In the dog-eat-dog world of the credit-card processing industry, retail merchants get barraged daily by calls and in-person visits from processing firms – brokers between merchants and banks that largely make money via transaction fees – luring them to switch with promises of lower rates.
Given the volatility of the business, processing firms often cut fees and offer freebies, like credit-card swipe machines, to maintain merchant accounts. As an alternative strategy, a new processing firm in NY is focusing on technology-based services to break the cycle of transient clients and leeching competitors.
SwipeFast, a Bay Ridge, Brooklyn-based processing firm that offers swipe-card and mobile-payment services, is launching an electronic reward card next month that will replace its clients’ existing punch-or stamp-based frequent buyer cards and will allow those without a customer loyalty program to launch one. Furthermore, SwipeFast’s e-reward card, which resembles a credit card and is compatible with swipe machines, will be managed through an online account that will allow its merchants’ customers to manage purchase points and merchants to gather and analyze customer information.
The e-reward card was created via a partnership with SparkBase, a tech firm that specializes in white-label loyalty programs. A handful of SwipeFast’s 40+ clients, of which about 75 percent are based in NY and (including a day care center in Long Island and a wine store in Brooklyn), have signed on to participate for the tentative cost of $10 per month, said SwipeFast president Joe Nisanov.
“A large part of this business now is focused on e-commerce in order to build up and obtain the processing business,” said Nisanov, 35, who, along with co-founder Michael Venzke, 31, launched SwipeFast in January, employing a handful of sales agents. “That’s where the sales are going to come in, having clients happy with the rewards program and then gaining their credit-card business.”
Despite the crowded industry Nisanov and Venzke, who worked for a decade on the sales and development side of the processing business, saw an opportunity to create a niche by offering tech-driven simplicity.
“It was really looking at the industry and our competition and realizing there is a place for a company to do things different,” said Nisanov. “This is certainly an industry that is in the ‘80s and early ‘90s as far as technology.”
To capitalize, SwipeFast offers clients four tiers of services at fixed rates (ranging from $15 to $35 a month plus set fees) while putting applications and statements online via an easy-to-navigate user interface. Its tech-savvy approach includes e-commerce services such as setting up online shopping carts and features social media promotion with offers for free iPads and plug-ins for businesses that use QuickBooks.
“Focusing on tech gives an advantage,” said Nisanov, who, along with Venzke, launched the company with $10,000 of their own savings. “It’s inevitable that the industry is going that way with near-field communications coming out. We want to try and stay ahead of the game and capitalize.”
While SwipeFast is still in the red financially, it’s close to reaching profitability and is on pace break even by the end of the year, said Nisanov.
SwipeFast’s tech services and e-reward card come at a pivotal time in the industry. On Oct. 1, the Durban Amendment went into effect, adding to the Dodd-Frank financial reform legislation drawn up by Congress by dramatically lowering debit-card processing rates on swipe transactions. The Durban Amendment is expected to reshuffle merchant accounts and reshape the industry, according to processing firms and industry consultants.
2011年10月27日 星期四
2011年10月26日 星期三
Planet Payment reveals strong first half performance
Planet Payment reveals strong first half performance; shares resume trading on AIM
It explained last month that following discussions with its advisor Deloitte, the group’s interim results had been delayed as it made changes to the way it presents revenues in its accounts ahead of the groups IPO into US capital markets.
Today the group released the eagerly anticipated results for the six months ended June 30, which showed a 47 per cent uplift in net revenue to US$19.9 million.
Following the announcement, Planet Payment’s shares have resumed trading on AIM after the temporary suspension.
Planet Payment said that its interim net income had swung into positive ground, reaching US$1 million from a US$2.3 million loss in the first half of last year. Adjusted earnings (EBITDA) came in at US$2.6 million, compared to a US$400,000 loss a year ago.
The company now reports revenues net of the gross foreign currency mark-up, which is shared between the company, acquirers and their merchants.
It said that ‘consolidated gross billings’ – a financial metric that includes gross foreign currency mark-up and revenues earned and reported on payment processing services – increased by 70 per cent compared to the comparative period of last year, to US$47 million.
Meanwhile, the ‘gross foreign currency mark-up' increased 86 per cent to US$40.2 million.
Put in more straight forward terms, Planet Payment’s progress can be seen through the continued roll-out of its payment processing services which are being used by more and more merchants in an increasing number of territories.
The number of active merchants using Planet Payment’s multi-currency payment processing service increased by 66 per cent to 14,345, and just over US$1 billion was settled through the platform.
This increase in the take up of its product is the main driver behind the group’s strong revenue growth.
“Planet Payment's customers have continued to roll out our multi-currency processing solutions as reflected by a 66 per cent increase in active multi-currency merchant locations,” the company said in a stock exchange statement.
“During the first half of 2011 the total number of active merchant locations continued to grow, increasing by approximately 100 per cent during the period.
“During the first half of 2011, the company continued to expand its acquiring customer base in both existing and new markets, in particular announcing agreements with Global Payments to provide multi-currency services in the United States and Canada, complementing the existing agreements in the Asia Pacific region.”
Then in March, Planet Payment signed a deal with Vantiv – formerly known as Fifth Third Processing Solutions – to expand its offering through the future roll out of the ‘Pay in Your Currency’ service on ATMs throughout the United States.
Later, in May, Planet Payment launched the MICROS Payment Gateway, which it operates under a worldwide license from MICROS Systems, to support payment services for merchants in the hospitality and retail industries.
Additionally the company was told that two claims under its patent applications have been found to be ‘patentable’ in Singapore and Australia, and it expects patents in those countries to be granted shortly – Planet Payment already has patents in the United States and in other countries.
On a corporate from the firm has also been strengthened. In April investor holding US$9 million in convertible notes switched the debt into equity, taking just over 4 million new shares in the company.
Meanwhile the preparations continue for the group’s full listing in the United States, in which US$75 million worth of stock will be sold to new investors – from a mixture of new and existing share capital.
It explained last month that following discussions with its advisor Deloitte, the group’s interim results had been delayed as it made changes to the way it presents revenues in its accounts ahead of the groups IPO into US capital markets.
Today the group released the eagerly anticipated results for the six months ended June 30, which showed a 47 per cent uplift in net revenue to US$19.9 million.
Following the announcement, Planet Payment’s shares have resumed trading on AIM after the temporary suspension.
Planet Payment said that its interim net income had swung into positive ground, reaching US$1 million from a US$2.3 million loss in the first half of last year. Adjusted earnings (EBITDA) came in at US$2.6 million, compared to a US$400,000 loss a year ago.
The company now reports revenues net of the gross foreign currency mark-up, which is shared between the company, acquirers and their merchants.
It said that ‘consolidated gross billings’ – a financial metric that includes gross foreign currency mark-up and revenues earned and reported on payment processing services – increased by 70 per cent compared to the comparative period of last year, to US$47 million.
Meanwhile, the ‘gross foreign currency mark-up' increased 86 per cent to US$40.2 million.
Put in more straight forward terms, Planet Payment’s progress can be seen through the continued roll-out of its payment processing services which are being used by more and more merchants in an increasing number of territories.
The number of active merchants using Planet Payment’s multi-currency payment processing service increased by 66 per cent to 14,345, and just over US$1 billion was settled through the platform.
This increase in the take up of its product is the main driver behind the group’s strong revenue growth.
“Planet Payment's customers have continued to roll out our multi-currency processing solutions as reflected by a 66 per cent increase in active multi-currency merchant locations,” the company said in a stock exchange statement.
“During the first half of 2011 the total number of active merchant locations continued to grow, increasing by approximately 100 per cent during the period.
“During the first half of 2011, the company continued to expand its acquiring customer base in both existing and new markets, in particular announcing agreements with Global Payments to provide multi-currency services in the United States and Canada, complementing the existing agreements in the Asia Pacific region.”
Then in March, Planet Payment signed a deal with Vantiv – formerly known as Fifth Third Processing Solutions – to expand its offering through the future roll out of the ‘Pay in Your Currency’ service on ATMs throughout the United States.
Later, in May, Planet Payment launched the MICROS Payment Gateway, which it operates under a worldwide license from MICROS Systems, to support payment services for merchants in the hospitality and retail industries.
Additionally the company was told that two claims under its patent applications have been found to be ‘patentable’ in Singapore and Australia, and it expects patents in those countries to be granted shortly – Planet Payment already has patents in the United States and in other countries.
On a corporate from the firm has also been strengthened. In April investor holding US$9 million in convertible notes switched the debt into equity, taking just over 4 million new shares in the company.
Meanwhile the preparations continue for the group’s full listing in the United States, in which US$75 million worth of stock will be sold to new investors – from a mixture of new and existing share capital.
2011年10月12日 星期三
So Where Are Those Post-Durbin Price Reductions for Consumers?
The debit card has become one of the most convenient forms of payment , delivering widespread benefits for consumers and merchants alike. Debit cards are now universally accepted; no longer must we carry large amounts of cash to shop; check-out lines move more quickly and purchases are processed electronically with pinpoint accuracy.
Banks earn debit card revenues from transaction processing fees paid by merchants. Most consumers pay scant attention to this bank/merchant relationship, because it has had no effect on their debit card usage…until now. So, what happened?
The merchant community decided that the processing fees were too high and lobbied Congress to pass legislation to set pricing. In return, merchants promised to pass on their savings to consumers in the form of lower prices for their products. (More on that promise later…).
The merchants were successful in persuading Congress to legislate pricing for debit transactions. As predicted, debit card revenues are declining rapidly. Since the infrastructure costs for product support have remained intact, banks have been forced to re-evaluate their consumer offerings and pricing structures. When faced with similar burdensome regulations, any prudent business would do likewise.
As a consequence, debit card reward programs have been revised or eliminated, and new fees are being implemented for debit card usage. Free checking was a viable product when debit card revenues partially subsidized the cost of offering the freeaccount . Now, as those revenues evaporate and operational costs remain constant, free checking may no longer make economic sense for financial institutions.
Interestingly, the merchant community's promise of lower prices has conveniently been forgotten. Recall that retailers told Congress that if these "swipe fees" were reduced, they would pass the savings along to consumers. Yet, there's no evidence that the merchant community is following through on its promise. Furthermore, there's no indication that lawmakers will hold them accountable to their original commitment.
What is abundantly clear is that consumers are furious with their financial institutions and merchants are at their financial institutions and merchants are enjoying significant reductions in processing costs. While banks are losing billions in revenue, merchants are quietly pocketing a financial windfall. Adding to the misinformation, the president and some members of Congress have recently made pompous and emotional comments about the new fees; unfortunately, these statements have rarely, if ever, been fact based.
Much has been written about the banking industry's mistakes during the financial crisis. The banks have acknowledged that major internal changes are necessary and substantial resources have been dedicated to address the deficiencies. There's still a lot of work to do, but the industry is making steady progress.
The outcry about new fees is a separate and distinct issue from the banking industry's errors uncovered during the recession. Meddling with the free market economy through government price setting is an abuse of power that has established a dangerous precedent. In this instance, government interference in private sector commerce has significantly devalued one of the most popular and effective consumer financial products ever created.
Banks earn debit card revenues from transaction processing fees paid by merchants. Most consumers pay scant attention to this bank/merchant relationship, because it has had no effect on their debit card usage…until now. So, what happened?
The merchant community decided that the processing fees were too high and lobbied Congress to pass legislation to set pricing. In return, merchants promised to pass on their savings to consumers in the form of lower prices for their products. (More on that promise later…).
The merchants were successful in persuading Congress to legislate pricing for debit transactions. As predicted, debit card revenues are declining rapidly. Since the infrastructure costs for product support have remained intact, banks have been forced to re-evaluate their consumer offerings and pricing structures. When faced with similar burdensome regulations, any prudent business would do likewise.
As a consequence, debit card reward programs have been revised or eliminated, and new fees are being implemented for debit card usage. Free checking was a viable product when debit card revenues partially subsidized the cost of offering the free
Interestingly, the merchant community's promise of lower prices has conveniently been forgotten. Recall that retailers told Congress that if these "swipe fees" were reduced, they would pass the savings along to consumers. Yet, there's no evidence that the merchant community is following through on its promise. Furthermore, there's no indication that lawmakers will hold them accountable to their original commitment.
What is abundantly clear is that consumers are furious with their financial institutions and merchants are at their financial institutions and merchants are enjoying significant reductions in processing costs. While banks are losing billions in revenue, merchants are quietly pocketing a financial windfall. Adding to the misinformation, the president and some members of Congress have recently made pompous and emotional comments about the new fees; unfortunately, these statements have rarely, if ever, been fact based.
Much has been written about the banking industry's mistakes during the financial crisis. The banks have acknowledged that major internal changes are necessary and substantial resources have been dedicated to address the deficiencies. There's still a lot of work to do, but the industry is making steady progress.
The outcry about new fees is a separate and distinct issue from the banking industry's errors uncovered during the recession. Meddling with the free market economy through government price setting is an abuse of power that has established a dangerous precedent. In this instance, government interference in private sector commerce has significantly devalued one of the most popular and effective consumer financial products ever created.
2011年6月26日 星期日
Debit cards poised to get much more expensive
Debit cards, a gleam in bankers' eyes 30 years ago, have become the preferred method for people to tap their bank accounts, a free and easy alternative to paper checks, live tellers or cash machines.
U.S. shoppers used them 37 billion times last year, making them more popular than credit cards (19 billion transactions) and checks (18 billion), according to the payments newsletter Nilson Report. Another estimate puts the figure at 45 billion debits.
But big changes are afoot that could make it much more expensive for consumers to use the cards. And with concern rising over data breaches, some privacy advocates are recommending that shoppers return to cash or use credit cards, which provide better protection against fraud losses.
For years, banks subsidized most debit card holders by levying heavy fees on retailers and overdrawn consumers. Merchants paid a processing fee averaging 44 cents every time a shopper swiped a card. And careless cardholders at major banks typically got dinged $35 every time the bank covered an overdraft.
Last year the nation's banks collected more than $50 billion from merchant fees and overdrafts, including checking and ATM balance-busters as well as debit card transactions.
That's likely to decline, however, thanks to new rules Congress mandated after the financial crisis. Starting next month, merchants will pay just 12 cents for debit processing, unless bank lobbyists persuade the Federal Reserve to tack on a surcharge for fraud prevention. Even then, the fee would probably not exceed 18 or 20 cents.
In addition, new rules that took effect last year prohibit banks from automatically charging consumers for debit card and ATM overdraft protection on everyday transactions; instead, cardholders now must opt in.
The bottom line is that banks stand to lose more than $10 billion a year in merchant fees and more than $6 billion in overdraft fees. They'll be looking to make it up somewhere — and it's likely to be from the mainstream debit card users, not just the sloppy ones.
Already, JPMorgan Chase & Co., Wells Fargo & Co. and many other banks are reducing or phasing out rewards programs that gave users cash back for using debit cards. Chase has been testing a monthly $3 fee for debit cards in some states, and Bank of America Corp. and Citigroup Inc. have added new fees to some checking accounts.
At least one credit union has capped debit purchases at $300 a day, and most of the nation's 7,534 banks and thrifts are testing or plan to test consumer reaction to new fees or limits on debit cards or the checking accounts to which they're linked, said Richard Hunt, president of the Consumer Bankers Assn.
"They're all testing the market and seeking the right price," Hunt said. "It's a mathematical certainty the consumer will bear the cost."
Industry consultant Michael Moebs predicted that the typical cost to consumers might approximate a Sam's Club or Costco membership, about $36 a year on average.
Consumer advocates are steamed. Electronic debits are much less expensive to process than checks or cash; banks have saved billions in operating costs, said Ed Mierzwinski, consumer program director at the U.S. Public Interest Research Group. But the industry has largely pocketed those savings rather than pass them along to customers, he said, and now they're looking to charge users for the convenience.
"We were trained to use cards, and now they're telling us it's not enough, wanting to charge us for the privilege," Mierzwinski said. "It's diabolical."
It's not the first time activists have complained about banks' debit card practices. In the past, financial institutions made piles of money by reordering customer debits so the largest transactions cleared first.
For example, if a customer had $100 in a checking account and made three $10 debit purchases early in the day and a final one for $200, the bank would process the $200 transaction first, then the smaller ones. The result: $140 in overdraft fees as opposed to $35 if the transactions had been processed in order.
Facing numerous lawsuits, most banks, including Wells, Chase and BofA, have abandoned the high-to-low sorting of debits (although those three still process checks that way).
Citigroup., whose Citibank never routinely offered overdraft protection on debits, has said that next month it will begin sorting checks starting with the smallest amounts first.
Seeking to get ahead of the new rules, Bank of America stopped offering its customers debit overdraft protection last year.
U.S. shoppers used them 37 billion times last year, making them more popular than credit cards (19 billion transactions) and checks (18 billion), according to the payments newsletter Nilson Report. Another estimate puts the figure at 45 billion debits.
But big changes are afoot that could make it much more expensive for consumers to use the cards. And with concern rising over data breaches, some privacy advocates are recommending that shoppers return to cash or use credit cards, which provide better protection against fraud losses.
For years, banks subsidized most debit card holders by levying heavy fees on retailers and overdrawn consumers. Merchants paid a processing fee averaging 44 cents every time a shopper swiped a card. And careless cardholders at major banks typically got dinged $35 every time the bank covered an overdraft.
Last year the nation's banks collected more than $50 billion from merchant fees and overdrafts, including checking and ATM balance-busters as well as debit card transactions.
That's likely to decline, however, thanks to new rules Congress mandated after the financial crisis. Starting next month, merchants will pay just 12 cents for debit processing, unless bank lobbyists persuade the Federal Reserve to tack on a surcharge for fraud prevention. Even then, the fee would probably not exceed 18 or 20 cents.
In addition, new rules that took effect last year prohibit banks from automatically charging consumers for debit card and ATM overdraft protection on everyday transactions; instead, cardholders now must opt in.
The bottom line is that banks stand to lose more than $10 billion a year in merchant fees and more than $6 billion in overdraft fees. They'll be looking to make it up somewhere — and it's likely to be from the mainstream debit card users, not just the sloppy ones.
Already, JPMorgan Chase & Co., Wells Fargo & Co. and many other banks are reducing or phasing out rewards programs that gave users cash back for using debit cards. Chase has been testing a monthly $3 fee for debit cards in some states, and Bank of America Corp. and Citigroup Inc. have added new fees to some checking accounts.
At least one credit union has capped debit purchases at $300 a day, and most of the nation's 7,534 banks and thrifts are testing or plan to test consumer reaction to new fees or limits on debit cards or the checking accounts to which they're linked, said Richard Hunt, president of the Consumer Bankers Assn.
"They're all testing the market and seeking the right price," Hunt said. "It's a mathematical certainty the consumer will bear the cost."
Industry consultant Michael Moebs predicted that the typical cost to consumers might approximate a Sam's Club or Costco membership, about $36 a year on average.
Consumer advocates are steamed. Electronic debits are much less expensive to process than checks or cash; banks have saved billions in operating costs, said Ed Mierzwinski, consumer program director at the U.S. Public Interest Research Group. But the industry has largely pocketed those savings rather than pass them along to customers, he said, and now they're looking to charge users for the convenience.
"We were trained to use cards, and now they're telling us it's not enough, wanting to charge us for the privilege," Mierzwinski said. "It's diabolical."
It's not the first time activists have complained about banks' debit card practices. In the past, financial institutions made piles of money by reordering customer debits so the largest transactions cleared first.
For example, if a customer had $100 in a checking account and made three $10 debit purchases early in the day and a final one for $200, the bank would process the $200 transaction first, then the smaller ones. The result: $140 in overdraft fees as opposed to $35 if the transactions had been processed in order.
Facing numerous lawsuits, most banks, including Wells, Chase and BofA, have abandoned the high-to-low sorting of debits (although those three still process checks that way).
Citigroup., whose Citibank never routinely offered overdraft protection on debits, has said that next month it will begin sorting checks starting with the smallest amounts first.
Seeking to get ahead of the new rules, Bank of America stopped offering its customers debit overdraft protection last year.
2011年6月19日 星期日
HSS Hire chief Chris Davies powers up to lift a bigger load
Chris Davies knew he was on the right track when he got a call from Radio 4. They wanted him to star in a new television show. This was the big time.
“It was this programme called The Undercover Boss and the guy went on about how I would wander around the company, spotting problems and not being recognised. I had to stop him after about five minutes and point out a flaw – in the first depot I went into, the first person I saw would have said 'hello Chris, how you doing?’ Thinking about the concept of the programme, it’s pretty telling of those organisations that take part. I would be mortified if people didn’t recognise me. ”
He might not have got to enjoy his 60 seconds of fame but Davies is upbeat as he sits in the boardroom of HSS Hire’s headquarters a few miles from Heathrow. The rain is lashing down outside in the resolutely uninspiring business park, pinging off HSS’s forklift trucks and heavy loaders, but Davies seems happy someone’s come to visit his “big small company”.
With the economic recovery as dreary as the weather, HSS is in surprisingly good health. The privately owned hire company, which specialises in providing machinery and tools for commercial customers, posted a 12pc increase in like-for-like sales in the three months to April and unlike some competitors is firmly in growth mode.
Such has been the turnaround – five consecutive quarters of like-for-like sales growth – that speculation about a potential sale or flotation is growing steadily.
“It was this programme called The Undercover Boss and the guy went on about how I would wander around the company, spotting problems and not being recognised. I had to stop him after about five minutes and point out a flaw – in the first depot I went into, the first person I saw would have said 'hello Chris, how you doing?’ Thinking about the concept of the programme, it’s pretty telling of those organisations that take part. I would be mortified if people didn’t recognise me. ”
He might not have got to enjoy his 60 seconds of fame but Davies is upbeat as he sits in the boardroom of HSS Hire’s headquarters a few miles from Heathrow. The rain is lashing down outside in the resolutely uninspiring business park, pinging off HSS’s forklift trucks and heavy loaders, but Davies seems happy someone’s come to visit his “big small company”.
With the economic recovery as dreary as the weather, HSS is in surprisingly good health. The privately owned hire company, which specialises in providing machinery and tools for commercial customers, posted a 12pc increase in like-for-like sales in the three months to April and unlike some competitors is firmly in growth mode.
Such has been the turnaround – five consecutive quarters of like-for-like sales growth – that speculation about a potential sale or flotation is growing steadily.
2011年4月26日 星期二
Instabill to Attend Electronic Transactions Association 2011 Meeting & Expo
A commuter scans a debit card at the gas station. A day trader makes or loses a fortune in the blink of an eye. A collector buys a priceless work of art at an online auction. Billions of electronic transactions take place every day, in every corner of the world. The payment professionals that make this financial wizardry possible will convene in San Diego, California from May 10-12, for the annual meeting and expo of the ETA (Electronic Transactions Association). Industry leader Instabill, Inc. will be exhibiting, offering solutions to sales agents who work with high risk, offshore, or international merchants.
“Sales agents should not be losing money because they can’t get their high risk merchants approved,” says Instabill founder and CEO Jason Field. Instabill provides an online payment gateway and merchant account services to businesses that may be difficult to serve, due to either a high risk profile or unique needs that can’t be met by domestic banks. “If you’ve ever had a customer that’s made you think, ‘I just can’t help this merchant,’” says Mr. Field, “Instabill may well facilitate the best payment solution.” Instabill works with merchants to find creative solutions to problems ranging from multi-currency transactions to offshore bank processing.
This is the 3rd year that Instabill will be joining the ETA expo. Attendees can find out more by visiting Instabill’s multimedia presentation at Booth 109 in the exhibition hall at the event.
“Sales agents should not be losing money because they can’t get their high risk merchants approved,” says Instabill founder and CEO Jason Field. Instabill provides an online payment gateway and merchant account services to businesses that may be difficult to serve, due to either a high risk profile or unique needs that can’t be met by domestic banks. “If you’ve ever had a customer that’s made you think, ‘I just can’t help this merchant,’” says Mr. Field, “Instabill may well facilitate the best payment solution.” Instabill works with merchants to find creative solutions to problems ranging from multi-currency transactions to offshore bank processing.
This is the 3rd year that Instabill will be joining the ETA expo. Attendees can find out more by visiting Instabill’s multimedia presentation at Booth 109 in the exhibition hall at the event.
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