Sep 11, 2007

Finally, an ad about new ways to protect interchange!

This ad is going into the EFMA conference guide for a Paris event at which I’ll be speaking next Tuesday.

This is probably the first advertisement in the world that specifically addresses interchange protection through new, merchant-centric payment features. As far as I have seen, most other interchange related ads have focused on litigation and stressing the unjustness of merchant complaints. I expect that several years from now, lots of companies are going to be promoting features, products and services that also protect interchange. But for now, this may possibly be the very first advertisement of its kind. It seems clear and simple now, but it has taken several years to get the message into this format. And it can still be much more powerful.

In the past, Welcome has mostly worked with individual banks that use our software in a closed loop issuer-acquirer network that helps the bank enhance its relationships with both cardholders and merchants. In that environment, the value proposition and ROI are based on protecting the bank’s fees, recruiting cardholders and merchants faster and easier (and at lower cost) and encouraging usage.

Today, we are working more and more at the payment scheme level, helping to make payment brands more attractive to merchants. The value proposition and ROI now are based on protecting interchange fees, recruiting issuers and acquirers faster and easier (and at lower cost) and encouraging usage.

The positioning described in this ad is a quantum leap forward.

For a more complete understanding of where this all leads to, check out the presentation on what a new generation Maestro card would look like (see Making MasterCard’s Maestro the preferred debit brand in post-SEPA Europe).


John B. Frank said...

I don't envy your job. Defending Interchange is not unlike a lawyer defending a murder charge when he knows his client is guilty. Ask the thousands of gas station owners (no, I'm not one) who have seen their credit card fees jump exponentially just because the price per gallon has jumped.

I specifically use that example because, ironically, of all the verticals you could have chosen, your advertisement specifically addresses gas stations.

I recently posted on my blog how gas stations are being "killed" by higher fees. I've followed you blog on occasion, and I agree with a lot of your insights, but Good luck and on this journey.

Aneace Haddad said...

I guess I enjoy a challenge!

You are right to point out that we have focused on one of the toughest merchant segments, gas stations. It is a good test for the ideas in my blog. If what I have been saying can help in this segment, then it will work in lots of others. I will do a longer post on gas stations in particular, and why this is so useful and powerful for them, whether they are a large fuel corporation or an independent store.

Thanks for your comment.