From the July/August 2010 issue of ISO&Agent magazine.
Editor's Note
As someone who enjoys data, one of the treats in producing ISO&Agent magazine is the annual Fact Book issue. This year is no exception. The following pages contain information about the ISO and acquiring market that provides a snapshot of a vital component of the payments industry.
Aside from the many hours compiling and editing the data, the most interesting part of the annual Fact Book survey are the responses to the questions about the types of products companies offer merchants.
For example, there is a lot of industry, and some consumer, interest in using mobile phones as payment devices.
What is interesting about wireless terminals-ISO&Agent has asked about their use since 2007-is that all of the recent publicity surrounding them, especially the consumer-phone units, the industry's adoption of mobile-phone based point-of-sale equipment has increased, too.
In 2007, 83% of the 35 respondents that year offered a wireless point-of-sale terminal. In 2008, 90% of the 29 respondents to that question carried wireless POS terminals. And in 2009, 77% of the 61 respondents to that question sold these devices.
The 2010 survey found that 95% of the 42 respondents sold wireless POS terminals.
This year's survey also supports the suggestion that traditional retail merchants are the bedrock for many ISOs and acquirers, but many companies now are focusing attention on e-commerce merchants.
Of the top five merchant categories, 67% of those surveyed this year targeted general retailers, followed by e-commerce merchants at 55%. Last year, the order was reversed, with e-commerce merchants solicited by 62% of ISOs and general retailers by 61%.
The intriguing aspect is apparent when one also examines how much processing revenue comes from online merchants.
This year, 50% of the 42 respondents said online merchants represent no more than 10% of their processing volume. That is not much more than in 2009 when 42% of the 53 respondents to that question said online merchants generated no more than 10% of their processing volume.
In the 2010 survey, only six respondents-15%-said 50% or more of their volume was derived from online merchants. The tally in 2009 was six, representing 14% of those respondents.
One fundamental characteristic I have learned about this industry is that while ISOs and acquirers share many common elements, each has its own attributes. No one company has the same product mix with similar sales talent or operational expertise as another.
The results do not reveal the characteristics of respondents, merely a snapshot of the current environment.
