A Way Forward?

This month we present the 10th edition of our annual 10 Most Pressing Issues in E-Payments. We’re sure you’ll find this interesting, if somewhat unsettling, reading, and no doubt you can think of a few issues that aren’t in the current ranking.

So can we. In fact, we can think of some that are practically perennial problems. For instance, lurking in the background is one big issue that has long haunted the payments business. It’s the matter of how much merchants pay to accept credit and debit cards, an issue that has seemingly launched a thousand lawsuits over the years.

In fact, one such suit is back in the federal district court in Brooklyn now that an appeals court has overturned a settlement reached four years ago between the litigants—the brand-name card networks and some money-center banks on the one hand, and merchants on the other. Just when everybody thought the case was over, it’s back on the docket—and it ranks seventh on our hit parade of industry issues.

That’s the way this acceptance-cost issue seems to proceed. It simmers year to year, and explodes every so often in an access of fury. It also spawns subsidiary disputes, some of them quite bitter, like the one over transaction routing.

All of which has caused quite a bit of bad blood between the two sides, and that is now what confronts the new boss at Visa Inc., Alfred Kelly. The former American Express Co. president is set to take over Dec. 1 from Charlie Scharf, who announced his resignation last month after four years at the helm.

What might interest merchants is that some of Kelly’s first remarks after being named Scharf’s successor were conciliatory toward them. “We will absolutely view the merchant world as extraordinarily important and we will be very, very focused on making sure that we’re an excellent partner to big and small and medium-size merchants around the globe,” Kelly said.

Is this a sliver of hope that a way forward, a compromise, might be found? You might think so, but be careful. Kelly isn’t the first Visa boss-designate to talk like this. Scharf himself made nice to merchants when he took over, and way back in 2005, when John Philip Coghlan began a brief reign as CEO, we reported that he “told reporters and analysts he once ran a retail operation and would like to sit down with merchants, who have complained bitterly in recent years about the rising cost of interchange.”

Little came of the best intentions of Coghlan and Scharf. Will it be different with Kelly?

— John Stewart, Editor  |  john@digitaltransactions.net