The payments industry has taken a beating lately in the media. Today's ISOs and merchant level salespeople (MLSs) must deal with regulatory legislation, security breaches, fraud, myriad new products and services, unprecedented scrutiny - the list seems endless.
Regardless of recent media attention, the payments industry is healthy. Net earnings for fiscal year 2007 and the first quarter of 2008 were up overall despite higher credit card costs, market fluctuations and a deepening economic downturn.
CO-OP Financial Services, which operates the largest automated teller network serving credit unions exclusively, saw a 10 percent increase in cash distribution to its shareholders totaling $24.5 million for 2007. "Our electronic funds transfer services, strategic partnerships and growing membership play a significant role in allowing us to achieve astounding transaction figures," said Stan Hollen, CO-OP Financial's President and Chief Executive Officer.
Alpha Card Services Inc., a Pennsylvania-based processor and merchant acquirer, adds about 4,000 merchants a year and saw revenues approaching $2 million for the first quarter of 2008, nearly half of the amount of revenue the company earned for all of 2007.
"From 2004 to 2006 we had 1,540 percent growth," said Lazaros Kalemis, Alpha's CEO. Kalemis is confident about overall industry growth, but he sees a sound infrastructure as a major key to success. "I think it depends on how somebody is set up," Kalemis said. "We're a conservative company but we're growing at a good clip, and our growth is high due to our attrition rate which, at 4.5 percent, is about 12 percent below the industry average."
First quarter 2008 numbers for some of the larger acquirers and card brands include:
As always, the payments industry is going through a metamorphosis; new markets, technologies and revenue growth opportunities for ISOs and MLSs continue to evolve.
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