On the occasion of today’s Visa IPO, especially given my former life at PayPal, a few thoughts…

 

I recently attended one of the largest in-person gatherings of online marketing professionals.  I asked each of the people I met, close to 15 large, name brands the same question:

 

What % of your total revenues are you spending on payments processing?

 

Not one single eCommerce manager could answer the question, even within a ballpark.

 

Why do you all think no one’s looking at this?

 

Some ideas I thought of:

 

1. Overemphasis on top line vs. bottom line
2. “not sexy” relative to cutting CPA or increasing conversion rate
3. lack of knowledge among GMs about how payments work (a corollary might be that there are assumptions that payment processing costs like electricity—necessary, but fixed).

  

Take a look at your payments metrics.  Evaluate the competition.   Run a quick model—it only takes an hour or so.  You might be surprised about how much opportunity there is for you to be a hero and save some money. 

 

Then get in there and make those payments vendors give you back some of your site’s hard earned cash. In this economy, everyone can use a little extra profit, right?

 

Personally, I'm taking a good hard look at Visa.  Given its business model, it's as close as we're going to get this year to a blue-chip IPO.