Discover Financial Services’ merchant-acquiring efforts impressed independent sales organization and acquiring respondents to a recent Aite Group LLC survey.
In the survey, the results of which Aite released July 21, Discover’s merchant-acquiring effort received a 3.4 ranking on a 5-point scale, with five of the 18 respondents indicating they were “very impressed” with the company’s strategy and execution.
MasterCard Worldwide ranked second at 3.1, followed by Visa Inc. at 2.9 and American Express Co. at 2.9.
Discover stood out in particular because of its efforts to add third-party acquirers, a program the company started in earnest in 2007.
Merchants can receive Discover transaction data on a single statement and pay a bundled rate that includes MasterCard and Visa transactions under the program, eliminating the need for them to have a separate Discover agreement.
“Their strategy of working with ISOs and acquirers in order to match Visa and MasterCard’s adoption by merchants has been successful,” states Adil Moussa, Aite analyst and author of the report. Moussa conducted the survey during the Electronic Transactions Association annual meeting in April.
Of those surveyed, 61% said they were “impressed” or “very impressed” by Discover’s work, followed by Visa at 39% and MasterCard at 33%. Only 22% of respondents cited an “impressed” or “very impressed” reaction to the AmEx.
But Visa also had the highest “not at all” or “not impressed” response at 31%, Moussa says. Discover and MasterCard had the lowest unfavorable rankings, at 22% each. American Express came in at 28%.
ISOs and acquirers generally cited a Visa off-cycle interchange increase as the main reason for their dissatisfaction, Moussa says. Typically, Visa and MasterCard release interchange-rate changes in April and October.
Concerns over AmEx’s revenue-sharing program for acquirers affected its rating, Moussa says. According to Moussa, the respondents’ concerns are that AmEx shares revenue with its acquirers for a “limited period … before the totality of the payments are retained entirely by American Express.”
What do you think about this? Send us your feedback.
