Retailers

Many organizations, such as banks, local business associations, Web-site designers and software developers, refer their customers to independent sales organizations and acquirers for merchant-processing services. The ISO or acquirer then shares with those organizations a percentage of its processing revenue. Or it may provide the referring organization a one-time finder’s fee when the merchant begins processing transactions.

VeriFone Holdings Inc. is supplying 130,000 payment products to Russian bank Sberbank in a multimillion-dollar deal announced today, according to the San Jose, Calif.-based payment-terminal manufacturer. Sberbank is Russia’s largest bank.

Merchant-portfolio sellers that harbored visions of selling their portfolios at 36 times their monthly residual revenue finally have acquiesced to buyers’ demand to pay less, say observers of the acquiring market. Residual revenue is the recurring transaction revenue acquirers collect from merchants.

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

Some independent sales organizations are providing qualified leads to sales agents as incentives so they will work harder. The tactic tends to motivate the agents while enabling the ISO to spend less on incentives than they would through monetary bonuses, according to some observers.

Dejavoo Systems has signed a distribution deal enabling Tasq Technology Inc. to resell Dejavoo products, the Syosset, N.Y.-based point-of-sale equipment maker announced today. Tasq is a Rocklin, Calif.-based POS-equipment distributor.

Ritz Interactive Inc. says it is using payment-processing technology from Merchant e-Solutions Inc. to support its more than 18 Web sites, which include RitzCamera.com and Wolf Camera.com. Ritz began using the service a few months ago but only recently made the deal public.

Though merger-and-acquisition activity has been fairly quiet in the past 18 months, activity began to pick up in the fourth quarter of 2009, says Ray Sobczyk, a senior associate and strategic acquisitions expert at the Strawhecker Group consultancy who helps merchant-portfolio buyers and sellers make deals. And the activity is expected to continue this year.

A sales agent presents a proposition to move a portfolio of merchants from one ISO to another. While it sounds like a good deal for the ISO that receives the portfolio, it might not be. The ISO that accepts the merchant portfolio could be sued, even if it has not signed a written contract agreeing not to move the merchants in question.

Merchants always are interested in the cost of payment card processing, but sales agents should evaluate the importance of price when listening to merchants about their needs, observers say.

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.

A majority of UK consumers hold retailers primarily responsible for making online transactions safer, and fraud risk remains a top concern for many UK shoppers when making online purchases, according to data released today from CyberSource Ltd., a UK-based subsidiary of CyberSource Corp.

President Collect Service Corp., a Taiwan-based courier service, plans to use approximately 1,600 VeriFone Vx670 wireless payment terminals to collect home-delivery payments, VeriFone Holdings Inc. announced today. Many Taiwanese dislike submitting their payment card information for online or television shopping until the products are delivered, San Jose, Calif.-based VeriFone says.

In today’s economy, merchants still want to know how much credit and debit card processing is going to cost, but independent sales organizations say price is only one part of the sales pitch. Listening to what the merchant says it needs can be equally as important in securing the deal.

From the January/February 2010 issue of ISO&Agent.

From the January/February 2010 issue of ISO&Agent.

From the January/February 2010 issue of ISO&Agent.

From the January/February 2010 issue of ISO&Agent.