Payment processing industry is very heavily regulated, moving your infrastructure to a new solution is extremely costly from the audit/compliance perspective and in some cases it's downright impossible to move to "the cloud" because of the physical access restrictions etc. To my knowledge all of the big boys - V, MC, AmEx, Discover host their own infrastructure (or partner with certified data centers).
That "piddly little local co-locted hosting company" (whoever they are) is subject to some pretty intense level of scrutiny and has to pass gazillions of tests outside of your normal hosting SLA stuff just to claim that they are compliant.
That "piddly little local co-locted hosting company" (whoever they are) is subject to some pretty intense level of scrutiny and has to pass gazillions of tests outside of your normal hosting SLA stuff just to claim that they are compliant.