http://truthonthemarket.com/2009/12/09/the-cost-of-payments-interchange-issues-no-one-talks-about/ Academic commentary on law, business, economics and more Sat, 02 Jun 2012 12:17:14 +0000 hourly 1 http://wordpress.com/ http://truthonthemarket.com/2009/12/09/the-cost-of-payments-interchange-issues-no-one-talks-about/#comment-8005 Wed, 20 Jan 2010 20:35:20 +0000 http://www.truthonthemarket.com/?p=3221#comment-8005 [...] Van Dyke (who contributed to our interchange symposium) has an interesting post up today recounting a brief glimpse of life [...]

]]> http://truthonthemarket.com/2009/12/09/the-cost-of-payments-interchange-issues-no-one-talks-about/#comment-8004 Fri, 11 Dec 2009 15:43:13 +0000 http://www.truthonthemarket.com/?p=3221#comment-8004 Javelin Strategy & Research does provide information on all costs related to payments, ranging from transaction fees to fraud costs. We recently provided groundbreaking merchant and bank fraud research in a project sponsored by LexisNexis, and LexisNexis clients may be able to obtain that study through the vendor at no cost by checking directly with them. Because we are a commercial research provider that deploys actual statistically-valid studies through highly-experienced experts (yeah, I know…this shouldn’t be unusual but it is) we must charge for the research. But I’ll post a couple of general trends herein. Alt payments can substantially cut the cost of merchant payments, but one should not assume this will always be the case nor should one assume that lower-cost methods will be successful. Revolution money recently gave up their solo efforts after leading with a low-cost message for merchants, allowing online stores to cut the typical online transaction costs of a couple points down to perhaps half in many cases. And yet another recently alt-payments winner in BillMeLater (recently purchased by PayPal) actually generally charged *higher* interchange, because they offered consumer incentives to drive more shopping volume. Thus Javelin’s conclusion that the cost factor is easy to overvalue in merchants’ total ROI calculation. On the cost of fraud, the study which we recently released through LexisNexis shows that out of a dollar of fraud that occurs at the point of purchase, the ratio between which businesses bear the cost is split some 90/10 between merchants and banks.

]]> http://truthonthemarket.com/2009/12/09/the-cost-of-payments-interchange-issues-no-one-talks-about/#comment-8003 Wed, 09 Dec 2009 19:45:04 +0000 http://www.truthonthemarket.com/?p=3221#comment-8003 I have the same question about the research on who bears the “direct fraud cost.” Is it possible to access somewhere? And what, by the way, is meant by “direct fraud cost”?

]]> http://truthonthemarket.com/2009/12/09/the-cost-of-payments-interchange-issues-no-one-talks-about/#comment-8002 Wed, 09 Dec 2009 19:07:13 +0000 http://www.truthonthemarket.com/?p=3221#comment-8002 Jim:
Is Javelin’s research that you cite on the cost of alternative payment systems available, and if so, would you be willing to post links to it?

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