Stopping the Supertanker

Supertankers are amongst the largest ships in the world. They can exceed 1500 feet in length which is longer than the height of the Empire State building in New York City. One other amazing fact about a Supertanker is that it takes almost 20 minutes for a fully loaded vessel to stop when travelling at normal speed. The good news is that it can manage this stop in 14 minutes under emergency conditions. Whew! I am sure glad for that. A few weeks ago, I attended the WSAA conference in Fort Worth, Texas. It was a terrific event and very well attended. However, it struck me during this event, that our industry is a Supertanker struggling to stop.

As I entered the exhibit hall one could not help but notice that the vast majority of exhibitors, vendors, ISO’s, Processors etc. were B2C focused. There appeared to be countless vendors selling terminals and POS technology for the industry. Legions of ISO’s were focused on Agent recruitment for the B2C space and still other vendors were engaged in the usual B2C banter. The event organizers breakout sessions were further focused on B2C, discussing dated items like buy here, pay later. To be sure the B2C industry has been very good to many people in our industry for a really long time. Consumer Payments on Card in the US in 2018 exceeded $5 trillion. That is a lot of basis points no matter what way you add it up. But the Supertanker is becoming a little worn. Margins are down due to increased competition. We also sell a product to merchants that does not take them out of the market but puts them into it for our competitors to sell them the same product at a lower cost. In many cases the new seller even ends up making less. Long term as we have seen this just can’t be sustained.

As I walked the event hall, I could not get the image of the supertanker out of my head. The industry is struggling to find the next big step as B2C Payments have essentially capped themselves out. There are few untapped industry segments within B2C that are not plastic accessible. Therefore, if the pie is not getting any bigger in B2C. Why is there so much focus on it? For the most part it’s been easier to sell. When you have about 95% of the market for payments with cash being the only serious competitor, credit becomes king. As a B2C business you have to have it and there are many who can gladly sell it to you.