee, settlement fee, AVS fee, PCI compliance fee, etc.) that even a sophisticated financial manager can get cross-eyed. So how do you really understand your true cost of credit/debit card processing, and then use that knowledge to ensure that your company is getting the best value for merchant services? This article will help you understand and manage the effective cost of different payment cards. Continue Reading»

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Optimized Payments Consulting recently wrote a second article for the Association for Financial Professionals (AFP) about the value of leveraging PIN-debit cards to lower overall payment processing costs.  This article appeared in AFP’s Exchange magazine in April 2009.  You can read the article here.  

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