General
Archived posts from this Category
A Case For Regulating Debit Card Fees
Posted by anandkgoel on 17 May 2010 | Tagged as: Analysis, Education, General
An amendment sponsored by Senator Dick Durbin to tackle “swipe fees” passed last Thursday in a 64-33 vote. This amendment focuses on how much Interchange fees issuing banks can charge merchants for accepting debit cards. Although this amendment still has to go through several hurdles Continue Reading»
Interchange fees cost you more than you realize
Posted by anandkgoel on 05 Apr 2010 | Tagged as: Education, General
This is an interesting article from WalletPop, a consumer finance website. Click here to read. It talks about the broader economic impacts of interchange fees. While we don’t think that reducing interchange will increase jobs as the article asserts, we do agree that Visa and MasterCard have unchecked pricing power. This pricing power manifests every year in the form of higher dues and interchange fees. Continue Reading»
The Basics of PCI
Posted by srini on 26 Mar 2010 | Tagged as: Education, General
There is significant amount of buzz and concern about PCI compliance with merchants. Merchants are particularly concerned when they hear of data breaches from household names like TJX Companies, OfficeMax, Boston Market, Barnes & Noble, Sports Authority or large sophisticated processors like Heartland Payment Systems. Perhaps more acutely, merchants are paying nuisance fees guised with names like PCI compliance or PCI non-compliance. And now many processors are offering PCI insurance in the event of a data breach. Like extended warranties, PCI insurance doesn’t make sense for most companies. There are specific situations where PCI insurance is valuable but you should really understand your organization’s card data storage vulnerabilities and map those vulnerabilities with what PCI insurance covers.
‘No Signature Required’ Programs Expand
Posted by srini on 25 Mar 2010 | Tagged as: Education, General
In an effort to increase the number of “Small Ticket” and “Quick Service” merchants and increase overall card usage, card networks are expanding the “No Signature Required” (NSR) programs while offering chargeback protection for these transactions. According to a Visa survey, “69 percent of participants surveyed cited either convenience or speed as the primary reason for using their credit or debit card.” Increased convenience by not having to sign for a transaction leads greater card usage and faster checkout for the consumer. This convenience is also enjoyed by merchants and card networks through increased transactional revenue. Continue Reading»
2010 Spring Interchange Updates (Increases) are Here
Posted by srini on 13 Mar 2010 | Tagged as: Analysis, Education, General
Visa, MasterCard, and the PIN debit networks are starting to release their annual Spring interchange and dues updates. For the most part, the updates reflect interchange increases that will be passed on to merchants, and will drive up the overall effective cost of electronic payments.
Visa has taken a major step by pricing a Visa signature debit card (check card) transaction the same as a Visa Interlink PIN debit transaction, both at 0.95% + $0.20 plus assessment or switch fee, respectively. Other PIN debit networks are also increasing their interchange rates or eliminating the cap on interchange fees, and thus, are slowly eroding the cost differential between signature and PIN debit transactions. Star was the last major debit network to remove its cap on interchange fees. Â Continue Reading»
U.S. Retailers Receive $1.1 Billion Payment In Visa/MasterCard Antitrust Case
Posted by anandkgoel on 22 Dec 2009 | Tagged as: General
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»
CFO Magazine Article – Use of Third Party Services
Posted by anandkgoel on 24 Nov 2009 | Tagged as: General
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.
GAO Releases Interchange Report
Posted by anandkgoel on 24 Nov 2009 | Tagged as: Analysis, Education, General
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»
Focus on Interchange Fees
Posted by anandkgoel on 20 Oct 2009 | Tagged as: General
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»
Card Fees Pit Retailers Against Banks
Posted by mike on 17 Jul 2009 | Tagged as: Analysis, General
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.
