The Players in the Payment Processing Space in Canada
Years ago, when setting up a merchant account for your business, you were somewhat limited in your choice of Acquirers. In fact, Acquirers only became a house hold name a little over a decade ago. Before then, who you chose to do your payment processing with was largely limited to who you were banking with. Before the year 2000, each of the major financial institutions was set up to provide one payment card brand, either MasterCard or Visa. So for example, if you banked with the Royal Bank, you would set up a Visa merchant account with them to accept Visa transactions but you would then need to go to another bank that did MasterCard processing and set up a separate MasterCard merchant account with them. Often that would result in another bank account with that financial institution and inevitably, time spent reconciling and maintaining two business bank accounts, not to mention paying additional banking fees.
Fast forward more than a decade and things in the Canadian payment processing landscape has changed drastically. Banks have either sold off their merchant account portfolios or have formed subsidiaries that specialize in just merchant payment processing. But to help you navigate through the option, here is an outline of the some of the biggest players in the industry.
Moneris Solutions
The largest of the payment processors, they were the first in the space to specialize in merchant accounts. Formed in 2000 from a joint venture from the two largest banks in Canada, The Royal Bank of Canada and Bank of Montreal, Moneris Solutions took the Visa portfolio from RBC and the MasterCard portfolio of BMO and immediately because Canada’s first and largest payment processing company. They’ve been able to maintain their market share over the course of the last 10 years all the while continuing to innovate with new and unique solutions. With proprietary products such as their ecommerce product, E-Select Plus, Moneris continues to provide their customers with options that grow with them as their business expand and change to the needs of their own customers. However, being the largest also means that sometimes the smaller merchants may not get the attention they need.
Global Payments Canada
Global Payments is an international organization that has offered merchant processing for many years. Their entry into the Canadian marketplace originated with an agreement with CIBC and the National Bank. By this virtue, it automatically made them the second largest processor in the country. Global Payments maintains a large portfolio of partnerships with Independant Sales Organizations (ISO’s) and as such, continues to grow their transactional volumes year over year.
Chase Paymentech
Paymentech originally entered the Canadian marketplace by purchasing the portfolios of ScotiaBank and Citibank. A smaller player in Canada originally, Paymentech has been able to grow significantly over the course of the last 8 years by winning strategic Canadian accounts (like our favourite coffee shop, Tim Hortons). A merger with JP Morgan Chase would change the company’s name to Chase Paymentech in 2008. Although it’s Canadian office is operated independently with it’s own executive team, much of the direction and policies are based out of their US parent, JP Morgan Chase.
TD Merchant Services
For a long time, TD Merchant Services resisted the trend to partner with a MasterCard organization to offer merchant services. Instead, they focused on Visa relationships with a referral program in place to our next company, First Data Merchant Services. Although one of the smallest of the big players, TDMS maintains strong strategic relationships with large Canadian merchants. In 2009, TDMS severed their relationship with FDMS and went on to provide both Visa and MasterCard processing to merchants within their portfolio. TDMS continues to grow strongly in the Canadian marketplace with their commitment to be transparent and merchant friendly.
First Data Merchant Services
First Data is arguably one of the largest merchant processors in the world with a large range of products and services spanning over all sectors. However, in Canada, they are still one of the smaller ones. After the severance of their relationship with TDMS, First Data struggled a bit with product availability for their customers. However, by being a small fish in a big pond, it affords them the opportunity to go nowhere but up.
Desjardins Merchant Services
While all the other players have their head offices based in Toronto, Ontario, Desjardins is based out of Montreal. Infact, unless you live in the province of Quebec, it is unlikely that you would’ve heard of Desjardins, let alone consider them as a potential processor. They cater to the Quebec market and has a stronghold on the majority of the Quebec merchants. Although they are able to process for merchants across the country, their presence and their focus remains on their Quebec clients.
Alongside of these big players, you will find a plethora of smaller Independent sales organizations known as ISO’s. Some of the larger ISO’s are Open Solutions and CT Payments. What’s important to know about them is that although they are independent organizations run with their own executive teams, it is likely that they have an technical arrangements in place with one of the larger processor to use their processing gateway to send through the transactions.
Choosing an acquirer, it’s clear that there are several things to take into consideration. How big is the Acquirer and how far is their reach? If you’re located in a rural area, is the Acquirer you choose large enough with service coverage in your area? Or will you be waiting 4 days before you get a replacement terminal? How innovative is the Acquirer. As your online business grows, will your Acquirer have the ecommerce products and services needed to ensure that your needs are met. Don’t be afraid to speak to your peers. When making a decision like this, a referral from another business can sometimes make all the difference. Talk to your neighbour about the Acquirer they use… have they had any issues getting a technician on site? What about the helpdesk? These types of testimonials are invaluable as they can help set your expectations. And… go with your instinct. If you don’t like the sales rep or something sounds too good to be true, walk away… there are plenty of other Acquirers out there who are waiting to earn your business.
