Author of the Paylosophy blog, a veteran writer, and a stock analyst with extensive knowledge and experience in the financial services industry that allows me to cover the latest payment industry news, developments, and insights.
My works have been cited across media and payment blogs. I do my best to help businesses make the most efficient financial decisions that can positively and significantly improve their business growth.
Whether you are a seasoned investor or just starting out in the world of payments, my writing is designed to be accessible to everyone and help people navigate the complex world of payments. So if you want to stay up-to-date on the latest trends and insights in the payment industry, be sure to check out Paylosophy and my published works.
Product specialist with more than 10 years of experience in the Payment Processing Industry. I help payment facilitators and PSPs solve their various payment processing issues. On a regular basis, I work with a team of knowledgeable technical people in the space, and I am passionate about finding creative solutions to the challenges presented by the Payments Industry.
I would be happy to help with any questions you might have regarding credit card payment processing, merchant services, EMV certifications, the various ways of becoming a payment facilitator or a payment platform, as well as any other Payment Industry related issues you might be struggling with. Feel free to follow me on Quora, and don’t hesitate to send me links to the specific Quora questions you would like me to answer.
“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
- Pricing
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
- Reconciliation
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.
Business aspect
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:
- Merchants
- ISOs
- Payment facilitators
If you are a merchant, then you need to understand the requirements of your prospective acquirer in terms of compliance etc.
Underwriting
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
MCC
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.
Price
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.
Technological aspect
Integration
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.
Onboarding
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).
Other issues
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.
Conclusion
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.
Recommended to you
