NEW FRONTIERS IN MERCHANT SERVICES

NEW FRONTIERS IN MERCHANT SERVICES

Acquirers and pursuit of added value

The merchant services market is subject to two fundamental forces that are dictating its shape. On the positive side the outlook for electronic payments is bright with growth in payment cards and billed volume on an upward trajectory. On a more challenging note, margins from the core acquiring revenue stream that is merchant service discounts are diminishing on the credit card side (and in the case of debit and low value payments may be loss-making). In general, however, growth in credit card billed volume is comfortably compensating for this with credit card merchant service charge (MSC) income more than doubling to just under $6 trillion in the ten years to 2012.