ORLANDO, Fla. -- Teaching legislators how electronic payments work could help protect the industry from unwise regulation, speakers agreed here Tuesday at the Southeast Acquirers Association annual conference.
“Sometimes, they’re just throwing things against the wall and seeing what sticks,” Stephanie Lusher, Vantiv senior vice president of sales, said of lawmakers.
Her comments came during a wide-ranging panel discussion on the “state of the union” of the acquiring industry.
Another speaker who addressed the need to teach elected officials about industry basics, Kevin Jones, president of SignaPay, noted that the Electronic Transactions Association has taken on that task.
As a member of the ETA advisory board, Jones noted that the organization’s leadership has to balance the use of its legislative resources between education and lobbying.
Lobbying could get a boost if the industry came together to speak with a single voice, suggested another panelist, Greg Boardman, Ingenico senior vice president of product and development and a board member of the Smart Card Alliance.
Another speaker, consultant Paul Martaus, maintained that acquirers’ lobbying efforts lag behind those of other industries. He cited the work of the Merchants Payment Coalition, whose objectives are often at odds with those of acquirers.
“We don’t have an answer to that,” Martaus said of the coalition and its lobbying.
However, Jones maintained that the ETA has achieved some lobbying success with a staff just two.
Most of the lobbying discussion centered on the federal government, but Martaus pointed out that laws and regulation from state and local government also affect acquiring.
Moreover, Martaus contended that the industry simply lacks the funds to lobby effectively.
“Wal-Mart could buy the ETA with its lunch money,” he said.
Though it lacks the riches of Wal-Mart, the industry does wield enough financial power to affect the nation’s economy and should focus that clout on advocacy, Jones maintained.
Whatever one thinks of lobbying prospects, the government’s scrutiny of acquiring seems unlikely to abate anytime soon, according to Lusher.
A friend in Congress reminds her that controlling the currency is one of government’s most basic functions and that these days that also includes electronic payments, she said.
But new entrants to the acquiring business avoid regulation because they aren’t banks even though they may hold vast sums of funding generated by selling prepaid cards.
And those new entrants frighten the industry’s incumbents, noted Martaus. The newcomers are willing to view payments as a loss leader in their quest for valuable data, he warned.
Still, the industry’s assessment of newcomers, including Google, Dwolla and Square, is softening as they form relationships with old-school players.
The new companies are expanding electronic payments to more retailers which means more transactions to process even if margings are compressed, said Lusher.
New players also bring new ideas, she said, adding that “innovation is always good.”