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Acquiring Industry at TRANSACT 17 in Vegas: Where Else?

Posted by Brandes Elitch | Tue, May 23, 2017 @ 02:19 PM
acquiring industryFor 25 years, the Electronic Transactions Association has been the trade association for the credit card acquiring industry — the industry that enables merchants to take credit and debit cards as payment for goods and services. Today, it has branched out and embraced all kinds of payments, not just card based ones.

There are 500+ member companies in the ETA and their big annual tradeshow is called TRANSACT. It is a really big show: over 4,000 attendees, an exhibit hall with over 200 exhibits (including 50 first time exhibitors) as well as keynote presentations and panels, and 40 educational sessions and seminars. It is a safe bet that anyone who is anyone in the acquiring industry was at the show.

There was a contest for best offerings in risk solutions, social media integration, payment facilitator and mobile offering, which shows you how far things have come since the early days of selling credit card terminals. A Social Media and Digital Marketing Platform from i-Mobile3 won the ETA Technology Innovation Award for best Social Media Integration as well as the Technology Innovation Showcase Award for Best Overall Technology and a $10,000 prize.

The Early Days of the Acquiring Industry

acquiring industryThe ETA was originally set up for the benefit of the people selling credit card processing. These people are called Independent Sales Organizations (ISOs) or Member Service Providers (MSPs). They are the people that went to the merchant’s location and installed ten million credit card terminals. Just imagine for a minute how much work this is. The Strawhecker Group reports that last year 240 acquirers and ISOs processed $5 trillion in payments in the U.S.

The GreenSheet was the first publication that reached out to the ISO community. CrossCheck was one of the founders of the Bankcard Services Association, the predecessor of the ETA.

ETA Functionality & Certification

The ETA is run by member committees, staffed by volunteers of the member companies. The volunteers put a lot of work into this — writing position papers, doing analysis and acting as a sounding board.

The ETA has a member certification program too, called “Certified Payments Professional.” There is an organized body of material to study, and there are other requirements as well to sit for the exam. When a CFO or controller sees the “CPP” designation on a business card, they know that this person has done their homework to understand the complexity of the payment ecosystem. Members put a lot of work into addressing all the manifold changes going on in the payments industry right now. Industry issues include EMV, mobile payments, compliance, tokenization and encryption, digital currency and Big Data, just to name a few.

I want to recognize the hard work and dedication that I have witnessed over the past few years by the person who manages the committee work: Amy Zirkle, vice president of Industry Affairs. Amy has seemingly boundless energy and the ETA is lucky to have her aboard. It is not easy managing multiple committees with 20 or so people on each one! It must be like herding cats!

Speakers at TRANSACT 17

At the show, there are usually a few keynote speakers. Sometimes, they just want to tell everyone how great their company is. But in some rare cases, the speaker is able to communicate succinctly and on-point about all the things swirling about the payments space right now, and make sense of it.

The first keynote was given by Craig Vosburg, president of MasterCard North America. Let me say right out that Craig was one of the best speakers I have ever heard in my 30+ years in the payments business. He must have had some stage training.

Since I write a monthly column for The GreenSheet, I always sit in the front row and I couldn’t have been more than 30 feet away from Craig. Still, I couldn’t tell if he was using the teleprompter or not. He didn’t miss a beat in what was a 45-minute presentation that was so fast-paced and jam-packed with information that I could barely keep up. (Incidentally, I forgot my pen, and when I tried to borrow a pen from the people sitting around me, nobody had one — they were all using their laptops or devices to take notes!).

Here are some of the points that Craig made.

  • The payments industry has driven $430 billion in GDP growth in the US in the last decade and created 6 million permanent jobs!
  • The industry is a foundation for people to innovate commerce, enhance productivity and increase the velocity of money.
  • The industry is now focused on making payments safe, easy and ubiquitous. This includes EMV, tokenization and transaction intelligence.
  • U.S. payment flows are around $40 trillion, of which a quarter of that is consumer payments, and only half of that is card based. $20 trillion is B2B payments.
  • The acquiring industry will focus on areas that traditionally have never taken cards, such as healthcare, rent, non-profits, B2B, etc.

acquiring industryThe ETA TRANSACT conference is typically in April or May and usually at the Mandalay Bay Resort in Las Vegas. I suggest you regularly review the ETA website and keep informed of what they are doing, or become a member yourself.

In closing, it is worth noting the exact words of a pronouncement by a senior ETA executive, delivered breathlessly last year: “Cash and checks are going away — and pretty quickly too!” Of course, this turned out to be a preposterous claim.

Coin and currency in circulation has been growing, not declining, the last few years. Hard currency as a percentage of the U.S. GDP is now 8.6%, the highest since the early fifties. A study by the Federal Reserve Board of San Francisco found that cash is the most frequently used payment method, followed by debit cards, at point of sale. Furthermore, a recent study by the Federal Reserve found that while consumer based check-writing has declined annually for the last 10 years (replaced mostly by debit card and recurring ACH debit), B2B payments are all still check based and are not declining, and may even increase in the near future.

And while consumers will write fewer paper checks, they will still use their Demand Deposit Account as the nexus of all payments and many consumers will use it as their default payment that we can use via ACH or digital check without a paper check. So let’s be careful about predictions in a fast changing payments world, and if you need advice about how to process payments in your business, please download our free guide or contact us here at CrossCheck!

Accepting Payments 101 Insider's Guide

Topics: Brandes Elitch, Events / Conferences, Independent Sales Organization (ISO)

Written by Brandes Elitch

Brandes Elitch is Director of Partner Acquisition for CrossCheck Inc. A certified cash manager and accredited ACH professional, he garnered a Master of Business Administration from New York University and a Juris Doctor from Santa Clara University.