I came across Visa’s announcement that they will be acquiring CyberSource for $2 billion. CyberSource owns Authorize.net, a major Internet payment gateway. CyberSource claims to processes about 1/3 of all ecommerce transactions in the US, serving almost 300,000 merchants. What does this mean for the industry? Honestly, I am flabbergasted and have all sorts of thoughts and feelings about this. Because of how complex this business is and how everyone is interconnected with one another, this action can result in so many different negative scenarios. Visa/MC have always strictly been an association. They have never provided any services and their member banks are the ones that do everything. This includes issuing credit cards to consumers as well as providing merchant accounts to merchants. For anyone that knows how this business works, this is a little bit of scary news. You could say that Visa will now be a conflict of Interest. I can however understand why they are making a move such as this. They are a publicly traded company and the core motivation behind any publicly traded company is profit. Only time will tell on what they do with it and how it affects the industry.
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.