Kudos to FDC

Unaccustomed as I am to being positive about a lot of things related to our business, I find myself compelled to give credit where credit is due (no banking related pun intended). The recently announced merchant processing relationship between FDC and Bank of America represents a solid win for FDC. Any serious analysis of FDC’s long term prospects following the de-coupling with Chase resulted in questions concerning long term viability. It appeared to many industry observers that the remaining revenue streams from the many and varied FDC business lines were just not strong enough to sustain the entire organization over the long haul. A collapsed economy certainly did not help FDC’s prospects either.

With this announcement, FDC has managed to pull a huge and profitable rabbit out of its hat. The entire industry has long been aware of Bank of America’s struggle to compete effectively in the merchant services arena. Given its huge branch network, B of A seemed destined to become THE dominant player in the industry. But the potential energy was never converted to kinetic. B of A’s abhorrence of interaction with the ISO community, combined with its apparent lack of any recognition of the inherent value of a merchant relationship resulted in no coherent merchant services strategy. If there is one thing FDC can bring to a party it is a thorough understanding of the value of a merchant service relationship, combined with a deep appreciation of the ability of an ISO to close business.

Another strength FDC brings to the table is its ability to recognize an easy mark when it sees one, and its absolute commitment to take full advantage of an opportunity when one presents itself. And B of A certainly fits the profile of an easy mark – lots of money, lots of merchants, lots of potential to access more and no discernible talent in the merchant services marketplace. A marriage made in heaven. The marketplace can certainly anticipate a lot more heavy competition in the future as this relationship reaches fruition. Congratulations to FDC on a well earned win.

Paul Martaus