FINANCE

Heartland Payment Systems files suit against Mercury Payment Systems

BY Dan Berthiaume

Princeton, N.J. — Heartland Payment Systems has filed a federal lawsuit against Mercury Payment Systems, charging the company with false advertising, unfair competition, intentional interference with contractual relations, and intentional interference with prospective economic advantage. The suit, filed in U.S. District Court in the Northern District of California, San Francisco Division, alleges that Mercury is illegally competing against Heartland with deceptive trade practices.

Heartland contends that Mercury is effectively misleading merchant customers by deceptively hiding its excess profits in the interchange fees charged by credit card networks and their issuing banks, in violation of federal and state laws.

The suit seeks to stop Mercury’s alleged routine deceptive pricing practices to secure new retail customers and maintain their existing merchants. The suit also seeks to recover full value for each merchant and prospect Mercury has taken from Heartland by deceptively falsifying pass-through interchange costs and other illegal methods.

The complaint also alleges that Mercury imposes significant costs and barriers for changing providers, falsely informs merchants that they are the only processor that supports their point-of-sale card swiping equipment, and falsely represents their company in commercial advertising and promotions as guaranteeing the best rate, among other charges.

“Heartland has consistently advocated for fair, transparent and ethical credit, debit and prepaid card processing and billing procedures for small and mid-size businesses,” said Robert O. Carr, chairman and CEO of Heartland. “The deceptive pricing practice of falsely inflating pass-through interchange fees not only constitutes unfair and illegal competition, it also costs even the smallest of merchants hundreds, or sometimes even thousands of their hard-earned dollars each year without their awareness. Industry-wide, the cost of deceptive interchange practices runs into tens of millions of dollars, and has caused great harm to the reputation of the entire electronic payments industry.”

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MARKETING/SOCIAL MEDIA

Survey: Online retailers stress efficiency, promotions

BY Dan Berthiaume

Chicago — Shoppers seek out time-saving tools where both technology and innovation are embraced to better serve the consumer. According to the 16th annual Mystery Shopping Study from The E-tailing Group, efficiency most often accompanies search where retailers almost universally (89%) have in place navigational dropdowns for a quick read of the assortment, while 90% of those retailers embellish these locations with favorite products or pre-defined offers.

The keyword search box, heavily used by online shoppers, finds 70% of retailers incorporating type ahead features though unfortunately only 29% employ visual search to further aid shoppers. Once results are delivered, 45% optimize search results with badging that can include labeling such as "new," "free shipping" or "sale" to capture the shopper’s attention. As many shoppers like to scan for an overview, one-in-two retailers allow for the ability to view all products and 60% make a quick view available to gather essential details about a product.

Online retailers also stress efficiency. Shoppers took advantage of a promotion 74% of the time. Adoption of the successful flash sale mentality can be seen in the growth of limited-hour specials now found on 53% of the sites up from 47% in 2012. Given its mass appeal, free shipping saw interesting shifts in 2013 where retailers simplified their strategies starting with the 20% of retailers who offered free shipping on all products. Of the remaining 80% of retailers unable to extend that benefit, 71% offered conditional shipping up from 57% in 2012, while only 35% funded free shipping on certain products.

Other notable findings include:

• Video is embraced by 89% of retailers with product page level integration at 72%, though unexpectedly down from 79% in 2012.

• Reviews are a standard and present on 89% of the retail sites.

• General links to social networks are consistent though the composition now finds growth from Pinterest (70% versus 52%), YouTube (69% versus 62%) and Google+ (47% versus 22%).

The study, conducted during the fourth quarter of 2013, benchmarks 335 metrics on 100 e-commerce websites across 13 consumer product categories.

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FINANCE

Study: Mobile payments account for 19.5% of global transactions

BY CSA STAFF

Amsterdam, Netherlands — Mobile payments accounted for 19.5% of all transactions worldwide in December 2013, a growth of 55% year-over-year, up from 12.6% the previous December. The third Adyen Mobile Payments Index, covering the period September to December 2013, also shows that mobile transaction volume in retail has risen by a third, up to 23%.

In retail, transaction volume for tablets rose 15.9% and for smartphones grew 7.1%. Average retail transaction values for tablet purchases were $122; PC purchases $92 and smartphone purchases $90. The retail industry stands out in that it recorded a higher transaction volume for tablets than for smartphones (and the highest share of tablet transaction volume in any other vertical) and it recorded the largest average transaction value for tablets comparative to smartphones and PCs in its vertical. This suggests that the retail industry leads the way in improving the tablet user experience for e-commerce, where a key part of the picture is streamlining the payment process to encourage more conversions.

Apple remains the most popular platform for mobile payments. The iPad won the highest share of 2014 holiday shopping transactions, taking 41% of mobile transactions over the September to December period, and in second place was the iPhone, at 31.6%. Android smartphones proved more popular than Android tablets, capturing 20% of mobile transactions compared to 6.6%. Windows Mobile devices have made up a steady 0.6% of mobile transactions since June 2013. BlackBerry hardly figured in the last four months, taking just 0.2%, down from 0.3% in the previous four months.

Looking at smartphones as a category, Android looks to be steadily closing the gap on the iPhone’s lead. In April 2013, iPhone had a 68.5% share of mobile transactions, compared with 30.7% on Android. By August, it was 62.5% to 35.9%, and in December 2013, iPhone share stood at 60% and Android at 38.6%. This reflects the increasing number of Android devices available, and in particular the growing popularity of Samsung, which shipped more than 300 million devices in 2013 and whose sales accounted for one in three smartphones sold that year.

“Ease of payment is vital for merchants to keep up with the evolution of mobile devices and consumer behavior,” said Roelant Prins, chief commerce officer, Adyen. “Businesses are focusing on enhancing their payment interface over mobile channels to make it responsive, simple and clear for users. That’s why having access to data on transaction volume and value is highly useful for merchants looking to optimize the user experience across mobile channels. It’s fascinating to look at a trend like tablets emerging as the leading device for more expensive purchases, and using this knowledge strategically to increase conversion rates.”

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