Opportunities for new business are arising in Canada’s acquiring market as independent sales organizations work to develop an ISO model there, according to a report released last week by Maynard, Mass.-based Mercator Advisory Group Inc.
A mix of foreign- and Canadian-based ISOs are beginning to make their presence felt in Canada by signing up merchants in fields that include e-commerce, quick-service restaurants, convenience stores and transit, David Fish, the Mercator senior analyst who wrote the report, tells PaymentsSource.
Until recently, seven big players, a mix of Canadian banks and processors, dominated the acquiring market in Canada, Fish says. Banks did their own acquiring because they saw the function as part of their broader offering, he notes.
Now, as ISOs move into the market, U.S.-based players are finding subtle differences north of the border, Fish maintains.
For example, Canadians do not respond as favorably as Americans do to telephone sales, he says. Canadians prefer face-to-face contact with a local representative, suggesting American aspirants to the market might want to hire Canadian agents, Fish says.
Finding those agents may present challenges, however, because many of the talented local acquiring-industry reps already have referral arrangements with banks, he notes.
The Mercator report has generated interest in many quarters, including among American ISOs, because of technological issues, including the introduction in Canada of EMV smart cards, mobile and contactless payments, and such shifts in Canada as a move toward more online purchases and more use of payment cards for services, Fish says.
Canada’s close proximity and cultural similarities also make the market attractive to American ISOs, notes a Mercator press release on the report.
American ISOs also are drawn to Canada’s relatively stable and well-regulated financial system, solid long-term economic performance even during the recession, low business-bankruptcy rates and a population relatively skilled at managing debt, the release said.
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