Banks have good reason to pursue a stake in acquiring payment cards.
The relationship of small and medium-sized merchants with their acquiring bank is much like the consumer banking dynamic or commercial banking retail banking.
That is, if a acquiring bank can participate in managing electronic merchant fund flows, it will reinforce the bank-client relationship.
Relationships with large retailers enable acquirers to amortise their cost structure across those larger volumes while continuing to offer competitive service to small merchants.
An acquiring relationship may also allow a bank to cross-sell other services to its merchant customers.
However, acquiring is increasingly the preserve of specialists that can combine scale with distribution.
In such circumstances, it is sensible for smaller regional or local banks to consider a partnership or alliance with an acquirer to meet the needs of its customers.
Smaller and larger banks may be natural clients of one another in such cases.
While larger banks that provide a full range of payment services will clearly remain as acquirers, the nature of their participation may change.
Even among the largest players, some form of partnership or alliance may be necessary to pursue the goal of international growth and cater to the needs of increasingly global retailers.