Credit card processing began around 1950.1 That was 70 years ago, and since then, the popularity of paying with plastic has risen consistently. With that rise has come the growth of processing companies across the US.
These days, new processing startups pop up every year. Competition for processing clients is fierce, but there are a few older companies still holding on to the bulk of processing clients.
Credit card processing is the end of the line for securing payment from customers. After they have made a credit card payment in your store, there are a lot behind the scenes processes to ensure you get your money.
It starts when a customer applies—and is approved—for a credit or debit card from an issuing bank. With those funds, they make a purchase at your business. Sometimes you will need a payment gateway to link the transaction to the payment process, other times the two are already linked.
The payment processor is the final step. They handle the transactions and move them through processing, allowing you to receive money from the customer. The processor does a lot of important work, which is why you want to make sure you’re working with one that values your business.
It’s interesting to note that every company on that list is 20+ years old. Even Global, the youngest of the bunch, was founded by a much older parent company—The National Data Corporation, which was founded in 1967.
Time definitely has a profound impact on the success of a processing company. But with so many old-school players filling the roster, what does the future of more modern competitors look like? We’ll get into that later.
First, we found another interesting data set. Traditionally, Visa and Mastercard have been the two most influential providers of credit cards. But many competitors like American Express have made a splash. This next set of data focuses on these secondary card providers—American Express, Discover, Diners Club, UnionPay, and JCB credit card purchases. These are the companies with the highest combined transaction volume from these secondary card providers.
As you can see, many of the same names from the previous table pop up on this list. It seems the older processors have something of a dynasty in the processing space. But that dynasty could be disrupted.