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Table of Contents

Lead Story

Outside forces impinge on payments in 2011


Industry Update

California Lucky's unfortunate breach

Experts discuss the future of mobile payments

NRF sues Fed over Durbin regs


SMBs: Security must become serious

Bill Farmer
Mako Networks

An interview with Marc Abbey

Ken Musante
Eureka Payments LLC

Status report: U.S. economy Q3 2011

Selling Prepaid

Prepaid in brief

Will prepaid pivot with Green Dot's purchase?

'Smart' gifting gears up


Thinking outside the bank

Patti Murphy
ProScribes Inc.


Street SmartsSM:
EMV's time is nigh

Bill Pirtle
C3ET Credit Card Consortia for Education & Training Inc.

QR codes - the new call to action

Stephen Enfield
POS Supply Solutions

Fraud trends 2012: Like 2011, only more so

Nicholas Cucci
Network Merchants Inc.

Crisis management as opportunity

Dale S. Laszig
Castles Technology Co. Ltd.

ISOs welcome in the POS waters

Jerry Cibley
United Bank Card Inc.

Parlay tradeshow costs into social media bonanza

Alan Kleinman
Meritus Payment Solutions

Company Profile


New Products

All-in-one payment platform

FrontStream Payments Inc.


Use your human gifts


10 Years ago in
The Green Sheet


Resource Guide



2012 Calendar of events

A Bigger Thing

The Green Sheet Online Edition

December 26, 2011  •  Issue 11:12:02

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Pillars of payments
An interview with Marc Abbey

By Ken Musante

I first met Marc Abbey, Managing Partner at First Annapolis Consulting, early in my career at Humboldt Merchant Services. When interviewing him recently for this article, I was reminded of just how cerebral he is and how his industry discussions and presentations dig deeper into data than many other presenters.

Q. Describe how you entered the payments industry.

A. I began at a bank consulting firm, and we did a lot of ATM work, including the formation of the Southeast Switch, which was the predecessor to STAR, and then worked for Philadelphia National Bank in the MAC ATM network. The division within the bank was called Electronic Payments. Concord purchased EPS, and later First Data purchased Concord.

ATM consulting was my entry into the payment space. I then went to business school and had some additional experience before being hired into First Annapolis in 1991.

Q. How has your consulting agency changed over the years?

A. We have become much bigger and broader. Originally we only did issuing and acquiring. Today we have many more disciplines and areas of expertise. Looking back, we were much less sophisticated (as was the industry) at the beginning than we are now.

For example, we would do very simple financial reporting for acquirers and help them create strategic business units. This allowed them to track their profitability much more closely and was innovative at the time. Today, the industry is much more advanced, so we have had to evolve to continue to provide more and greater information and value.

We are a much larger company now, too. We have over 80 professionals and 20 support staff today as opposed to approximately 50 employees just five years ago. The growth has been broad-based, both geographically and across our practices. For example, we now have 12 individuals in our European practice.

As an aside, the European market will be tumultuous over the next few years. The economy will be down, but there will also be bank consolidation, mergers and acquisitions, so we will assist in those areas, as well as with risk and cost containment projects.

Q. How have your clients changed over the years?

A. As we have gained sophistication, so have our clients. Our clients are much more capable today and do many more things in-house. Consequently, we must continue to evolve so we can add value. Additionally, our clients used to be primarily banks.

In the 1990s, that changed and we gained many different nonbank entities as our customers. Today our clients may be entrepreneurs, large banks or larger ISOs. We must continue to scan the environment and understand our clients so we can assist them and add value.

Q. What is your most challenging business issue?

A. Assimilating and hiring new staff. There are brilliant people who make poor consultants. Consultants must come into a client organization and recognize how decisions are made within that company. You need to recognize the capabilities of that organization.

Consultants don't make decisions; they help other people make decisions. This type of talent is very unusual, and we need to ensure we bring the right person in who can understand the business quickly and then work with the management team, along with their capabilities and constraints.

Q. What change did you not see coming or caught you by surprise?

A. I was surprised by the impact of regulation over the last few years. The impact has been enormous. Both the Card Act [the Credit Card Accountability, Responsibility and Disclosure Act of 2009], which affected the issuing business, and the Durbin Amendment [to the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010] have such a monumental impact on our business. I would not have forecasted this three years ago.

Future regulation will be dependent upon the next election; however, certain regulators, like the Consumer Financial Protection Bureau [which was created with the Dodd-Frank Act], will likely not be favorable to the financial services industry, and their effects are yet to be fully seen or implemented.

Q. What are you most proud of over your career?

A. I am proud of what First Annapolis has become. I take a lot of satisfaction in our client engagements. I became Managing Partner in 2007, but I enjoy being involved with clients on an individual basis. As a consultant, we need to be excited by our clients' success, as ultimately that is how we are measured.

Q. If you could have a 'do over' with any aspect or project, what would it be?

A. If there is one category of things I would do differently over my career, it's an overestimation, especially early in my career, of what a client is capable of doing _ either because of their capabilities or political environment. If I could isolate one thing I wish I had been better at, early in my career, it would have been my ability to estimate my clients' abilities and therefore have been more accurate in my recommendations.

Q. How will our industry evolve over the next five years?

A. There are a handful of key trends within the acquiring industry:

  1. Technical change: If EMV [Europay/MasterCard/Visa], for example, is implemented as Visa is prescribing it, it will radically change our industry.

  2. Marginalization by innovative players: Because of changes (such as Square, Intuit, ISIS and others), some entities will be marginalized or disintermediated. An example is offers redemption. This may be provided by an entity other than an acquirer.

  3. Resumption of consolidation in our industry: This will be fueled by the exit of private equity firms from their investment positions. There has been a pause in our consolidation over the short term; however, in the near future, private equity firms will pursue their exit strategy. This will radically shake up our industry.

Q. How will the Durbin Amendment impact our industry?

A. For some acquirers, Durbin has been a windfall, although over a short number of years this will be competed away. It remains to be seen what issuers do in response to Durbin, so we can not fully forecast what the effects will be. A large swath of merchants are not seeing the benefits of Durbin, and this will cause renewed activism within the payments space. Because of the activity, we are likely to see another shoe drop with regard to regulation.

Q. Is there anything else you wish to share?

A. It is a wonderful time to be in the payments space. This business is changing faster than any time in my career, and that is saying a lot. Although it will not always be like this, right now it's a great time to be in this business.

First Annapolis was one of the very first consulting firms that specialized in the card processing space and understood the ISO market. First Annapolis' publications were available before many of the now existing trade publications (and the Internet) were available. They were one of the few resources that provided data to aid in comparison of industry benchmarks.

Whenever I wanted to present to our board of directors, I would search out First Annapolis material, as I had the greatest confidence in their work and studies.

I hope this interview provided you further insight into Marc Abbey's background and viewpoint.

Ken Musante is President of Eureka Payments LLC. Contact him by phone at 707-476-0573 or by email at For more information, visit

Notice to readers: These are archived articles. Contact names or information may be out of date. We regret any inconvenience.

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