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.
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.