Insight Report: Global Trends in Merchant Acquiring

With a huge influx of new payment solutions into the industry, both opportunities and challenges for merchant acquirers have reached a new level. There is a significant shift from conventional services, such as accepting mag-stripe debit/credit cards, mail and telephone orders, to new acceptance channels as a result of e-commerce/m-commerce, contactless technology, mobile point of sale (mPOS) and omni-retailing.

Digital-only channels and alternative instruments such as mobile payments have created opportunities for new market participants; such as payment gateway providers and payment service providers (PSPs). Payment gateways are software applications that act as a virtual POS. Similar to conventional POS terminals; they allow secure exchange of card and bank account information with the processor.

PSPs usually assume a wider role, offering multiple payment options to merchants through a single platform. For instance, in addition to credit and debit cards, a PSP can offer options such as cash or card-on-delivery payments, e-wallets, prepaid cards, vouchers, and check-processing services. Since these are independent intermediaries, they are also able to integrate multiple domestic and international payment options in a single platform. PSPs can also offer value-added services such as risk management, fraud protection, data analytics, integration into shopping cart infrastructure, and warehousing facilities to merchants. Merchants can sign up to a PSP which will offer them one or a multitude of acquirers, or they will pick an acquirer and the PSP will integrate them. However, some acquirers also offer these services directly. For instance, Worldline offers all the support for hundreds of payment instruments in an e-commerce environment, which it offers in bricks-and mortar-stores and for all sizes of merchant account. Moreover, some e-commerce leaders such as Amazon can also carry out acquiring and processing in-house.

Many PSPs focus on multi-country service offerings because of the complexity involved in linking two different acquirers in each country. This allows PSPs to carve out a niche business proposition: several PSPs such as PayPal, Sage and Stripe perform the role of merchant aggregators as well. This further complicates the classification of different market participants in e-commerce acquiring.

Scope

  • Analysis of the top-line card-acquiring market size at both a global and regional level
  • Rankings of the top-10 merchant acquirers globally
  • A snapshot of the industry structure involving card transactions acquired at point of sale (POS) terminals
  • Insight on the key emerging trends influencing the market dynamics of the merchant acquiring industry
  • Analysis of growth opportunities in the global merchant acquiring industry
  • Detail on the key strategic deals and investments between January 2013 and May 2015
  • Insight on the role of merchant aggregators in targeting untapped markets

Key Highlights

In what ways are the lines between business areas controlled by different market participants becoming more blurred?

What have the challenges imposed by regulation and demand for the latest technology prompted banks to do with their acquiring businesses? Which key benefits have merchants experienced in conjunction with this?

Why has the industry moved towards price competition? In what ways has the market become troublesome for acquirers?

How has card acquiring become more accessible to micro merchants and small businesses? What are the key benefits that technology is providing?

Which key development in the industry is delivering advantages in service offerings?

Reasons to buy

  • Understand the changing dynamics of merchant acquiring and gain insights into key technology.
  • Understand competitive threats from new market entrants and emerging opportunities.
  • Gain insights into investment trends.
  • Understand how organizations will be affected by the changing industry dynamics.

Companies mentioned

CUP Merchant Services

First Data

Bank of America Merchant Services

Vantiv

Chase Paymentech Solutions

WorldPay

Global Payments

Commercial and Industrial Bank of China

Elavon

Citi ...

CUP Merchant Services

First Data

Bank of America Merchant Services

Vantiv

Chase Paymentech Solutions

WorldPay

Global Payments

Commercial and Industrial Bank of China

Elavon

Citi Merchant Services

ING

BBVA

Credit Agricole

iZettle

Square

American Express

Discover

Royal Bank of Scotland

Optimal Payments Plc

PayCommerce, Inc.

Heartland Payment Systems, Inc.

Arion banki hf

Soft Space

CR7 Services Limited

MerchantWarehouse.com, LLC

Advent, Bain Capital and ATP

Total System Services, Inc.

EVO Payments International, LLC

Columbus Data Services, LLC

Table of Contents

1 Executive Summary

2 Merchant Acquiring – Defining the Industry

2.1 Industry Structure and Key Stakeholders

2.1.1 Merchant acquiring business models

2.1.2 Top 10 merchant ...

1 Executive Summary

2 Merchant Acquiring – Defining the Industry

2.1 Industry Structure and Key Stakeholders

2.1.1 Merchant acquiring business models

2.1.2 Top 10 merchant acquirers across the world

2.2 The Global Merchant Acquiring Market

2.3 Merchant Acquiring Market – Regional Breakdown

2.3.1 Asia-Pacific

2.3.2 Europe

2.3.3 Latin America

2.3.4 North America

2.3.5 Middle East and Africa

3 Gauging the Industry’s Drift

4 Where are the Opportunities?

4.1 Explore New Markets

4.2 Shift from “One Size Fits All” to Diversified and Omni-Channel Acquiring

4.3 Offer Support for Contactless Payments

4.4 Analytics to Lower Fraud Losses and Improve Efficiency

4.5 Improving Merchant Retention and Relations through Value- Added Services

4.6 Cloud Technology and Open APIs for Cost Optimization and Flexibility

5 MNO Driven Mobile Money – Is it a Brewing Threat?

6 Merchant Aggregators – Key to Unlocking Small and Micro Merchants

6.1 What Makes Aggregators Popular Among Small and Micro Merchants?

6.2 Key Considerations in Partnership with Aggregators

7 Key Findings

8 Appendix

8.1 Methodology

8.2 Contact GlobalData

8.3 About GlobalData

8.4 GlobalData’s Services

8.5 Disclaimer

List of Tables

Table 1: Key Acquiring Models

Table 2: Top 10 Card Acquirers in the World, 2014

Table 3: Key Acquisitions in the Merchant Acquiring and Processing ...

Table 1: Key Acquiring Models

Table 2: Top 10 Card Acquirers in the World, 2014

Table 3: Key Acquisitions in the Merchant Acquiring and Processing Industry (January 2013–May 2015)

Table 4: The Way Around Key Challenges

Table 5: Key Success Factors in Omni-channel Acquiring

Table 6: Contactless Payments in the UK

Table 7: Value Added Offering by Key Acquirers

Table 8: Pros and Cons of MNO-led Mobile Money

Table 9: Merchant Aggregators and Cost for Merchants

List of Figures

Figure 1: Merchant Acquiring Ecosystem in Bricks-and-Mortar Stores

Figure 2: Value and Volume of Acquired Transactions, 2010–2014

Figure 3: Value and Volume of Acquired Transactions ...

Figure 1: Merchant Acquiring Ecosystem in Bricks-and-Mortar Stores

Figure 2: Value and Volume of Acquired Transactions, 2010–2014

Figure 3: Value and Volume of Acquired Transactions in Asia-Pacific, 2010–2014

Figure 4: Value and Volume of Acquired Transactions in Europe, 2010–2014

Figure 5: Value and Volume of Acquired Transactions in Latin America, 2010–2014

Figure 6: Value and Volume of Acquired Transactions in North America, 2010–2014

Figure 7: Value and Volume of Acquired Transactions in the Middle East and Africa, 2010–2014

Figure 8: MSC Revenue Share of a Typical US$100 Credit Card Transaction in the US

Figure 9: CNP Fraud in Selected Countries (US$ Million), 2010–2014

Figure 10: The State of the Merchant Acquiring Industry

Figure 11: Market Shares of the Top Five Merchant Acquirers in Selected Markets, 2014

Figure 12: Drivers of M&A Activity in Merchant Acquiring

Figure 13: Card Transaction Value in Emerging Markets (US$ Billion), 2010–2014

Figure 14: Revenue Growth Expectation from Value-Added Services in Financial Services by 2016

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