Meghan Boyer

Transaction Network Services Inc. and Blue Bamboo have entered into an agreement that enables independent sales organizations, acquirers and processors to sell a mobile-payment system, according to the companies.

Residuals are a standard form of payments revenue for ISOs and sales agents, but the weak economy, decreased transaction volumes and margin compression are making it more difficult for individuals to subsist on residual income alone. As some agents’ residuals grow tenuous, more salespeople are expressing interest in up-front revenue to bolster their incomes.

Compliance among small merchants with the Payment Card Industry Data Security Standard remains relatively low, but ISOs may be able to increase compliance rates in their portfolios by launching multifaceted campaigns, some industry insiders suggest.

Nxgen International is opening operations in the United Kingdom and Italy as part of a European expansion strategy the Whitefish, Mont.-based merchant-service provider announced last week. Diversifying geographically can help Nxgen grow and differentiate itself further, says Giuseppe Caltabiano, Nxgen president.

A recent study that focuses on Payment Card Industry Data Security Standard compliance among large merchants also is helpful for educating ISOs and the smaller merchants with which they typically work, observers note. ISOs should educate themselves not only about their specific markets but also about all aspects of data security and compliance in the payments industry to better serve their clients and ensure all merchants protect card data, they say.

Despite a fourth quarter net loss Heartland Payment Systems Inc. attributes largely to breach-related expenses, the Princeton, N.J.-based payment processor sees “encouraging progress” in small and midsize merchant transaction-processing volume and same-store sales, Robert Carr, Heartland chairman and CEO, told analysts during a conference call last week.

Sales agents for ISOs increasingly are seeking additional industry training to improve their abilities to better compete for scarce business during the difficult economy, observers note.

MTN Group is launching a mobile financial-services product for its more than 100 million telecommunication subscribers in Africa and the Middle East that uses Gemalto NV’s SIM-based security module, according to the France-based card vendor. The product will enable subscribers to check account balances and conduct such mobile services as funds transfers and payments.

Processors, not ISOs, likely will handle many provisions of a law that takes effect next January requiring acquirers to report merchant credit and debit card transactions to the Internal Revenue Service, says Henry Helgeson, co-CEO of Merchant Warehouse Inc., a Boston-based ISO.

News last week that North American Bancard has hired a financial advisor to help sort out its future and that Merchant Data Systems Inc. has purchased a 1,300-merchant ISO potentially is signalling a resurgence in mergersand acquisitions among portfolio buyers and sellers. It also signals further consolidation in the ISO and merchant-acquiring industry.

Automated clearinghouse transaction processor ACH Federal LLC is introducing a merchant-referral partner program for ISOs in the hopes of expanding its client base, according to the Chattanooga, Tenn.-based company.

Total System Services Inc., known as TSYS, plans to reduce expenses and employee headcount in anticipation of another difficult year. The Columbus, Ga.-based transaction processor believes it will see continued constriction in its business until the economy begins to recover and unemployment levels fall.

The loss of large clients, price compression, currency valuations and the tough economy all contributed to a difficult fourth quarter and 2009 for Total System Services, and its executives said the same issues are likely to affect it well into this year.

A general approach to marketing for ISOs seeking new clients is more likely to fail than would a campaign that targets specific merchant segments and generates referrals, some observers believe.

Visa Inc.’s devotion to signature-based contactless transactions has caused one large retailer to take a stand against the card network, and it also poses an obstacle to adoption of EMV cards in the United States, says an industry analyst.

As more consumers go online to make holiday purchases in November and December, so-called cybercriminals also increase their efforts to obtain consumer information fraudulently, observers say. The potential for data theft and increased attacks by fraudsters, however, does not deter many consumers from completing online transactions, according to recent survey data.

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Despite a revenue boost it attributed largely to its joint venture with Bank of America Corp., First Data Corp. reported a $288.9 million loss for the third quarter, 76% wider than the year-earlier loss.

Despite a revenue boost it attributed largely to its joint venture with Bank of America Corp., First Data Corp. reported a $288.9 million loss for the third quarter, 76% wider than the year-earlier loss.