So, I know I said this the other day, but I’m done talking about Heartland until/unless something really interesting happens. And by really interesting, I don’t mean that their CEO was up to no good or that they get sued or that they failed to notify impacted individuals. If you’re surprised by any of those things, you’re way too trusting a person.
No, my prediction is a simple one, and I’m not going to talk about this company again until/unless it comes true. Namely, I think Heartland is going out of business.
Why? Because payment processing is a thin-margin business and it’s highly competitive. Relative to its competitors, Heartland will have increased overhead associated with all the incoming law suits and fines – not to mention all the remediation activity that they’ll have to go through if they do intend to stay in business. Plus, they’ll have less revenue coming in…
Think about it this way… what is it that a payment processor is in the business of selling? If you answered “trust”, you’re right on the money.
So is a merchant going to trust (and therefore sign with): a) the company that oversaw the biggest lost of data of all time or b) the guy down the street selling the same service at the same price with no record of incident? Who’d you pick? And last nail in the coffin in my opinion is that they’re going to need to dump their “bullseye-on-his-forehead” CEO. Seriously. Whether he was insider trading or not (looks like he probably was but let’s give him the benefit of the doubt), he’s an albatross. Dump him.
So what’s that spell? Unprofitableness for Heartland. There’s only so long that unprofitableness can continue, and I’m thinking they’ve got 2 years to go. Others might disagree, but remember what happened to Cardsystems? Sold for a song after losing most of it’s value… So, bye bye Heartland. Was nice knowing you! And thanks for that fraud on my Chase card…
P.S. Tombstone from JJ Chandler’s tombstone generator
Friday July 30, 2010
Diana Kelley's profile