ISO Study Finds Acquiring Industry Concentrated Among Few Players

by Mercator Advisory Group 0

In a study released this week, consulting firm First Annapolis finds that the merchant acquiring industry is concentrated among only a few companies that provide merchants with card payment acceptance services. Though this seems to bear out year after year when data about the acquiring industry is published (including Mercator’s annual study of the U.S. merchant acquiring market), the study “backs up perceptions with hard numbers,” according to an article about the study in Digital Transactions. As if we didn’t definitively know this already!

From the article:

“There’s a pretty small number of banks sponsoring the ISOs in comparison with the overall banking industry,” notes First Annapolis senior consultant Lacy Kridler.

The relationships between sponsor banks and third-party processors typically determine how many ISO sponsorships a bank has, according to Kridler. Usually the processors deal directly with ISOs, and big processors such as First Data Corp. and Global Payments Inc. work with numerous ISOs, many quite large. Wells and First Data have a longstanding partnership as does HSBC with Global. Thus, those banks’ dominance as sponsors “is likely driven by arrangements they have with First Data and Global Payments, respectively,” says Kridler.

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