Essay - Banking Industry - Merchant Services & Electronic Funds Transfer Services...

Banking Industry - Merchant Services & Electronic Funds Transfer Services

Environment Trends: Changes in the financial services sector came about in the late 20th century as a result of falling profits from plain vanilla consumer deposits and incre*****ed competition ***** investment banks and mutual funds for consumer savings (Hoover's Online). This led to ***** of all types and sizes adding to their list of customer services, with the aim of retaining assets, increasing customer loyalty ***** ***** highly profitable fee income. The expanding nature and role of banks was also facilitated by the Gramm-Leach-Bliley Act of 1999 which paved the way ***** a flurry ***** Mergers ***** Acquisitions leading to the creation of several behemoths such as Citigroup and J.P. Morgan Chase. The other factor that has dramatically transformed financial ***** is the exponential growth of Information Technology. These factors have ***** ***** to rapid development in ***** Services and Electronic ***** Transfer Services.

***** Analysis:

Geographical Markets: With the advent ***** globalization and ***** Internet, boundaries have increasingly got blurred. While geographical boundaries may still have relevance for card issuers, interchange fee revenues can stem from any part of the globe as consumer online spending increases. According ***** e-consultancy Jupiter Research, over the holiday season of 2000 shoppers spent $10.8 billion online. That's 54% more than ***** year before, ***** about 98% of transactions on the Internet are paid with credit *****s. ActivMedia estimates ***** online retail sales are a healthy $53 ***** ***** today's $3.1 trillion ***** industry in the U.S. with vendors reporting triple digit growth rates. The growth of online ***** implies that global players in Merchant ***** and EFT Services will be in a better position to reap the benefits of a ***** market.

***** Range and Services:

Merchant Services: Payment process*****g ***** Credit Cards; Personal Debit ***** Business Debit Cards; Charge Cards; Stored Value Cards ***** Smart cards.

EFT Services: ATM processing; debit card processing and debit network access for financial institutions. Products include ACH/EFT Electronic Payments: automatic receipt of ***** payments; ACH/EFT ***** Phone Checks: Accept check payments over the phone ***** processing through *****fline ACH network or online ATM *****; ACH/EFT/ATM Point-of-sale Check Conversions: Process any check payment just like a credit card ********** the high ***** card fees; ACH/EFT Direct deposit *****: ability to electronically pay vendors or deposit employee pay checks; Check Guarantee: For businesses with transient clientele or high dollar amount per check (redundant elsewhere ***** Electronic POS ***** Conversion); Check verification: reduces bad debt exposure; Pre-authorized *****: insures that all monthly ********** from paper bank drafts ***** received on time; Lockbox conversion through ACH/EFT: converts checks ***** in the mail to electronic checks elim*****ating trips to the bank along with ***** processing fees; NSF Collection Rec*****y: expedites funding of bounced checks; Internet Checks: accept check payments over the Internet providing cus*****mers ***** one ***** payment option.

Industry Size: The growing importance of Merchant Services and EFT services is reflected in ***** fact that there has been a six-fold