North American Divided While Europe Unites

Whilst Europe moves to unified banking platforms with SEPA, North America continues to have merchant account schemes that are unique to each country. For example, the US and Canada, which share the closest demographics between their populations, have completely different merchant banking environments .

The biggest difference between Canada and the US lies in the structure of the banking systems in each country.. In the US thousands of banks compete. There is little doubt that the largest banks dominate the merchant processing market. Yet, there are still many regional and local banks that offer merchant account services to businesses.

Although most of the smaller banks outsource the actual processing back office functions to the major banks, the actual sale of the accounts resides at the local level. The result is that the businesses can shop for rates among banks. Multiple banks offering essentially the same services create a highly competitive merchant account marketplace for banks and businesses.

Canadian merchant acquiring is controlled by a few banks. There is limited competition for merchants. The tight control the Canadian banks hold over the market make it almost impossible for any outside organization to penetrate the market.