(13 August 2009 – UK) One in five small to medium UK merchants will look to change their current acquirer during the next six months.This finding comes from East’s inaugural UK Merchant Acquiring and Cards Markets
analysis, based on direct interviews with 505 UK merchants turning over between
£2 and 50 million per year.
“Our report shows that on average these small to medium size merchants process
72 thousand card transactions each year. With the card processing costs in some
instances reaching up to 3.9 percent of net card turnover, the total fees paid
by merchants to their acquirers are significant,” said East & Partners’ UK
analyst Nick Dowling.
But despite the high volume of card transactions and the considerable net cost
of acquiring services, merchants’ service expectations are far from being fully
met.
“Terminal Support is the most important service issue to merchants out of 17
distinct service issues covered in East’s report and acquirers’ performance in
this area leaves a lot to be desired,” Mr Dowling commented.
“Fifty-three percent of £10 and 50 million turnover merchants and a staggering
81.6 percent of £2 and 5 million merchants have to wait 72 hours or more for
terminal failures to be corrected,” he said.
“This is clearly out of line with merchant expectations and is reflected in the
low satisfaction with Terminal Support market-wide.”
Other critical service issues identified by merchants include Quality and Speed
of Transaction Error Correction, Speed of Payment Settlements and Relationship
Management. This clearly suggests that merchants expect their providers to offer
a robust processing platform together with an effective service and support
model.
“The hunt for improved service and support is the main factor driving UK
merchants’ churn intentions,” Mr Dowling said.
“Ultimately, this means there are ample opportunities for acquirers to capture
new customers by focussing on service support and, in particular, those service
issues that merchants consider most important,” he concluded.
About East & Partners UK Merchant Acquiring and Cards Markets Report
East & Partners’ UK Merchant Acquiring and Cards Markets program is a
six-monthly research service which delivers accurate market intelligence on the
UK merchant acquiring and cards markets. The report provides a range of relevant
analytics including clear measures of card receivables breakdown, merchant
acquiring market share, satisfaction with acquirers and merchant churn. Each
biannual report is based on a structured sample of merchants reflecting the
actual distribution of merchants by industry and geographic location. The
merchant segments covered in this research program, based on annual turnover,
are:
| • | Corporate | £10–50 million turnover enterprises |
| • | SME | £5–10 million turnover enterprises |
| • | Micro Business | £2–5 million turnover enterprises |
For more information please contact East’s UK Analyst:
Nick Dowling
UK Analyst
East & Partners
m: +44 7900 398 082
e: nick.d@eastandpartners.com