Simpler Smarter Savings

There have been recent changes in the merchant services industry, and most of this is focused on credit card processing. These changes will continue in the future in what has now become a rapidly changing industry. Many of these changes are due to changes in consumer behavior, while others are due to increased competition for merchant accounts among traditional banks as well as aggregate payment processing companies.

1. Changing laws

Lawmakers are beginning to see the changing landscape of competition in payment processing and are beginning to deregulate in ways that are helping the market become more competitive.

2. Shorter contracts

This is one way merchants have been stuck paying too much for their merchant accounts. Long-term contracts lock in high fees, and a business owner is stuck paying more than he would have to pay without the long-term contract. Banks are now less able to entice a business owner into a long-term contract when shorter contracts are available.

3. Lower fees

With more choices available to the business owner, the merchant services industry has become more competitive and this is leading to lower transaction fees. It is the transaction fee that has been one of the largest obstacles for a small or medium size company taking credit cards as payment. Many merchant accounts have simply been too expensive.

4. Mobile credit card processing

This is a new frontier for many business owners. Today, business owners have access to the Internet with a mobile device such as a tablet or a smartphones. There are now merchant account providers that have simple hardware that attaches to a smartphone, and integrated with an app, this allows the business owner to process a credit card wherever they are doing business.

5. The new digital wallets

Because of the rapid increase in consumers using smartphones, there has been a rapid growth in what is known as digital wallet payments. These are ways that allow a person to pay for a product right over their smartphone using an account that is not traditionally a credit card. The competition for the consumer buying products and services with a smartphone is driving down the cost of payment transactions for merchants everywhere.


The future is uncertain, but to be sure, the expense of processing credit and debit cards will drop for both small and medium sized merchants. Consumers will benefit as well. In this increasingly mobile world, they will have the opportunity to use digital payment methods in more places than ever before.