Payments Strategic Sourcing
In April, FIS announced its acquisition of the Issuer Solutions Business of Global Payments in conjunction with the sale of the Worldpay merchant acquiring business to Global Payments. As currently structured, the FIS acquisition of TSYS requires the simultaneous closing of Global Payments / Worldpay with both deals predicated on relatively standard closing conditions being…
The acquisition of Discover by Capital One will certainly strengthen the Discover network relative to MasterCard and Visa. However, the acquisition will likely not move the needle in any material way as payments industry volume remains heavily concentrated among the largest U.S. banks who compete directly with Capital One. The risk to MasterCard and Visa…
McGovern Smith has tracked processor operating costs over the past 15 years and recently updated its Processor Cost Index for 2024. The index measures the per transaction decline in operating costs across an index of card processors and provides a relevant fact-base to card issuers as they approach contract renewal or competitive selection processes. Since…
McGovern Smith updated its Processor Cost Index1 for 2023 and the results show that processor operating costs per transaction fell by 5.1%. This is the second straight year that processor operating costs per transaction fell by a healthy amount and were not otherwise influenced by Covid-19. While every processor has its own unique situation or…
McGovern Smith Advisors has analyzed the proposed cap on the base component of debit card interchange and by all appearances the Federal Reserve staff responsible for analyzing the data and recommending interchange do not appear to be honest brokers in the matter. The following is our view on potential dramatic changes to the largest component…
McGovern Smith’s analysis of covered U.S. issuers (i.e., those financial institutions with over $100 billion in assets under the proposed act) and the network fees tied to their credit card volume suggests a pending storm for exempt and some covered financial institutions. While credit interchange declines get the headline (and deservedly so after debit and…
The payments industry has seen dramatic changes over the past few years with industry consolidation and the Covid-19 pandemic. However, after the dust has settled, card processor operating costs (on a per transaction basis) continue to decline highlighting the inherent scale in card issuer processing businesses. And so long as credit and debit card processing…