Study on ways to preserve margins and reduce merchant attrition

The study, titled Merchant Acquiring: Leading Practices in Retention Management, has surveyed a cross-section of merchant service providers (ISOs and acquirers), that had collectively transacted USD 550 billion in bankcard sales for approximately 1 million merchants.

Key findings gleaned from the study have indicated that attrition concerns are growing exponentially. As many as 50% of the survey respondents have indicated that attrition rates had increased over the past 3 years. Respondents whose organizations had used proactive tactics to detect and manage merchant retention fared far better than those that used predominantly reactive tactics.

Further, the data has confirmed that a growing number of companies are focusing a significant portion of their budget dollars on signing new accounts. This may be due, in part, to the fact that it takes as many as 3 new accounts to overcome the diminished value of a single lost merchant. It was no surprise that many survey respondents felt finding thoughtful and effective methods to improve customer retention while preserving margins was, and would continue to be a top priority.

This report can benefit a number of cross-section of businesses and individuals including payment companies, merchant service providers and resellers, technology companies, consultants, investors, analysts, and private equity firms that cover the merchant acquiring industry.