Wednesday, September 29, 2010

Credit Card Processing is a $40 Billion Dollar Industry

Just how much money is involved with the merchant service industry? The answer in the US is $40 Billion. According to a report by Research and Marketsleading industry intelligence company:

The US credit card processing industry includes about 2,000 companies with combined annual revenue over $40 billion. Major companies include Banc of America Merchant Services (a joint venture between Bank of America and First Data), Alliance Data Systems, Total System Services, Heartland Payment Systems, and Global Payments. The industry is highly concentrated: the top four companies account for nearly 40 percent of industry revenue.


Demand is driven by consumer spending. The profitability of individual companies depends on efficient operations, as services are sold largely based on cost. Large companies have big economies of scale in processing and can provide more services; small companies can compete by specializing in industries and providing custom services. The business is capital-intensive: average annual revenue per employee is about $330,000.


Processors provide transaction services to banks that issue credit cards and to merchants that accept credit card payments. Merchant products include authorizing, capturing, and settling merchants’ credit and debit card transactions, and handling chargebacks. Chargebacks occur when a consumer disputes a charge and charges it back to the merchant. Processors also sell or lease point-of-sale (POS) terminals. Card issuer products include transaction authorization and posting, statement generation and printing, and card embossing.

Large processors such as First Data Corporation and Total System Services provide services to both sides of the transaction. Small processors typically offer either merchant or card issuing services, and may specialize ...

Tuesday, September 21, 2010

Bridging the language gap in business....Translations

Here is one tip that can help you run your business better potentially:

I recently was dealing with a potential client who spoke Spanish but not much English. She could understand me but speaking for her was difficult. I told her not to worry and I would email her all the information she needed to be set up for a merchant account. I then went ahead and wrote my whole email into Google translate and it spit out a translation which I then emailed to my client. She must have liked the Spanish email, because she sent in her application without question. The translations available are quite extensive and I believe you'll find this web site to be a very useful tool.

Tuesday, September 14, 2010

Costco Merchant Services: Is it a Scam?

If you are searching for great merchant service rates, you may come across Costco and it's promise of rock-bottom merchant account rates. Costco, known for it's low prices on almost everything so why not credit card processing, right? I'll let you decide that for yourself. The first thing you should know about the costco merchant service program is they don't have anything to do with it other than their name. They have partnered with Elavon, a large processor to handle all the heavy lifting. With all the claims of great rates and service, you would not be doing your due diligence if you did not at least give Elavon the once over. When you do of course, you may not like what you read. These complaints should not come as a surprise however, as it follows the old adage, " if it's too good to be true, it probably is".

Sunday, September 12, 2010

US Credit Cards: Slow to Stop Hackers?

As I mentioned previously, there is a movement to proliferate a new credit card that will minimize fraud. This article seems to think that the US is slow to adopt measures that will put the breaks on fraudulent credit card activity.  Heartland Payments,  a processor that had been hacked and led to a large data breach in 2008 is now in the news yet again.

 As per the article: In Austin, police are investigating a series of frauds that affected customers of Tinos Greek Cafe, a local chain whose credit card transactions are processed by Heartland. Police said they think the Tinos-related problems were caused by a security breach in the network linking the restaurants and Heartland. Some Tinos customers reported phony credit card charges on purchases made in this country and overseas.

What's the bottom line? US banks are not willing to deal with the costs associated with advance technology that will make credit cards more secure. They feel the amount of loss via fraud does not justify the expense.