The purpose for this blog is to promote ACH Debit or Decoupled Debit. It can be said that the reasons it is needed can only be articulated when you discuss the Topic of Interchange. The Interchange System business model runs contrary to normal Free Market Economics. In that the Card Brands Visa and MasterCard. Which were formerly Non Profit Corporations are now For Profit Corporations with Shareholders and Investors to make happy.
US Merchants pay twice as much as Canadians and three times as much as European Union merchants for a Debit or Credit Card transaction. The impact this is having is growing in severity to US Merchants. At a time when Merchants are facing severe financial pressures from declining revenues, increasing Taxes and Fees, and a tough credit market.
Visa's USA President recently disclosed the fact that nearly 70% of First Quarter US transactions were Debit. And that Debit volumes have exceeded Credit Card Volumes for the First time. With the Credit defaults hitting Card Portfolios hard. Advanta Financial announced they will be closing their Small Business Card Portfolio in June of this year.
Merchants need credit card and Interchange fee relief. Competition is the real answer to this need for a paradigm change. Alternative Payments offer Merchants and Consumers the first real hope for a change in the system.
Here is a recent artic le on the impact of Interchange fees. The passions that Merchants feel over this issue is not going away.
http://www.digitaltransactions.net/newsstory.cfm?newsid=2212
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