VeriFone to Exit Mobile POS Acquiring Business

During the fourth-quarter teleconference with analysts, VeriFone announced that it is stepping back from its role as an direct acquirer for SAIL merchants.

Earlier this year, we launched SAIL as a way to bridge the gap between the way our traditional channel partners conduct business and the specific needs of very small micro-merchants. Our experience through 2012 with tens of thousands of these micro-merchants tells us that the standalone economics of micro-merchant acquiring is fundamentally unprofitable and destined to be a negative gross margin business. Customer acquisition costs either through search engines or TV advertising cannot and will never justify the razor-thin margins produced by merchants with infrequent volume and extremely high attrition.

The company will continue to market SAIL products through banking partners and ISOs. Digital Transactions has a good story on the strategy shift.