Flat-Fee Pricing on PIN Debit Hurts Acquirer Margins, Expert Says

(February 9, 2010) Americans now spend more than half a trillion dollars a year on PIN-debit cards, but the merchant-acquiring industry is still adjusting to consumers’ embrace of point-of-sale. At the same time, debit card pricing is shifting from a simple, flat-fee model to a more complex one, which is raising the stakes for acquirers as they try to make a profit in a rapidly changing environment.



Those are some of the conclusions in a new report from Mercator Advisory Service Inc. dubbed “The Economics of Debit Acquiring”. Drawing on primary research involving numerous acquirers as well as secondary sources, report author David Fish estimates PIN-debit dollar volume was $525 billion to $550 billion in 2008. That’s an impressive achievement for the surviving electronic funds transfer networks, which started out in the 1970s and early ‘80s doing nothing but switching ATM transactions.



Continue Reading at Digital Transaction News