Information is power that could be used to gain profit. If you cannot get the information you need from a business partner, one option to take is to threaten it by increasing the fee you charge for your services. It short, try to flex your muscle a bit and see if they blink.
It seems that this is the strategy that MasterCard is trying to adopt when it recently announced plans to raise prices on intermediated payment processors (i.e. digital wallets) that chose to withhold valuable transaction details from them. They are not directly naming the payment processors, but it is more likely aimed at eBay's PayPal and Google Wallet because these two companies do not share transaction details with their payment processor.
Both PayPal and Wallet will probably be not affected much by this announcement since they can always charge it forward to their clients, but the announcement highlights the importance information and data to payment companies. The more transactional data MasterCard and VISA can get its hands on, the more insight they have on consumer behavior.
In an age where marketers are working to better connect the advertising world with the world of commerce, transactional data becomes the equivalent of marketing gold. Considering that PayPal conducted nearly US$ 145 billion in transactions last year, it's not surprising to learn that MasterCard's fee will increase eBay’s online transactions between US$ 0.03 to US$ 0.04 per share for the year. Should VISA follow suit, eBay investors can expect its earnings to be affected by another US$ 0.07 to US$ 0.08 for the year.
At this time, representative from VISA has not released any statement yet to implement the same fee hike that MasterCard will be implementing on June 2013, but unofficial sources were quoted as saying that any kind of fee hike is deemed "appropriate." Hence, is MasterCard's fee increase make it past regulators without any hiccups, it is likely just a matter of time until VISA follows suit.
It seems that this is the strategy that MasterCard is trying to adopt when it recently announced plans to raise prices on intermediated payment processors (i.e. digital wallets) that chose to withhold valuable transaction details from them. They are not directly naming the payment processors, but it is more likely aimed at eBay's PayPal and Google Wallet because these two companies do not share transaction details with their payment processor.
Both PayPal and Wallet will probably be not affected much by this announcement since they can always charge it forward to their clients, but the announcement highlights the importance information and data to payment companies. The more transactional data MasterCard and VISA can get its hands on, the more insight they have on consumer behavior.
In an age where marketers are working to better connect the advertising world with the world of commerce, transactional data becomes the equivalent of marketing gold. Considering that PayPal conducted nearly US$ 145 billion in transactions last year, it's not surprising to learn that MasterCard's fee will increase eBay’s online transactions between US$ 0.03 to US$ 0.04 per share for the year. Should VISA follow suit, eBay investors can expect its earnings to be affected by another US$ 0.07 to US$ 0.08 for the year.
At this time, representative from VISA has not released any statement yet to implement the same fee hike that MasterCard will be implementing on June 2013, but unofficial sources were quoted as saying that any kind of fee hike is deemed "appropriate." Hence, is MasterCard's fee increase make it past regulators without any hiccups, it is likely just a matter of time until VISA follows suit.
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