Page 1 - GS231101

November 13, 2023 • Issue 23:11:01

Payments, a retrospective
Payments, a retrospectiv e

The extraordinary life of a payment

transaction – a multilevel game

By Dale S. Laszig want to renegotiate the costs," he said. "I saw one ISO send
out letters to the merchant level salespeople [MLSs] who
he changing payments landscape could be com- left after they began raising merchant fee structures and
pared to three-dimensional chess: a multilevel delaying residual payouts, begging them to come back."
playing field where every move simultaneously
T impacts players on every board. Over time, play- Consolidation impacts all levels of commerce, Kopelman
ers are eliminated, leaving only the most strategic who can noted, including processors, technology and POS service
execute three-dimensionally. In a similar way, each pay- providers and payment facilitators. Technology-level
ment transaction reverberates through a multitiered eco- players are buying multiple gateways, and POS brands are
system as the payments industry rolls along, like a mighty getting into payment processing, he added.
river, absorbing companies and shedding players.
"After ISOs and MLSs helped leading POS companies build
Allen Kopelman, co-founder and CEO of Nationwide their businesses, we've seen them turn their backs to us and
Payment Systems, has seen consolidation at all levels of the sell direct to merchants," he said. "Even the card brands, like
payments ecosystem. Recalling the early shock waves in Visa and Mastercard, have evolved beyond their original
the 1990s, when Super ISOs began acquiring smaller ISOs, business models into technology companies."
he said the trend was just getting started.
Visa Acceptance Solutions, for example, is designed to help
"All these super ISOs gobbled up smaller ISOs and moved acquirers create custom payment solutions, Kopelman
on to major processors," he said, citing Global's $4.3 billion stated. The company's website describes the platform as
acquisition of Heartland Payment Systems in 2015; Fiserv's
and First Data's merger, which generated over $4 billion
in cash flows in 2019; and FIS' $43 billion acquisition of
Worldpay in 2019, which became a $17.6 billion spinoff in Contributed articles inside by:
2023. "Each time a major processor is taken off the table, it
leaves larger, high-risk merchants with fewer choices." Nick Cuuci................................................................................................28
Multiple playing fields Allen Kopelman .....................................................................................30

Mergers and acquisitions affect downstream relationships, Gregg Aamoth .......................................................................................33
Kopelman added, stating that with each acquisition, there's Johan Gerber .........................................................................................34
a new sheriff in town, who wants to rip out and replace
everything. "They want to renegotiate contracts; they

Continued on page 26