{"id":24123,"date":"2025-05-13T06:08:29","date_gmt":"2025-05-13T11:08:29","guid":{"rendered":"https:\/\/reformingretail.com\/?p=24123"},"modified":"2025-05-13T11:12:01","modified_gmt":"2025-05-13T16:12:01","slug":"heartland-gapes-merchant-12-4-and-legacy-payments-have-reached-humanitarian-crisis","status":"publish","type":"post","link":"https:\/\/reformingretail.com\/index.php\/2025\/05\/13\/heartland-gapes-merchant-12-4-and-legacy-payments-have-reached-humanitarian-crisis\/","title":{"rendered":"Heartland Gapes Merchant 12.4%, And Legacy Payments Have Reached Humanitarian Crisis"},"content":{"rendered":"\n

A lot of readers don’t believe that legacy payments processing is as bad as we make it out to be.<\/p>\n\n\n\n

“Maaaaan, there’s no way that legacy processors are giant fraud-mobiles increasing the cost of living by over 3%.”<\/p>\n\n\n\n

Okay, sure.<\/p>\n\n\n\n

Live in your dreamworld.<\/p>\n\n\n\n

Pretend that you can’t enrich yourself so<\/em> much<\/em> on the backs of mom-and-pop merchants that you’ll never afford rockets or flights to space.<\/p>\n\n\n\n

For those of us who are willing to acknowledge that we’re not asleep, we know the reality.<\/p>\n\n\n\n

Legacy payments processing is a plague on humanity.<\/strong><\/h4>\n\n\n\n

This isn’t even a pejorative.<\/p>\n\n\n\n

This is the truth.<\/p>\n\n\n\n

Fiserv, Global, Worldpay, Shift4: these guys are attriting merchants at insane rates as software companies embed payments.<\/p>\n\n\n\n

Today it’s estimated that ~25% of softwares embed payments, growing at mid-teens rates. By 2030, 80% of softwares will embed payments.<\/p>\n\n\n\n

From our friends at Bain<\/a>:<\/p>\n\n\n\n

\n

ISVs with integrated payments have been taking share in merchant acquiring, or the acceptance and settlement of credit card payments on behalf of businesses. ISVs accounted for one-sixth of 2020 US merchant acquiring payment volume, and that figure is growing at a mid-teens percentage rate. The \u201cbetter together\u201d value proposition, it seems, is delighting merchants.<\/p>\n<\/blockquote>\n\n\n\n

How do you think this is working out for all the legacy processors who can’t spell API, let alone R&D?<\/p>\n\n\n\n

Think there’s a reason Stripe and Adyen are growing organically?<\/p>\n\n\n\n

Surely it’s just coincidence.<\/em><\/p>\n\n\n\n

So the legacy bruisers buy smaller software companies where they can<\/em> and do<\/em> crank the rates.<\/p>\n\n\n\n

But if they can’t?<\/p>\n\n\n\n

They bleed existing merchants at such a rate that it’s a crisis.<\/h4>\n\n\n\n

Truly.<\/p>\n\n\n\n

Yes, these people are all going to hell in the next life.<\/p>\n\n\n\n

But in this life?<\/p>\n\n\n\n

They’ve been immune.<\/p>\n\n\n\n

Even lauded.<\/p>\n\n\n\n

Elected to federal departments while ruining the lives of tens of thousands – if not literal millions – of hardworking Americans.<\/p>\n\n\n\n

Why?<\/p>\n\n\n\n

Well first, we believe because they can<\/em>.<\/p>\n\n\n\n

It’s a high: legacy payments providers relish in the fact that they screwed a customer so hard that they celebrate by buying cars, yachts, or fighter jets<\/a>.<\/p>\n\n\n\n

It’s the thrill of the deal, just like legacy payment bros have a penchant for high stakes activities like gambling<\/a>, and then screwing over the casinos for the thrill of the adventure.<\/p>\n\n\n\n

They can’t help themselves.<\/p>\n\n\n\n

Secondly, it’s because SMBs are unsophisticated about payments.<\/p>\n\n\n\n

It’s not their fault. <\/p>\n\n\n\n

At least, not entirely.<\/p>\n\n\n\n

The payments ecosystem was built to create ambiguity. <\/p>\n\n\n\n

Because it’s hard to steal when things are transparent. <\/p>\n\n\n\n

Payments is simple: move money from A to B.<\/p>\n\n\n\n

So simple that it’s free in many countries (see UPI<\/a> in India, or PIX<\/a> in Brazil).<\/p>\n\n\n\n

But the US is still the king of free markets.<\/p>\n\n\n\n

Which is awesome.<\/p>\n\n\n\n

But.<\/p>\n\n\n\n

It also comes with seedy, morally-corrupt practices that, so long as they’re creatively schemed with an attorney, are totally legal.<\/p>\n\n\n\n

Even if they are entirely repugnant.<\/p>\n\n\n\n

Enter legacy payments<\/strong><\/p>\n\n\n\n

Here’s a flow chart for how absurd the merchant contracting process is.<\/p>\n\n\n\n

\"\"<\/figure>\n\n\n\n

Legacy payment bros know exactly<\/em> how they’re going to make money on the merchant before they even extend the merchant the contract, meaning that the entire process is premeditated<\/strong>.<\/p>\n\n\n\n

The contract is just the necessary formality that gives the payment bro full immunity to completely eviscerate the merchant.<\/p>\n\n\n\n

Gut the business from the inside out and the merchant can’t do anything because, “they signed the contract.”<\/p>\n\n\n\n

Let us give you an example to show how absurd this is.<\/p>\n\n\n\n

Following the payment bro contracting process, you convince a family man to sign a contract because you’re going to provide him X.<\/p>\n\n\n\n

The next day you come over and have forceable intercourse with his wife, kids, and pets.<\/p>\n\n\n\n

The man screams about the illegality – not to mention the morality – and tries to litigate.<\/p>\n\n\n\n

But a review of your daisy-chain contract shows that the man waived all claims and rights to everything he holds dear.<\/p>\n\n\n\n

Perfectly legal.<\/p>\n\n\n\n

The US legal system just says, “Proceed to the neighbor’s house at your convenience, sir.”<\/p>\n\n\n\n

Now here’s the real-life proof to you daydreamers.<\/strong><\/h4>\n\n\n\n

Carlos has been running a successful Caribbean restaurant in New York for the last ten years.<\/p>\n\n\n\n

Eight years ago he had installed Heartland Restaurant POS via a Heartland sales rep. <\/p>\n\n\n\n

He recently realized he had been out of contract for several years, and Heartland was significantly raising his rates. <\/p>\n\n\n\n

How did he make this discovery?<\/p>\n\n\n\n

Well, because even though he was still toiling 80 hours a week, and even though his top line revenue was growing, his profits had disappeared.<\/p>\n\n\n\n

Carlos got help.<\/p>\n\n\n\n

He reached out to a local POS supplier that walked Carlos through the math.<\/p>\n\n\n\n

\n

Carlos was near tears when he realized his\u00a0predatory processor was stealing all of his profits. He felt he could not continue in business with his out of control costs. <\/p>\n<\/blockquote>\n\n\n\n

Here are the remains of Heartland’s carnage:<\/p>\n\n\n\n

\"\"<\/figure>\n\n\n\n

But Carlos had enough blood in his body to remain upright.<\/p>\n\n\n\n

Not so for the following Heartland merchant who was rescued by another ISO. <\/p>\n\n\n\n

This merchant had nothing left to bleed.<\/p>\n\n\n\n

\"\"<\/figure>\n\n\n\n

Legacy payment bros are singlehandedly creating a humanitarian crisis.<\/strong><\/h4>\n\n\n\n

When you walk down the street do you go out of your way to step on bugs?<\/p>\n\n\n\n

Kick cats and dogs?<\/p>\n\n\n\n

Rip flowers from their roots?<\/p>\n\n\n\n

Shit on your neighbors’ yards?<\/p>\n\n\n\n

Just because you can<\/em> do something – either because you know you won’t get caught, or worse, because you’ve induced the victim into signing away their rights – doesn’t mean that you should<\/em>.<\/p>\n\n\n\n

But this precisely<\/em> the type of psychopathic behavior that society has not only condoned, but celebrated<\/a> from legacy payment leaders. <\/p>\n\n\n\n

When the fuck will we draw the line?<\/p>\n","protected":false},"excerpt":{"rendered":"

A lot of readers don’t believe that legacy payments processing is as bad as we make it out to be. “Maaaaan, there’s no way that legacy processors are giant fraud-mobiles increasing the cost of living by over 3%.” Okay, sure. Live in your dreamworld. Pretend that you can’t enrich yourself so much on the backs […]<\/p>\n","protected":false},"author":1,"featured_media":24143,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"image","meta":{"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":true,"jetpack_social_options":{"image_generator_settings":{"template":"highway","default_image_id":0,"font":"","enabled":false},"version":2},"jetpack_post_was_ever_published":false},"categories":[5,4],"tags":[],"class_list":["post-24123","post","type-post","status-publish","format-image","has-post-thumbnail","hentry","category-solutions","category-merchants","post_format-post-format-image"],"jetpack_publicize_connections":[],"jetpack_featured_media_url":"https:\/\/i0.wp.com\/reformingretail.com\/wp-content\/uploads\/2025\/05\/Screenshot-2025-05-08-at-3.48.20%E2%80%AFPM.png?fit=1222%2C1584&ssl=1","jetpack_sharing_enabled":true,"jetpack_shortlink":"https:\/\/wp.me\/p81nA2-6h5","_links":{"self":[{"href":"https:\/\/reformingretail.com\/index.php\/wp-json\/wp\/v2\/posts\/24123","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/reformingretail.com\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/reformingretail.com\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/reformingretail.com\/index.php\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/reformingretail.com\/index.php\/wp-json\/wp\/v2\/comments?post=24123"}],"version-history":[{"count":22,"href":"https:\/\/reformingretail.com\/index.php\/wp-json\/wp\/v2\/posts\/24123\/revisions"}],"predecessor-version":[{"id":24211,"href":"https:\/\/reformingretail.com\/index.php\/wp-json\/wp\/v2\/posts\/24123\/revisions\/24211"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/reformingretail.com\/index.php\/wp-json\/wp\/v2\/media\/24143"}],"wp:attachment":[{"href":"https:\/\/reformingretail.com\/index.php\/wp-json\/wp\/v2\/media?parent=24123"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/reformingretail.com\/index.php\/wp-json\/wp\/v2\/categories?post=24123"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/reformingretail.com\/index.php\/wp-json\/wp\/v2\/tags?post=24123"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}