Every July Transaction World brings you the latest updates, stats and vital information on the various trade associations that serve the acquiring industry. Each group appeals to either a specific geographical or philosophical viewpoint – many share similar concerns about the future of our industry and adapt their goals and missions accordingly. Transaction World recently asked the board members of each group to share their thoughts on the direction of acquiring in the future.
    Increasing competition, tighter margins, education, compliance, merchant pressures for lower pricing and increased consumer demands/expectations for mobile commerce were among the big issues the associations see affecting acquiring in the coming year. No big surprises here – anyone who has been awake in the industry for the past few years would agree – the real question is – what do ISOs and Agents do to better compete or even stay alive in this maturing, yet increasingly competitive environment?
    According to Alan Forgione of the Northeast Acquirer’s Association, “NEAA sees many challenges for ISOs and Agents in the coming year. We feel that the [bankcard] Associations will be taking a closer look at unregistered ISOs and MSPs.  This will trigger a whole new round of mergers and acquisitions as larger ISOs bring unregistered agents into compliance”. Further, NEAA expects to see a huge shift in the way that ISOs and Agents conduct business throughout the remainder of the year. ISOs and Agents must align themselves with a winning processor. “The practice of offering free terminals is changing the payments processing industry. We expect larger ISOs to follow soon with free programs of their own in a desperate attempt to keep up their market share and margins”.
    Audrey Blackmon of the Southeast Acquirers Association offers a slightly different perspective. According to Blackmon, education is the buzzword of the moment, “We (SEAA) believe the biggest issue facing ISO's and Agents is education, which is exactly why we started the SEAA.  The technology in this industry is changing at light speed, and the government and card associations are going to require compliance with more stringent guidelines in the future.  It is important that the ISO/Agent stays current with these issues, and can educate their merchants on similar issues”.
    Many stated the ever-growing mobility of commerce as the biggest force of change acting upon the industry at present. Consumers expect to pay with plastic almost everywhere they enter a transaction, whether it is in the mall or someone coming to their home to clean the upholstery.
    Holli Targen of the newly formed W.net group (Women Networking in Electronic Transactions), Kevin Brosnahan, Director of Communications for the ETA (Electronic Transactions Association) and Mark Dunn of the MWAA (MidWest Acquirer’s Association) agree that networking, advocacy and partnership as key ways that savvy ISOs and Acquirers can survive and thrive into the future.  Brosnahan states that the ETA realizes that, “It is from greater participation and access to a broader range of contacts and information that ETA members and the industry most greatly benefit. [From the ETA’s perspective,] these mutually-beneficial relationships will take the form of cooperative educational and networking events and programs to expand membership and access to ETA products and services”.
    Says Dunn when asked how his group expects to support its constituency, “The MWAA is focused on supporting the needs of the merchant level salesperson for information, tips and techniques, industry contacts, better relationships and ways to earn a better living selling merchant bankcard”. Targen explains that W.net will further its charter goal of promoting women in acquiring by, “establishing a vibrant community of women at networking events and organizing programs that will attract women in the business, educate participants on the unique challenges inherent to women working in a male-dominated industry and that will expose participants to successful women in the industry and those leaders’ experiences”.   
    Not to forget our ATM ISO brethren, TW sought feedback from the ATMIA, (ATM Industry Association), on their thoughts regarding industry challenges. Lana Harmelink, ATMIA International Director of Operations, cites unique and yet remarkably similar issues facing today’s ATM ISOs, “dealing with the compliance deadlines that have either already been announced or are coming down in the next few months, such as:  Visa approved EPP; Triple DES upgrades; and potential ADA standards modifications; Further acceptance of PIN debit and cash back at the “point of sale”; Overreaching government (local, state, federal) regulations. As far as marketplace changes that will alter the way ISOs and Agents conduct business Harmerlink expects that ATM ISOs will have to negotiate budget situations in jurisdictions across the country that are causing state, city and local governments to view ATMs as a new revenue source.  “In the past we have seen consistent efforts across the country from governmental entities attempting to ban or restrict surcharging and since these [efforts] have been unsuccessful, we are now seeing [governments looking to] the industry for fees and assessments.  These, combined with lowered network interchange payments or increased network fees are eroding profit margins for ATM ISOs”.  As with POS ISOs, market saturation, value-added pressures, consolidations and interchange were among top concerns for the ATMIA.