A network fee introduced this year by Visa Inc. hands so-called merchant aggregators like PayPal Inc. an unfair cost advantage relative to traditional acquirers and independent sales organizations, a top executive with one leading ISO contends.

In any case, the apparent pricing advantage for aggregators may well prove short-lived. “I think you’ll see a closing of the gap over the next several quarters,” says Todd Ablowitz, chief executive of Double Diamond Consulting Group in Centennial, Colo. He argues the FANF was intended to encourage mobile payments through micro-merchants that might otherwise have been uneconomical to sign, but that pricing advantage was never meant to be permanent.

Digital Transactions, June 26, 2012
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