The U.S. Merchant Acquiring Industry in 2012:
Embracing Disruption

New research from Mercator Advisory Group updates merchant
acquiring research for the U.S. market

Boston, MA — Now in its sixth iteration, Mercator Advisory Group’s annual report on the U.S. merchant acquiring market, The U.S. Merchant Acquiring Industry in 2012: Embracing Disruption, discusses market performance of the largest U.S. acquirers and counterparty risk as well as emerging issues in the acquiring space, indicating that the industry is on the cusp of dramatic change. Shifting costs for payment processing are again at the forefront of the discussion, as are changing laws regarding nonbanks in the payments space, the role of acquirers in ensuring payment data is secure, and the implementation of new payments technologies in the largest national market in the world.


This year’s report examines the performance of top tier merchant acquirers and provides commentary on a few salient themes impacting the industry. New this year is analysis of the acquiring market pertaining to the relative shares of merchant acquiring operations along with the division of the space by acquirer processor and by acquiring bank.

This report discusses counterparty risk in merchant acquiring and points to a recent example of an ISO overcome by risk exposure. It also examines the chain of liability linking different entities in the acquiring value chain, players that could be involved, and the threats posed to each party in the event of the industry’s equivalent of a natural disaster.

The U.S. merchant acquiring market, while concentrated heavily in the top tier of players, is actually quite diverse when it comes to the opportunities for firms of various kinds to share in the overall industry,” David Fish, senior analyst in Mercator Advisory Group’s Credit Advisory Service and author of the report comments.

“The traditional view of the acquiring space (a perspective that Mercator has encouraged the industry to expand) is that the term “acquirer” refers to the bank member of the card networks that either owns or sponsors the processing of card transactions into those networks, and thus holds the risk associated with those transactions. In reality, the acquiring bank passes liability for merchant card transactions downstream to partner intermediaries and is only one of four types of entities that could potentially own merchant contracts and risk liability that those contracts will go bad.”

Highlights of this report include:

Market share analysis for the top 10 U.S. merchant acquirers, the top 8 acquirer processors, and the top 13 acquiring banks

Discussion of the issue of counterparty risk in merchant acquiring

Detailed analysis of new card network processing fees

Review of emerging industry issues regarding interchange regulation, merchant litigation, data security, and the implementation of EMV in the U.S.

Commentary on a new law in Georgia that grants a special purpose banking license to qualified non-bank merchant acquirers.


One of 12 exhibits in this report:


This report is 23 pages long and has 12 exhibits.

Companies mentioned in this report include: American Express; Banc of America Merchant Services; BMO Harris; Citibank; Discover Financial Services; EVO Merchant Services; Fifth Third Bank; First Data; First National Bank of Omaha; Global Payments, Inc.; Heartland Payment Systems; HSBC; Intuit Payment Solutions; JetPay; JPMorgan Chase / Chase Paymentech; Key Bancorp / Key Merchant Services; MasterCard; Mercury Payment Systems; Merrick Bank; Moneris; PNC Merchant Services; RBS Citizens; RSA; Sovereign / Santander; SunTrust; Synovus; TransFirst; TSYS Merchant Solutions; USBancorp / Elavon; Vantiv; VeriFone; Visa Inc.; Voltage Security; Wells Fargo Merchant Services; and WorldPay.

Members of Mercator Advisory Group’s Credit Advisory Service have access to this report as well as the upcoming research for the year ahead, presentations, analyst access and other membership benefits.

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About Mercator Advisory Group
Mercator Advisory Group is the leading, independent research and advisory services firm exclusively focused on the payments and banking industries. We deliver pragmatic and timely research and advice designed to help our clients uncover the most lucrative opportunities to maximize revenue growth and contain costs. Our clients range from the world’s largest payment issuers, acquirers, processors, merchants and associations to leading technology providers and investors. Mercator Advisory Group is also the publisher of the online payments and banking news and information portal