The bankcard process is essentially one of electronic communication,
moving funds from a merchant to the merchant’s bank account as well as
from the purchaser’s bank to the purchaser. Two separate organizations
presently provide this communication system: Visa International (and its
domestic subsidiary VISA USA) and MasterCard International. Visa began as a
division of Bank of America on the West Coast and its’ card, first issued in the
1950’s, was originally called BankAmeriCard”.
Both organizations set about signing member banks, both to issue cards and to enroll
merchants. At that time, a bank that offered one card could not handle the other. In
1977, both organizations agreed to the concept of “duality”, that is member banks
could now issue and honor both cards.
Visa and MasterCard have very specific rules and regulations that all of us, including
merchants must adhere to.
The initial issuance of bankcards to consumers was done without much forethought.
In the race to broaden their cardholder and merchant bases, banks would send out
unasked for cards to millions of people; many of them not considered creditworthy by
today’s standards. In addition, banks would sign up undesirable and unstable
merchants leading to staggering losses. While fraud losses are still high, steps are
continually being taken to contain losses and protect both customers and banks from
fraud. Most banks now find the cardholder or issuing side of the bankcard to be very
profitable.
Heavy competition on the acquiring side has made the merchant end of the bankcard
business somewhat less profitable and a number of banks no longer offer merchant
accounts. Primarily ISO relationships or Independent Sales Organizations who
dedicate their entire business model to servicing merchants now handle a majority of
the merchant business.

Amazon.com has announced that they will no longer use the ‘bill me later’ service. This news came after the formal announcement that the bill me later has been taken over by Ebay.

Amazon is also not using paypal as a option of payment, this is being considered as a good step as they are only offering a real merchant solution with charge back protection for merchants selling on Amazon.

Due to Googles tightening financial s Google Checkout has stopped the service where merchants who advertise on Google’s Ad words platform, have received credit for use toward Google Checkout fees they incur.

Google didn’t even notify current Google Checkout users prior to dumping the Adwords credit system in December. So all of the December Merchants using google check out for online holiday sales paid fees for the service.

NJ based credit card Processor Heartland payments has suffered data breach involving a reported loss of a lot of credit card numbers.  Heartland servers were infected by a malicious spy ware which helped the hackers to  the steal the important credit card information.

Heartland processes over 100 millions of transactions every month, However the actual loss has yet not been gauged. It has been reported that the data breach started as early as March 08.

http://www.nytimes.com/2009/01/21/technology/21breach.html?_r=1&emc=tnt&tntemail0=y

In an already crumbling economy this would come as a blow to the Credit Card Industry, and would again open the debates on the security of information which was triggered by largest data breach in the history involving TJX.