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News
The interchange-plus pricing model – employed by Industry consultant Paul Martaus suggested in an
both Heartland and Mercury – has become increasingly interview with The Green Sheet that the lawsuit could have
popular in recent years. Under interchange-plus pricing, far reaching implications but warned the dispute won't be
the acquirer and ISO pass through to merchants all settled overnight. "It's going to be an uphill battle," he said.
interchange and network fees (collectively dubbed "It's a fight for public opinion at the moment."
"interchange") at cost, and add a separate mark-up
(typically a combination of basis points and cents-per-
transaction) for their services. The risky business
Heartland alleges Mercury has been "inflating the of bitcoin
network fees charged by card brands, deceptively passing
those inflated fees on to their merchants by falsely
characterizing them as part of Mercury's uncontrollable ews about the controversial virtual alternative
(i.e., controlled by the card networks) costs and retaining currency bitcoin moves fast. On Feb. 7, 2014,
the inflated amount as pure profit." Based on a review the value of bitcoin on the open market experi-
of about 300 merchant contracts, Heartland concluded N enced a reported one-day price drop of 8 per-
Mercury regularly inflates the interchange component of cent after a prominent bitcoin processor in Japan halted
its fees by as much as four cents per transaction. users from withdrawing U.S. dollars from the exchange.
Potential implications
That development follows late January 2014 reports that
Heartland also said it has been able to identify nearly 30 New York State plans to regulate bitcoin as a result of the
merchants that left Heartland for Mercury after being indictment and arrest of two individuals in New York
convinced that Mercury would undercut Heartland's who allegedly employed the cryptocurrency to facilitate
pricing, only to end up paying more. When merchants the purchase of illicit drugs. All these circumstances
learn otherwise, "Mercury imposes significant costs and underscore the potential hazards of offering bitcoin
barriers to changing providers," Heartland stated. payments when the ecosystem for it remains volatile and
unregulated.
The interchange-plus pricing model – employed by Industry consultant Paul Martaus suggested in an
both Heartland and Mercury – has become increasingly interview with The Green Sheet that the lawsuit could have
popular in recent years. Under interchange-plus pricing, far reaching implications but warned the dispute won't be
the acquirer and ISO pass through to merchants all settled overnight. "It's going to be an uphill battle," he said.
interchange and network fees (collectively dubbed "It's a fight for public opinion at the moment."
"interchange") at cost, and add a separate mark-up
(typically a combination of basis points and cents-per-
transaction) for their services. The risky business
Heartland alleges Mercury has been "inflating the of bitcoin
network fees charged by card brands, deceptively passing
those inflated fees on to their merchants by falsely
characterizing them as part of Mercury's uncontrollable ews about the controversial virtual alternative
(i.e., controlled by the card networks) costs and retaining currency bitcoin moves fast. On Feb. 7, 2014,
the inflated amount as pure profit." Based on a review the value of bitcoin on the open market experi-
of about 300 merchant contracts, Heartland concluded N enced a reported one-day price drop of 8 per-
Mercury regularly inflates the interchange component of cent after a prominent bitcoin processor in Japan halted
its fees by as much as four cents per transaction. users from withdrawing U.S. dollars from the exchange.
Potential implications
That development follows late January 2014 reports that
Heartland also said it has been able to identify nearly 30 New York State plans to regulate bitcoin as a result of the
merchants that left Heartland for Mercury after being indictment and arrest of two individuals in New York
convinced that Mercury would undercut Heartland's who allegedly employed the cryptocurrency to facilitate
pricing, only to end up paying more. When merchants the purchase of illicit drugs. All these circumstances
learn otherwise, "Mercury imposes significant costs and underscore the potential hazards of offering bitcoin
barriers to changing providers," Heartland stated. payments when the ecosystem for it remains volatile and
unregulated.
