When it comes to merchant sales and acquiring, terminology related to payments often causes some confusion. Merchant acquirers and payment processors are not the same thing even though some people use them synonymously. Understanding the difference will facilitate a smoother business process for sales of products and services overall.
Professionals use three terms to indicate the same function: merchant acquirer, acquirer, and acquiring bank. As the last one indicates, a merchant acquirer is a financial institution like a bank that handles sales deposits and can process refunds.
In order to know how to become a merchant acquirer, a bank needs an established relationship with the major credit card companies like Visa, MasterCard, and Discover. They do not process the payments directly but do lend an important benefit to the entire merchant sales and acquiring process. After all, the many needs somewhere to go after a customer or client pays.
Through the card network relationships, merchant acquirers take on a considerable part of the responsibility for accepting payments. These banks uphold all regulatory requirements and rules for financial institutions and the credit card companies they work with. When they become a payment facilitator, they also engage in underwriting and oversight of the merchants connected to them through the payment acquisition process.
A merchant services independent sales agent works to connect sales companies with merchant acquirers and payment processors to facilitate the function of their business. They can help explain the differences between each and find ones that work for specific needs. Payment processing facilitators may even remove more of the complexity than that. First, understand what a payment processor is.
What Is a Payment Processor?
This term seems more straightforward as it describes the exact action taken by the financial entity. A payment processor maintains the technological infrastructure, connections, and security to process all payments swiftly and safely between businesses and consumers. They become a payment facilitator by handling the authorization of transactions and transfer of money between individuals, commercial entities, and banks.
Examples include credit card companies and online platforms that allow members to have accounts like PayPal and Stripe. These payment processors provide both merchant acquirer and payment processor services because they handle both the technical order management and the receipt of money sides of the payment equation. Larger brick-and-mortar banks also offer these types of things to smooth the process for their larger clients. Firms that do both are often referred to as merchant acquirers even though they are also payment processors, too.
When companies use a payment facilitator, they do not need to establish relationships with merchant acquirers or payment processors directly. This simplifies the entire thing and may reduce the risk of ever or security breaches because the payment funds go through fewer processes. A payment facilitator handles both sides of the transaction so the merchant enjoys a hands-off relationship with long list of credit card companies and banks. Choosing one of these services creates a highly efficient payment processing system for digital and real-world sales.
Merchant acquirers play a crucial role in the payment processing industry, serving as intermediaries between merchants and financial institutions. Becoming a Registered Independent Sales Organization (ISO) for merchant services can offer a range of benefits, including increased revenue opportunities and the ability to expand your business offerings. In this report, we will explore what a merchant acquirer is, the benefits of becoming a Registered ISO, and how to effectively sell payment processing services.
What is a Merchant Acquirer?
A merchant acquirer is a financial institution or payment processor that enables merchants to accept electronic payments from customers. This includes credit card and debit card transactions, as well as other forms of electronic payments such as mobile and online payments. Merchant acquirers provide merchants with the necessary tools and services to securely process payments, including payment terminals, payment gateways, and fraud prevention tools.
Key Functions of a Merchant Acquirer Include:
Processing credit card transactions
Authorizing payments
Settling funds to merchants
Providing customer support and dispute resolution services
Complying with industry regulations and security standards
Becoming a Registered Independent Sales Organization (ISO) for merchant services can offer a range of benefits for businesses looking to expand their offerings and increase revenue. Some key benefits include:
- Increased Revenue Opportunities: As a Registered ISO, you can earn revenue by onboarding new merchants and processing their payments. This can provide a steady stream of income for your business.
- Expanded Service Offerings: Offering merchant services can help you attract new clients and differentiate your business from competitors. By providing payment processing services, you can become a one-stop shop for all of your clients' financial needs.
- Access to Industry Expertise: Registered ISOs have access to training and support from merchant acquirers, helping them stay up-to-date on industry trends and best practices. This can help you provide better service to your clients and grow your business.
- Flexible Business Model: Becoming a Registered ISO allows you to set your own pricing and terms for merchant services, giving you more control over your business. This can help you tailor your offerings to meet the needs of your clients and maximize your profits.
Selling payment processing services requires a combination of industry knowledge, sales skills, and relationship-building abilities. Here are some key strategies for effectively selling merchant services:
1. Understand Your Target Market: Before approaching potential clients, take the time to research their industry, business model, and payment processing needs. This will help you tailor your pitch and demonstrate the value of your services.
2. Highlight the Benefits:When selling payment processing services, focus on the benefits for the merchant, such as fast and secure transactions, increased sales opportunities, and improved customer satisfaction. Emphasize how your services can help them save time and money.
3. Provide Transparent Pricing: Make sure to clearly explain your pricing structure, including any fees or charges that may apply. Being transparent about costs will help build trust with potential clients and avoid any misunderstandings down the line.
4. Offer Customized Solutions: Every merchant is unique, so be prepared to offer customized solutions based on their specific needs and preferences. Tailoring your services to meet the merchant's requirements will help you stand out from the competition and win their business.
5. Provide Excellent Customer Service: Building strong relationships with your clients is crucial for long-term success in the merchant services industry. Make sure to provide prompt and professional customer service, and be responsive to any questions or concerns they may have.
6. Stay Up-to-Date on Industry Trends: The payment processing industry is constantly evolving, so it's important to stay informed about new technologies, regulations, and security standards. This will help you provide the best possible service to your clients and remain competitive in the market.
Conclusion
Becoming a Registered Independent Sales Organization (ISO) for merchant services can offer a range of benefits for businesses looking to expand their offerings and increase revenue. By understanding the role of a merchant acquirer, highlighting the benefits of becoming a Registered ISO, and following key strategies for selling payment processing services, you can successfully grow your business and attract new clients in the competitive payment processing industry.
White label merchant acquiring is a service where a company provides payment processing services to merchants, but the branding is done under the name of another company, also known as the white label company.
Becoming a payment processor involves understanding the complexities of the payment processing industry, obtaining the necessary licenses and certifications, and establishing relationships with banks and payment networks.
Selling merchant services to small businesses requires a combination of knowledge about the industry, understanding of the specific needs of small businesses, and effective sales and marketing strategies.
White label merchant acquiring is a service where a company provides payment processing services to merchants, but the branding is done under the name of another company, also known as the white label company.
The white label company acts as a middleman between the merchant and the payment processor, handling all aspects of the payment processing, including payment gateway integration, fraud prevention, and customer support.
The white label company typically charges a fee for their services, which can be a percentage of the transaction amount or a flat fee per transaction.
Understand the payment processing industry: Before becoming a payment processor, it is essential to have a thorough understanding of the payment processing industry, including the various types of payment methods, regulations, and security requirements.
Obtain necessary licenses and certifications: To become a payment processor, you will need to obtain the necessary licenses and certifications, which vary depending on the region and the type of payment processing services you plan to offer.
Establish relationships with banks and payment networks: In order to process payments, you will need to establish relationships with banks and payment networks, which will allow you to send and receive payments on behalf of your merchants.
Understand the needs of small businesses: Small businesses have unique needs when it comes to payment processing, so it is important to understand these needs and tailor your services to meet them.
Develop effective sales and marketing strategies: Selling merchant services to small businesses requires a combination of effective sales and marketing strategies, including identifying target markets, developing compelling sales pitches, and leveraging online and offline marketing channels.
Provide excellent customer support: Customer support is crucial when selling merchant services to small businesses, as they rely on your services to process payments and manage their finances. Providing excellent customer support can help you build trust and loyalty with your clients.
Conclusion
White label merchant acquiring is a service where a company provides payment processing services to merchants, but the branding is done under the name of another company, also known as the white label company.
Becoming a payment processor involves understanding the complexities of the payment processing industry, obtaining the necessary licenses and certifications, and establishing relationships with banks and payment networks.
Selling merchant services to small businesses requires a combination of knowledge about the industry, understanding of the specific needs of small businesses, and effective sales and marketing strategies.
Merchant Acquirer vs Payment Processor
Merchant acquirers and payment processors are both key players in the payment processing industry, but they serve distinct roles in the payment ecosystem. Merchant acquirers are financial institutions or companies that establish and maintain relationships with merchants to enable them to accept electronic payments, such as credit and debit card transactions. They are responsible for underwriting merchant accounts, managing risk, and facilitating the settlement of funds between merchants and card networks. On the other hand, payment processors are technology companies that handle the technical aspects of processing transactions, such as authorization, clearing, and settlement. They work behind the scenes to securely transmit payment data between merchants, acquirers, and card networks, ensuring that transactions are processed accurately and efficiently.
While merchant acquirers and payment processors have distinct roles, they often work together closely to provide end-to-end payment processing services to merchants. Merchant acquirers rely on payment processors to handle the technical aspects of transaction processing, while payment processors rely on acquirers to establish and manage merchant relationships. This collaboration ensures seamless payment processing for merchants, allowing them to accept a wide range of payment methods and providing customers with a smooth and secure checkout experience. By understanding the roles of merchant acquirers and payment processors, merchants can make informed decisions when choosing a payment processing partner that meets their specific needs and requirements.
