Jul 9, 2007

Most read blog posts this year

The high response to some blog posts gives me a feel for the subjects that readers are most interested in. I started adjusting my thoughts in response to this feedback more than a year ago when I noticed that people responded much more when I wrote “from the gut” on topics like interchange. Those posts have always generated substantial interest, which has caused me to focus more and more on interchange as our industry’s hottest topic.

So far this year, six blog posts have attracted the largest number of readers. Here they are, starting with the most recent.

London contactless conference
As PaymentsNews puts it, my conference presentation takes a skeptical view of contactless payments that simply replace mag stripe functionality and suggests that “the real value is to also enable the card to interact with the merchant's POS to enable promotional marketing in addition to basic purchase functionality.”

Gartner: payment schemes need to offer merchants new promotional marketing capabilities at the POS to reduce pressure on interchange
View a recent Gartner report which suggests that banks need to introduce “payment information value added services” which reduce pressure on interchange by allowing merchants to deliver tailored promotions at the POS, printed at the bottom of credit and debit card receipts.

Will SEPA unleash the genie of spiraling interchange fees?
A strategic analysis which suggests that SEPA could cause interchange fees to increase, contrary to the common belief that more competition will cause fees to drop.

London Contactless Launch: Where Are The Merchants?
Why aren’t merchants excited about contactless? The benefits are not as irresistible as the tremendous hype would have us believe.

Priceless? The cost of credit card merchant restraints
The anomaly of credit card rewards, an issuer loyalty technique funded almost entirely through interchange fees. Merchants finance the issuer’s loyalty programme through higher interchange fees paid on premium and other rewards cards, yet get no additional benefit for accepting those cards.

Using the same old interchange pitch over and over again, yet hoping for different results
We’re going round and round in circles.

Here’s the mantra: “Merchants receive extraordinary benefits from accepting electronic payments, including increased sales, an expanded customer base and immediate, prompt payment for goods and services.”

But the pitch doesn’t work anymore. Merchants stopped buying it a long time ago. It's time to change it.


Triston said...

I know from my experience working with the Merchants Payment Coalition in the US that interchange is virtually unknown to consumers. The card issuers are making a killing yet the cost of processing has gone down.

Keep up the good work and please check out our website at UnfairCreditCardfees.com. We are expecting The House of Representatives to hold a hearing on July 19th on interchange fees.

Aneace Haddad said...

Javelin has done a survey which suggests that most people know about the fees and believe they affect prices, "but they won’t refrain from using plastic cards to lower a merchant’s costs, and don’t trust stores to share any reductions in interchange fees with them" (see the post here). I am not sure if people are aware of how much the fees represent though. Many people might think they are a small, fixed fee per transaction.