irst Annapolis, a management consulting and financial advisory services firm focusing on the payments industry, recently completed a study of fees that acquirers charge regional and small merchants.

The study included 38 acquirers and ISOs, 19 of which are ranked among the Top 50 U.S. acquirers. The participants generated 65 percent of the industry's volume in 2000. The study found that regional and small merchants are commonly subject to the pricesfound on the chart on this page.

Five of the fees also were included in a 1999 First Annapolis study: Visa/MasterCard transaction fee, American Express transaction fee, statement fee, annual fee and chargeback fee. While the median price ranges for these fees did not change during the past two years, there was strong evidence of price convergence toward the median ranges.

"To a much greater degree than in 1999, acquirers have gravitated to the same price points on key fee items," noted First Annapolis partner Marc Abbey.

Barry Davis, a senior consultant, said, "Unbundled pricing strategies have emerged as a dominant strategy among various classes of acquirers."

First Annapolis specializes in both consulting and financial advisory services.

First Annapolis Consulting offers strategic and operational level planning, financial analysis and management, marketing strategy and research, operations planning and re-engineering, risk management and decision support and modeling.

First Annapolis Capital provides merger and acquisition advisory services related to consumer and merchant credit cards, mortgages, consumer loans, ATMs and other electronic banking businesses.