by: Bret Morrison - posted (or last updated): 8th, January 2009

Global merchant accounts are all about politics of regional control and financial turf warfare. The VISA association has been divided into VISA USA and VISA International, all association members being banks for their local region. VISA association members comprise of 22,000 worldwide banks and financial institutions.

Visa International is divided into six regional operating organizations but VISA USA is responsible for member institutions for USA only and not other regions or cross border involvements. Hence this division of turf monopoly has caused many of the inconsistencies and high fees that we see in the industry since there is no competition between regions. The USA has the most expensive fee structure for credit card processing and merchant accounts in the world, in some cases nearly double and with Australia the lowest.

Visa Europe coordinate the requirements of all 26 member EC countries and as a result has more regulations that facilitate free trade throughout Europe and hence more competition and lower prices. As a result European banks have been somewhat of innovators in the last decade and quire successful in Europe by developing and promoting chip-card based infrastructure and the implementation of multi-application smart cards. Their technology and infrastructure is years ahead of USA.

There are also many new services being offered for global merchant account services such as international gambling (which USA is incapable of offering to businesses at the moment - partly in order to protect the Las Vegas and Atlanta gambling casinos). Many applications are now being designed and developed using global services that simply is not being offered in USA.

Also, the Europeans and Japanese are developing very smart systems for "Electronic Fund Transfer Point of Sale Terminals". These devices use smart processes by which payment card data and transaction value is captured by a merchant and submitted to any acquiring bank who separates the credit and debit parts of the transaction, arranging for the appropriate value to be passed to the merchant’s bank account anywhere in the world within 24 hours, in any currency.

The American Congress is somewhat to blame for this also because of the so call "Patriot Act", which is little to do with protecting US interests and US nationals and more to do with big brother overlooking everything that American people and businesses do, including what they do with their money. Transferring money to other countries has become more and more complicated and costly, with more obstacles than ever before. This protectionist view has made USA more vulnerable to financial collapse and less secure as had been promised.

Also see Offshore Merchant Accounts.

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