Page 38 - GS191201

Education

bigger law firms advising them (I know this because I
Whatever the reason, making large work opposite these firms for ISOs and other fintechs).
processors into mega processors is not Impact on ISO's supply of processing
necessarily a recipe for spurring the
creativity and agility needed to take on Looking only at the processors named above, there was a
reduction from nine to two. When shopping for a new ISO
the new players in the market. deal, an ISO has fewer places to go, therefore reducing the
ISO's ability to play one processor off of another. Simply
put, each processor has fewer competitors against which it
notoriously difficult to corral on any topic, let alone a must compete to earn the business of a given ISO.
highly technical, legal and business analysis of possible
correlations between a reduced variety of suppliers and Regardless, any litigation in payments – even over unpaid
price or product offerings. The chances of such a claim residuals to an ISO – is so complicated that the chances of
happening anytime soon therefore are not high. a claim making it to court and to trial are greatly reduced
by the difficulty in explaining any piece of our business to
Impact on services for banks a judge or jury.
What about the banks? Banks rely on processors to I do not have the resources to determine whether the recent
process transactions in acquiring and issuing. Increased mergers have reduced competition in the payments space,
concentration of processing supply is probably causing but it does not take a rocket scientist to ask the question.
some chatter around bank boardroom tables about
whether banks are cuckolded by an ever-smaller collection Another question that arises is why the mergers are
of processors who are ever less motivated to compete for happening in the first place. One obvious answer is that
bank business as bank choices decline in number. processors see an opportunity to create efficiencies,
increase revenue and reduce costs by eliminating
If an anti-trust claim comes out of the recent mergers, it redundancies. A less obvious answer is that processors
might first come from the banks, which have more and

1-888-482-6012

March 09 - 10, 2020 www.FutureDigitalFinance.com
Hyatt Regency Miami, FL FutureFinance@wbresearch.com

Future Digital Finance is
the leading conference that
reinvents the consumer

banking experience.
Come together with 200+ of the
brightest minds from the most
innovative financial institutions
FINANCIAL in an intimate setting to shape
INSTITUTIONS
the future of finance. With 30+
GET 25% OFF hours of interactive sessions and
TODAY 60+ speakers from companies
WITH DISCOUNT CODE: like RBC, PNC Bank, Citi and
FDF20GS
Barclays, you’ll walk away from
actionable take-aways to help
you remain competitive in the era
of transformation.