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Consumer interest in choosing how and in what currency to pay will convince merchants to switch to a merchant-service provider that offers an integrated product instead of the a la carte offerings many currently use, former First Data Corp. CEO Charles Fote believes. Fote is creating a holding company that will integrate electronic-payment and funds-transfer products at the point of sale (CardLine, 6/16). A challenge for the upstart will be convincing merchants that already offer funds-transfer or bill-payment services from multiple vendors to switch to an integrated product, says Gwenn Bezard, research director at Boston-based consulting firm Aite Group LLC. A product has to be compelling and add value to displace a merchant's existing product offerings, he says. In addition, some of the existing providers, such as Western Union, already have a fairly monopolistic hold on the industry, Bezard notes. "Why would a merchant take a [funds-transfer] product through an integrated vendor? Why not go right to Western Union?" he asks. "Fote and his team believe consumer choice will drive the delivery of payment" products, says Fote spokesperson Staci Busby. For example, if a consumer is making a purchase in New York and wants to use euros as payment, "through global currency conversion, the merchant can take euros as payment, and the consumer won't have to be concerned" about the accuracy of foreign-exchange calculations, she says. The convenience the customer experiences in choosing among payment products increases the likelihood that consumer will return to the merchant in the future, says the spokesperson.
