umbers are a bit like Silly Putty: You can make them say almost anything you want. Collecting data, on the other hand, isn't nearly so playful; it's more like extracting truths from a philandering spouse. So it shouldn't come as a surprise that the latest GSQ (Vol. 6, No. 1) - in which we attempt to size up the billion dollar acquirers market - is in need of some corrections and clarifications. Before I address the specifics, however, I'd like to make a few observations.

Payment businesses are notoriously tight-lipped when it comes to metrics. It's a philosophy I've never quite understood, because this is a tough business to get your arms around, and it would seem to me that the more forthcoming companies are about what it is they are doing (such as how and how many transactions they acquire, process and/or settle), the better the level of understanding in the market.

I often receive queries from merchants who, for example, have no idea what the name of their acquiring bank is - or what an acquiring bank is, for that matter.

Everyone involved with a payment (from cardholders and issuers to merchants, acquirers, processors and the card brands) needs to understand whom to contact when things are going well, or not so well. But most times it's near impossible to discern where exactly a transaction may be in the authorization-and-settlement stream, to say nothing about who is responsible. That creates all kinds of problems for data collection. It also makes it tough to draw distinctions between companies that acquire, process and settle transactions.

The look of the bankcard business is growing fuzzy. In fact, the bankcard business really doesn't have much to do with banking these days. This is especially true in transaction acquiring. That's why The Green Sheet has decided to rethink its approach to preparing a yearly analysis of the acquiring market.

The 2003 acquirers report - GSQ Vol. 6, No. 4, scheduled for release in December 2003 - will incorporate data from a broader market, including data on ATM and debit cards and check authorization/guarantee services. The cooperation of companies in the acquiring market remains critical, so there is still a risk that some companies will decline to participate or will play loose with numbers. We hope the data-collection effort will create a meaningful set of metrics for comparing transaction-acquiring businesses across brands and product subsets. And this should benefit all parties.

Correcting Omissions

OK, now for the corrections and clarifications.

First, I erred, big time, when I wrote that Bank of America was no longer a member of the billion dollar acquirers' club because of the sale of its agent bank portfolio to TransFirst. Even with the sale of its agent bank portfolio, BA Merchant Services Inc., the merchant-acquiring arm of giant Bank of America, estimates it acquired $61.4 billion in MasterCard and Visa card transactions in 2002, a slight increase over its 2001 tally of $60.8 billion. BA Merchant Services was supporting an estimated 192,000 merchant sites at year-end 2002, down from 198,000 at the end of 2001.

Based on these numbers, Bank of America should have been listed as the eighth-largest acquirer of MasterCard and Visa credit card transactions in GSQ Vol. 6, No. 1.

Also omitted from the list was Retriever Payment Systems. This Houston-based company was once a subsidiary of First National Bank of Omaha, one of the oldest federally chartered banks in the country. A leverage buyout in 2001 has allowed Retriever management to grow the company in size and market reach. Today, Retriever employs a staff of 300 to support a nationwide army of sales agents.

"We're a super-ISO," explained Russ Goebel, a Retriever Vice President. FNB Omaha is its partner (and sponsor) bank, handling much of the back-end processing, but Retriever actually acquires the transactions, Goebel noted.

In 2002, Retriever acquired $7.19 billion in MasterCard and Visa transactions, up from $6.13 billion at year-end 2001. The company also added 15,000 merchant sites to its market coverage, closing out 2002 with 87,000 merchant sites.

To revise the scorecard, then, Retriever ranks 19th in our listing of billion dollar acquirers, just behind FleetBoston Financial and ahead of TransFirst.

Someone e-mailed asking why Certegy wasn't listed. The short answer: Certegy declined. That wasn't the only transaction acquiring company to decline to participate in GSQ's data collection, but it is one of only a few that have consistently declined. Rather than guess, we opted to leave Certegy off the list, as we had in the past.

Another reader asked about Vital Processing Services. The GSQ billion dollar acquirers list has been limited to bankcard acquirers. Vital, as its name suggests, processes transactions; its customers are the acquirers. While the distinctions between bankcard acquirers and ISOs are fuzzy and getting fuzzier (and the list does include companies that are more accurately described as ISOs), it's a bit easier to distinguish processors from acquirers. As a processor, Vital will be profiled in the next GSQ (Vol. 6, No. 2, to be published in April), which is about EBT.

But the reader's question illustrates why it's important that GSQ expand coverage of the transaction acquiring market, a market that might be better served by a moniker like "merchant payment services." I hope that if and when we contact you in the months ahead and ask for input on the GSQ acquiring report, you'll take the time to help produce an honest assessment of this intensely competitive market.

REVISED 2002 BILLION DOLLAR ACQUIRER RANKINGS - THE TOP 20

Bank or SP Owner--Acquirer doing business as

1. J.P. Morgan Chase Co--Chase Merchant Services LLC
2. First Data Corp--First Data Merchant Services
3. National Processing, Inc--National Processing Co., LLC
4. Bank One--Paymentech
5. U.S. Bancorp--NOVA Information Systems
6. Concord EFS, Inc--Concord EFS, Inc.
7. Fifth Third Bank--Midwest Payment Systems
8. *Bank of America--BA Merchant Services, Inc.
9. Global Payments Inc--Global Payments
10. First Nat'l Bank of Omaha--First Nat'l Merch. Solutions
11. SunTrust Banks, Inc. --SunTrust Merchant Services
12. Alliance Data Systems--Alliance Data Systems
13. First Tennessee Bank--First Horizon Merchant Services
14. Heartland Payment Systems--Heartland Payment Systems
15. PNC Bank--PNC Merchant Services
16. Lynk Systems, Inc--Lynk Systems, Inc.
17. Moneris Solutions--Moneris Solutions
18. FleetBoston Financial--Fleet Business Payment Solutions
19. *First Nat'l Bank of Omaha--Retriever
20. TransFirst--TransFirst

* Omitted from original list

Patti Murphy is Contributing Editor of The Green Sheet and President of Takoma Group. She can be reached at patti@greensheet.com