Merchant Services Affected by Financial Crisis
Credit Card Debt
With the financial crisis, according to Fox News, American’s total credit card debt has reached 1 Trillion– up 6 percent from a year ago and the highest ever recorded. This may sound like good news for the Acquirer industry but it may have a bad spiral effect. Some may speculate that our financial situation started with real estate developers and individuals flipping houses. Perhaps it was our poor lending guidelines? When I heard that the House voted against the government financial bailout I realized it was only a matter of time before our nation’s financial situation affected the payment processing industry.
As more and more financial institutions struggle and the unemployment rate begin to increase, issuers are going to begin offering less credit to card holders. This means that less people are going to have the ability to make purchases. Many business owners will be impacted by less spending.
Some options many merchants are turning to are:
- Bill Me Later, which allows shoppers to buy items without having to use a credit card.
- PayByCash allows a variety of different payment methods that can be used in multiple countries.
- CashU is widely used on Internet purchases. This system allows you to add credits to your cashU account using refill coupons and then use those credits on its network of affiliated merchants to make your payments.
Of course, in this current financial crisis, retailers should be on the lookout for more fraud. Many furniture stores and other types of businesses that normally require some type of financing are still extending credit. So we are not drowning yet. My opinion is that most people will continue to use credit cards – it’s human nature.
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