Processors are investing billions of dollars to build huge menus of tools for retailers that may no longer have the time to work with multiple vendors. These transformations are years in the making, and each investment or acquisition has the potential to dramatically change the competitive landscape.
For years, William Shatner plugged Priceline, an online portal to take costs out of travel by pitting hotels and airlines against their rivals. A similar idea is taking shape in the market for payment providers.
Payment and marketing company Harland Clarke Holdings has agreed to buy the popular online coupon site RetailMeNot for an equity value of $630 million, a deal that would add digital discount technology to Harland's existing merchant services.
The U.S. merchant acquirer-processor arena is so mature that the only dramatic gains typically come from consolidation, leading to even more formidable combinations that make the next phase of growth even tougher. But there are also opportunities for companies that know how to specialize.
Merchant acquirers say the industry has worked over the course of decades to improve its ethics. But some acquirers report that deceptive practices and dubious tactics still exist, and that the card brands could do a better job at enforcing their own rules.