“How to choose an optimal acquiring partner for my business?” Questions like this one have recently become quite common. Different kinds of companies are looking for an acquiring partner to serve as “backbone” for their operations. The importance of an acquiring partnership was the subject of one of our recent articles. The most important thing is that your acquiring bank is assuming risk and financial liability for your operations. If you get a merchant account from some acquirer, you can consider it a kind of a loan.
Many banks nowadays are offering acquiring services on different conditions. So, what features should you look at when you are choosing an acquiring partner (just like in case of gateway selection, pricing is not the only criterion)? In this article we are going to provide a brief overview of the most important aspects of acquiring partner selection.
Two sides of acquiring partner selection
If you are looking for an acquiring partner, you need to address two conceptual aspects of the problem: business and technical.
Business aspect concerns the following matters:
- Underwriting conditions and risk requirements
- Supported (authorized) MCC codes
Technical aspect concerns specification complexity and supported features, related to
- Real-time processing
- Batch processing
- Processing of direct debit payments
- Account updater mechanism
- Merchant on-boarding
- Chargeback handling
Technically, all these features are optional (as the set of features you need your acquirer to support depends on your particular business type), but you will definitely need some (if not all) of them, and if you do need them, then you should think about it in advance.
In terms of business aspect, it is important for your acquiring partner to support the business model that is most suitable for you on acceptable conditions.
Search of an acquiring partner is most relevant for three types of entities:
- Payment facilitators
If you are a merchant, then you need to understand the requirements of your prospective acquirer in terms of compliance etc.
If you are planning to resell acquiring services as an ISO (or/especially a PayFac), then you need to understand the underwriting requirements, i.e.
- what information is necessary for initial merchant underwriting,
- what regular merchant monitoring procedures are necessary
- who will assume the risk, induced by potential merchant fraud and chargebacks
Beside that, if you are an ISO or payment facilitator, then it is important to understand, which MCC codes are allowed by the acquirer. Otherwise you might find yourself in a situation where you are allowed to support just 2 or 3 MCC codes, while in fact you need many more of them.
You need to understand how much your prospective acquiring partnership is going to cost and clarify, whether the price you are offered will be the same for all your merchants, irrespective of their MCC codes. Keep in mind that the price may vary depending on potential risk level associated with this or that merchant.
In some cases integration process may cost so much that it offsets the savings that it, potentially, generates for many months. You should be especially careful with scoping when EMV terminals are involved.
Not all payment processors and acquirers have convenient merchant onboarding mechanisms in place. If you are a payment facilitator looking for an acquirer, then onboarding-related issues are crucial. Onboarding procedures offered by the acquirer should be flexible, efficient, and they should work fast (prospective merchants should learn whether onboarding is successful ASAP).
Similar efficiency and flexibility is required from other payment facilitation related procedures, such as chargeback handling, reconciliation etc. Your new acquiring partnership should ensure better service for your merchants in every respect.
There are two aspects of acquiring partner selection: business and technical. Depending on the type of your business, the scope of these aspects may vary, but you should carefully consider both of them in order to make an informed and competent choice.
If you need consultations regarding your particular case, you are welcome to consult our specialists at UniPay Gateway. We have already helped many businesses to establish successful acquiring partnerships, and we will be glad to help you in your search.