At the end of their Q&A session on their webcast announcement, Visa does suggest that they will be doing away with the acquiring division of CyberSource / Authorize.net and turning it primarily into a referral based business.  This part is good news for Authorize.net resellers such as ourselves.  They have been competing with their resellers for several years by providing merchant accounts themselves through a partnership.

For years, there have been reps or companies that make the claim that they are direct with Visa.  This has never been true for what I explained above.  However,  now that Visa is acquiring CyberSource, I would not be surprised if anyone working for CyberSource now tries to makes use of that line even though it is still not true.  Visa may now legally own CyberSource, but that does not change any of the relationships, costs or how everyone is interconnected with one another.

Verifone’s PAYware starts selling around the country this month through the Apple iPhone store.  According to Verifone, the product uses its Connect payment gateway to process payments.  Most processors are compatible with their gateway product, so merchants should be able to pick any merchant provider they choose.  It will definitely be interesting to see how mobile processing progresses over the next few years.  Will the wireless terminals we have been selling for years become obsolete and be replaced with our cellphones that are hooked up to a swiping device (including all cell phones and not just iPhones)?  If anything, new products like this is certainly making the service more appealing to small businesses that will not process very many credit cards.

My question is what will the processing industry do?  Will a lot of big ISOs start charging the merchants a new fee to help cover their cost to handle this new reporting requirement?  Only time will tell, but I hope not.  I do not know the logistic of it and how easy it will be.  I am sure however if there is significant cost, many processors will create a new fee and past on the expense. So if you have been trying to get away by not reporting all of your gross sales, that day is coming to an end.

I’m surprised I haven’t found Merchant Maverick before as I consider myself very up to speed with our industry and everything that goes on. I managed to look through the web site and believe they have done a great job.  It is  a great resource for anyone wanting to find a merchant account provider.  It is jam packed full of reviews on dozens of companies.  It is also great that we received such a high rating.  There are a lot of great processing companies out there and Gotmerchant.com is truly one of them that does everything possible to bend over backwards for its merchants.  No company is perfect, but we sure try our best to be one.  I’m thrilled that an outsider such as Merchant Maverick has been able to see this. We are not a huge conglomerate like FirstData or Chase Paymentech, but that allows us to focus on our merchants and their individual needs.

Image thanks to http://www.flickr.com/photos/65013758@N00/26603770/

NY Times released a very interesting article last week about pin-based debit transactions.  I have been in this business for years and even I learned a few things about the history of pin-debit.  Pin-debit is starting to become very big business, a big percentage of all electronic transactions.  With the whole economy down and consumers trying to avoid creating themselves more debt, more consumers are starting to use debit cards more frequently than ever before.  When debit cards first started gaining traction in the 1980’s, the small debit networks didn’t charge any fees to process the cards using a pin number.    Sometimes, merchants even received a small kick back as the banks saved money by not having to process a check.  That all changed when Visa entered into the market with their Visa debit card that could be signed for and still attached to their checking account.  This then made the banks money and become appealing to all of them.

As you can see in the chart, the fees for pin debit has been steadily climbing.  You will notice the huge spike in 2007 and that is because Visa’s network (Interlink) removed the cap that debit networks always had.  The cap was a set amount that all transaction costs would not exceed, such as 55 cents, regardless of transaction amount.  By looking at the price in the late 90’s, you can see that they do not have very much cost to process pin-debit transactions. The big reason is they are tied to a checking account, which only gets authorized based on available funds.  Whereas credit cards are attached to lines of credit and consumers can default on that.  Debit cards however isn’t debt, but the same thing as writing a check and ut 100% secure for the bank.  If you do not take advantage of pin-debit transactions, why not call your credit card processing to set that up?  If they cannot handle this for you, then give us a call.