Square: Getting a Boost from Visa

The latest big news for Square is Visa coming on board as an investor. This no doubt gives the mobile credit card service a boost of credibility and warning shot to potential competitors that it is here to stay. What's in it for Visa? As Forbes explains they get  a piece of the action when it comes to really small business who normally use cash and are switching to credit cards. Square is a fantastic solution for people with a small side business that perhaps use it for small dollar amounts and use it somewhat infrequently. Square does not accept Amex nor can it deal well with larger dollar amounts on a daily or monthly basis (as explained here). It also does not work with a blackberry. For those who are serious about accepting credit cards they should be seeking a merchant service provider who can provide software and/or hardware for your smart phone but stay clear of contracts and termination fees.

Credit Card Companies Battle for Technology

As Visa has acquired Cybersource (including it's well know payment gateway subsidiary, Auhorize.net) it has it's competition scrambling to catch up to buy up technology in the credit card payment industry. Rival MasterCard purchased payment services company DataCash Group for $520 million in August to expand its online commerce business. MasterCard has also created MasterCard Marketplace: a discount web site for card members in conjunction with e-commerce company NextJump. DiscoverCard already has a site for discounts as well.

Visa: The Credit Card Game Video

Here is a great video brought to you in part by the New York Time. In my recent post I mentioned how Visa is using higher fees for signature debit by steering customers to sign as opposed to pin based debit. It also discusses lawsuits against Visa for price fixing and anti-competitive practices.

Visa: Playing Card Games with Merchants?

The NYT has an interesting article on how Visa seems to be playing a game with merchants in regards to how it can obtain higher fees. Especially for larger retailers, pin based debit fees are lower than signed debit fees. Visa is promoting the use of signed debit (i.e. with chase offering  a "pay your bill" sweepstakes) through banks and other efforts. This pushes up fees for retailers and it's interesting to note that: The Justice Department is investigating if rules imposed by payment networks, including Visa, on merchants regarding “various payment forms” are anticompetitive, a spokeswoman said. Several bills have been introduced in Congress seeking to give merchants more ability to negotiate interchange, which is largely unregulated. Large retailers are steering customers to use only pin based debit by prompting them to use their pin after they swipe their debit cards. Visa seems to have a real hold on the industry as it increases it's domination over rhe debit card market and raises it's fees. It is a real cause for concern for retailers.....