There’s definitely gold in global acquiring, but there’s no gold rush. Merchant demand is real. A large software company that was selling its products globally in many countries approached First Data recently as a potential global acquirer, reports Souheil Badran, senior vice president and division manager for the e-commerce group. “They were having too many reporting problems. They were concerned about managing their foreign exchange exposure. They wanted to see if we could consolidate it into a single relationship with us to simplify their card payments,” he explains. “And they wanted one acquirer to support plans to expand into the Asia-Pacific and EMEA [Europe, Middle East, and Africa] regions. There was a substantial payoff for their cash management and treasury operations.”
And global acquiring offers growth. While the economy has becalmed many domestic acquirers and ISOs, “our business has taken off like a hockey-stick graph,” reports Carrie Bardeen Hometh, senior vice president for sales at Payvision, an Amsterdam-based international acquirer and multiple currency payment processor. “I’m hiring a new employee a week to deal with our growth. When online merchants globalize and let shoppers pay in their own currency, their sales increase. The days are gone when you can force customers to pay in U.S. dollars.”
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What sparks an ISO’s inception? What strategies do new ISOs use to compete and grow? What mistakes do typical startups make? How do they bounce back? How do entrepreneurs stay motivated and manage stress?
These are among the issues Transaction Trends will explore in our new series launching this month. We’ll be following three ISO startups, who have very graciously agreed to give us a peek into their operations: Express Transact of Orem, Utah; Leap Payments of Agoura Hills, California; and PayMint Partners of Brooklyn, New York. Each monthly installment will feature an in-depth look at all three ISOs and how their businesses are progressing. We’ll find out about the hurdles they’ve cleared—and those they didn’t—their latest opportunities and triumphs, and so much more.
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With the implementation of the new International ACH Transaction (IAT) Standard Entry Class (SEC) code on September 18, the fundamental definition of what constitutes an international ACH payment has changed. This affects all parties that rely on the ACH Network as the utility for sending international payments or for receiving payments initiated abroad. While financial institutions ultimately bear the responsibility for sending and receiving ACH payments through the Network, all parties in the chain need to understand the IAT rules, including processors, ISOs, and other vendors/providers that enable payment services, as well as the merchants themselves.
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Feature: Data-Driven Retention |
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From using more sophisticated technologies to face-to-face or phone chats, many ISOs are gathering critical data to aid in merchant retention. And the time and money spent are well worth it. “There’s no getting away from [it] when you consider that the cost of boarding a new merchant tops out at five times the cost of preventing an existing account from exiting the ranks,” notes Greg Cohen, president of Moneris Solutions in Schaumburg, Illinois.
Some data can also help ISOs avoid losing merchants. “Offering lower rates is no longer a guarantee of merchant ‘stickiness,’ and while going out of business remains the most common cause of attrition,” ISOs need to leverage the vast amount of data at their disposal that may point to other reasons a departure is imminent, suggests Henry Helgeson, president and CEO of Boston-based Merchant Warehouse.
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Vertical Markets: Unattended Kiosks |
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Author Malcolm Gladwell describes a “tipping point” as the moment when an idea, trend, or social behavior spreads like wildfire. In the electronic payments world, unattended or self-service kiosks are embarking on that magical moment as consumers increasingly require on-demand payment options that didn’t exist a few years ago. Savvy ISOs and acquirers would be wise to start planning now to take advantage of the boom ahead.
From airport check-in stands and e-commerce via smartphones to electronic voice attendants, store checkout systems, and DVD kiosks, self-service has become integral to our daily lives and has contributed to a significant cultural shift in consumer behavior. Never before in our history has the tried-and-true phrase “time is money” resonated with such authority. In fact, for 2008, Time magazine declared self-service one of the 10 ideas changing the world.
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