Selecting a merchant accounts provider can be an intimidating task. This post discusses how to go about selecting a merchant account provider in Canada.
All of the major financial institutions, and most of the Credit Unions, either have a partner that they refer processing requests to, or they own a processing company. The result is most people today are in a credit card processing relationship with the company that their financial institution recommended.
As I discuss in a post on payment processing, not all offers are equal and it is important for merchants to understand how to read their statement and to actively look for competing offers.
Below is a brief description on the major Canadian merchant account options :
Moneris
The payment processing industry is one of partnership and Moneris is no exception. Moneris was created Royal Bank and BMO in 2000. They are the biggest player in Canada by volume which is no surprise considering they have two of the 5 largest institutions sending them business.
TD Merchant Services
TD Merchant Services is a joint offer between TD Bank and First Data Canada. TD is a Visa house and provides the Visa, terminal and debit while the MasterCard is provided by First Data. As such merchants receive two statements; one from TD and one from First Data. TD Merchant Services is the referral partner of the Canadian Chamber of Commerce and a lot of their business comes from local chambers. TD is also the second largest bank in Canada so once again it isn’t a surprise that TD Merchant Services is the second largest player in Canada.
First Data
First Data is the largest processor in North America. Most of First Data’s business in Canada, today, comes from their relationship with TD for the MasterCard a, a previous relationship with Chase Paymentech and one of their business units UNPS. UNPS is a referral partner for a few hundred credit unions in Canada. In April of 2009 First Data was the first company in Canada give the ability to process all three major cards direct; Visa, MaserCard and AMEX. They are now in the market selling direct to merchants under the First Data brand.
Chase Paymentech
In 2002 Paymentech purchased Scotia Bank and Citibank’s merchant portfolio. They also have a referral relationship with the Canadian Federation of Independent Business (CFIB) that represents a large portion of their business.
Global Payments
Global Payments has an allance with CIBC. Like all the processors above they are an international player. In Canada a lot of their business comes from their relationships with the restaurant industry and of course from CIBC business clients.
The Independent Sales Organizations (ISO)
There are a number of ISO’s in the Canadian market re-selling credit card processing. Typically they develop a product line (terminals) and a relationship with a major processor (First Data, Moneris etc) and go to market direct. They mainly target small business and often small business that does not have the credit hsitory required to work with a major processor. The ISO’s make their revenue off the sale of the terminal and a trailing revenue/revenue share with the processor. Some ISO’s have a a significant portfolio and others operate on a very small scale. For most merchants there are better processing options. Examples of Canadian ISO’s include Monex, Pivotal Payments and Collective POS.
Each processors price model is different - in some cases are drastically different - and it is important to understand which provider has the price and service model to match your business. Covering the strengths and weaknesses of each processor will come in later posts!
