Most merchants know the payment industry
consists of two separate service providers; Merchant Acquirers and Card
Issuers. Well, that was so until recently when some companies decided to offer
both services—Acquirers are now issuing payment products to retailers. Now,
merchants can have their acquirers issue them payment hardware— and enjoy all
services from a single vendor.
According to Acquirers, offering both
services will cut the price of merchant services for retailers and provide a
conducive environment for the growing number of startups. This is also the
opportunity for Acquires to generate more income and upgrade merchant services
for the benefit of the online retailer.
Interchange: The main reason
Acquirers are Issuing
While we may think interchange comes at
an extra cost to Acquirers, it remains an important revenue source for
Issuers. And now, Acquirers want to
benefit from the Interchange revenue earned from Issuing payment products and,
in return, reduce the cost of accepting retailers.
It’s like some Acquirers have noticed
that they have exclusively focused on merchant selling activities when, in the
real sense, their merchants also need to keep an eye on their cash flow, reduce
the cost for buyers, and get additional funding to grow their bottom line.
Aliaswire leads the revolution
In the past, payment giants like Square
and PayPal, have been issuing Debit cards to online retailers and earning
Interchange revenue whenever a merchant uses the card. Though Debit cards are
useful, they haven’t powered retailers financially, allowed them to establish a
credit history or given them credit lines to rely on. No wonder many ISOs/Acquirers are tapping
into the financing from “credit cards for businesses” issued by Aliaswire and
its partners.
The company is already stocking and
selling card issuing hardware to retailers. In essence, it is now offering all
primary merchant’s needs and optimizing payments by accepting ISO’s/Acquirers
that provide merchants with AR/AP processes.
Aliaswire and the ISO split the revenue
from interchange generated any time a retailer uses the credit card.
Final words
Because merchants are always in search
of extra dollars to purchase supplies, software or inventory, Acquirers should
grab this chance to issue their dedicated merchants a credit card to use during
emergencies. In a word, giving merchants a combined AR/AP solution promotes
better business rapport.
Author Bio: As
the FAM account executive, Michael Hollis has funded millions by using instant approval merchant
account solutions. His experience and extensive
knowledge of the industry has made him finance expert at First American
Merchant.
