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Likewise, new TPAs will have a harder time acquiring the customer base needed As will have a harder time acquiring the customer base needed
do so. Certainly $1,000 is a small fee, y $1,000 is a small fee,
Likewise, new TP do so. Certainl
but it's a tremendous hurdle for a ut it's a tremendous hurdle for a
to justify the fee for every acquirer that may want to do business with the TPA. y the fee for every acquirer that may want to do business with the TPA.
to justif b
Now, translate this into the real world: existing payment gateways will have startup payment gateway. Perhaps
Now, translate this into the real world: existing payment gateways will have
startup payment gateway. Perhaps
tremendous insulation against upstart competitors, which will need to vie for that is part of the fee's intention: to
tremendous insulation against upstart competitors, which will need to vie for
that is part of the fee's intention: to
limit TPAs that are not significantly
"shelf space" with every acquirer they wish to sell to.
"shelf space" with every acquirer they wish to sell to. limit TPAs that are not significantly
liquid. This disparity will be
liquid. This disparity will be
magnified when comparing a third-
magnified when comparing a third-
Increasin
Increasing hurdles for startupsg hurdles for startups party gateway to an acquirer-owned
party gateway to an acquirer-owned
payment gateway.
payment gateway.
Where an entrenched payment gateway could demand that an acquirer pay here an entrenched payment gateway could demand that an acquirer pay
W
t the $1,000 initial and renewal fee, a startup gateway will be in no position to he $1,000 initial and renewal fee, a startup gateway will be in no position to
Jon Shipley, President of Select
Jon Shipley, President of Select
Bankcard
commented
Bankcard commented on the
the
on
difficulty in complying with the fee
difficulty in complying with the fee
change. "This new rule is going to
change. "This new rule is going to
be a real issue because we will have
be a real issue because we will have
to collect a fee from various entities
to collect a fee from various entities
that we have no direct relationship
that we have no direct relationship
with," he said. "When considering
with," he said. "When considering
the number of payment gateways,
the number of payment gateways,
hosted shopping carts and other
hosted shopping carts and other
entities that should be registered
entities that should be registered
through each acquirer, the aggregate
through each acquirer, the aggregate
fee amounts are going to be
fee amounts are going to be
significant, and the billing allocation
significant, and the billing allocation
isn't going to be straightforward."
isn't going to be straightforward."
Although this new structure will
Although this new structure will
likely change things incrementally
likely change things incrementally
for existing players, it will dampen
for existing players, it will dampen
the outlook for startup payment
the outlook for startup payment
gateways. It will continue to
gateways. It will continue to
marginalize tertiary TPAs such as
marginalize tertiary TPAs such as
hosting companies and shopping
hosting companies and shopping
carts that have not been embraced or
carts that have not been embraced or
registered.
registered.
Most payment gateways are properly
Most payment gateways are properly
registered because the acquirer must
registered because the acquirer must
know who the gateways are in order
know who the gateways are in order
to properly populate value-added
to properly populate value-added
reseller sheets. Shopping carts and
reseller sheets. Shopping carts and
hosting companies, however are
hosting companies, however are
often unknown to the acquirer.
often unknown to the acquirer.
This fee policy will not encourage
This fee policy will not encourage
acquirers or merchants to fully
acquirers or merchants to fully
explore entities that touch card data.
explore entities that touch card data.
I suspect, too, that unless monitoring
I suspect, too, that unless monitoring
is increased, even more players
is increased, even more players
will serve merchants without being
will serve merchants without being
registered with their acquirers. I
registered with their acquirers. I
know that is not the intent of this
know that is not the intent of this
change.
change.
Ken Musante is President of Eureka Musante is President of Eureka
Ken
Payments LLC. Contact him by phone at
Payments LLC. Contact him by phone at
707-476-0573 or by email at kenm@
707-476-0573 or by email at kenm@
eurekapayments.com. For more informa-
eurekapayments.com. For more informa-
tion, visit www.eurekapayments.com.
tion, visit www.eurekapayments.com.
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