Thursday, November 17, 2005
All In The Family: Chase Paymentech Solutions, North America's Largest Financial Transaction Processor (WayTooHigh.com)
If merchants were curious why the payment processing companies are deftly hushed on the multibillion dollar antitrust litigation against Visa, MasterCard and their member banks, WayTooHigh.com has an answer.
When a single company which handles the electronic payment processing for more than half of all Internet retailers and service providers remains silent on interchange price-fixing charges, we were curious. This consolidation within the payment processing sector should startle. But instead, silence.
And, here is why.
Last month, Paymentech announced that parent company's JPMorgan Chase & Co. and First Data Corp. have reached an agreement to integrate the companies' interests in merchant processing, Paymentech and Chase Merchant Services, and have formed Chase Paymentech Solutions, LLC, effective immediately.
Chase which co-owns Visa now owns Paytmentech too. With Chase Paymentech Solutions now as North America's largest financial transaction processor, the banks don't just have their hands in the largest pot, they own the entire kitchen!
Smart move. Especially as the banks face growing discontent from consumers and merchants. They will be forced to transform and cease their interchange fees, but watch for the possibility of then adding excessive charges on the processing side, which is now the other hand that wasn't already slapped.
During a recent interview, the co-editors of The Credit Card Interchange Report - WayTooHigh.com were asked how the airlines could possibly sue Visa and MasterCard over interchange fees when the banks helped bail them out? We explained that just like how our Ecommerce and retail business still partners with the leading banks and payment processing firms, we are also class representatives and lead plaintiffs in this antitrust litigation against them.
Just as many consumers and retailers still don't understand the depth of this $25 billion dollar annual pilfering and exactly how the voluminous structure of countless fees works, it is clear that the battle ground has widened to include not just the banks but also the processing companies.
Posted by Tales from the World of Photo Scanning at 6:07 PM