The Economics of Debit Acquiring published by Mercator Advisory Group, Inc. in February, 2010. This report consists of 18 pages long 10 exhibits and the price starts from US $ 2950.
Abstract
Boston, MA - - February 8, 2010 - At the point that the paper-based
payment card market began to become the electronic payments industry,
point-of-sale payment acquirers had not predicted debit's current ascendency.
Even without the final full-year statistics for 2009, we can say with
confidence that growth in debit card transaction numbers and dollar volume has
outpaced credit. The trend is sure to continue as cash and check payments at
the point-of-sale are increasingly replaced by card transactions, as credit
issuers dial down lending to existing accounts, and as credit-conscious
consumers reign in borrowing.
Coupled with debit's growing share of consumer payments has been the rising
cost associated with merchants' acceptance of debit instruments at their
points-of-sale. Consumers' preference for using their PINs has also been
growing faster than signature debit, deepening the impact on acquirers and
merchants.
Mercator Advisory Group's The Economics of Debit Acquiring report
provides an overview of the costs associated with enabling merchants to accept
debit cards for payment. This report evaluates EFT network pricing trends and
provides an in-depth analysis on the implications these trends will have on
acquirers. This report also offers the U.S. market share for the top companies
in payment acquiring, discusses ways in which share can be measured, and
analyzes PIN debit's role in skewing market share depending on which metric is
used.
“Acquirers must eke out some profit margin from the amount they earn on
interchange mark-ups - an already daunting task given the current level of
merchant price sensitivity, but one that is all the more challenging on PIN
debit because of the industry's propensity to rely on a flat fee for PIN debit
processing,” David Fish, Senior Analyst in Mercator Advisory
Group's Debit Advisory Service and author of the report comments. “Since
acquirers' core business is still heavily credit-dependent, shifts in business
models will need to catch up with consumer behavior. Acquirers should
essentially be attacking debit as a potential profit center as the market and
regulatory environments surrounding bankcard payments encounter significant
and potentially strengthening headwinds.”
Highlights of The Economics of Debit Acquiring report include:
- Merchant acquirers have historically priced PIN debit with a flat fee to
the merchant. The old paradigm needs to shift as EFT network pricing continues
to rise and as PIN debit's average ticket also increases.
- Signature debit pricing has held steady, but with Visa controlling about
four-fifths of the market, competition from other networks for issuers likely
means more rising costs.
- Enterprising acquirers looking to exploit the shifting consumer payments
mix should be casting a fresh eye on selling PIN debit acceptance services.
- The July 2010 deadline for PCI PED compliance has created some opportunity
for merchant acquirers - optimizing the opportunity requires a new, more
flexible attitude toward PIN debit.
- Acquirers' market share can vary greatly based on the dollar volume and
number of PIN debit transactions they acquire.
One of 10 exhibits in this report:
This report is 18 pages long and has 10 exhibits.
Companies mentioned in this report include:
American Express; Banc of America Merchant Services; Chase Paymentech; Citi
Merchant Services; Discover; Elavon; Fifth Third; First Data; First National
Merchant Solutions; FIS; Fiserv; Global Payments Inc.; Heartland Payment
Systems; MasterCard; Metavante; RBS WorldPay; SunTrust Merchant Services;
Visa; Wells Fargo Merchant Services.
