Wednesday , June 26, 2019

Acquirers Becoming Issuers:
The Evolution of Merchant Services

Until recently, Merchant Acquiring and Card Issuing processes were at different ends of the spectrum. However, ingenuity, competitive pricing for merchant services, and an opportunity to better serve the growing number of new businesses are resulting in a confluence of acquiring and issuing in the payments industry.  Acquirers are now offering payment products and services that were once available only through issuers and unlocking new revenue opportunities while fueling merchant service enhancements that bolster their bottom lines.

Why are Acquirers getting into the Issuing market?

Interchange, of course.  While Interchange represents a cost to the Acquirer, Interchange is a revenue source for the Issuer.  Acquirers are now looking to tap into the Interchange revenue generated from Issuing products to boost revenues and lower the cost of acceptance for their merchants.

Aliaswire has taken a holistic approach to this rising trend in providing merchant-centric card issuing products. Traditionally, acquirers have solely focused on merchant selling activities when in reality, merchants are equally focused on managing cash flow, lowering cost, and obtaining financing to grow. Aliaswire is supporting these core business needs and streamlining payments for businesses by providing a solution to ISO’s and Acquirers that integrates both AR and AP business processes.

In the past, payment providers such as Square, and PayPal have been issuing Debit cards to their merchants and are generating Interchange revenue whenever their merchant uses the Debit card.  However, Debit cards limit merchants’ purchasing power, don’t enable them to build their credit history and do not provide a line of credit.  Now, however, many ISO’s and Acquirers are unlocking the financial benefits of business credit card issuing by partnering with Aliaswire.

The Power of B2B Credit

Aliaswire’s PayVus® program accomplishes this by issuing a MasterCard World Business credit card to the ISO’s/Acquirer’s merchants. The PayVus technology platform split-settles a portion of the merchant’s daily card processing deposits to the PayVus credit card. The combination of the PayVus card’s line of credit combined with the daily deposits to the PayVus card provides greater purchasing power for the merchant that helps the merchant better manage cash flow.

Aliaswire provides a revenue share to the ISO/Acquirer from Interchange generated when merchants make purchases with the card. ISOs and Acquirers can use the revenue share to reduce merchant processing fees. This new approach to merchant acquiring may yield significant savings through the reduction of merchant processing fees.

For the merchant, the PayVus card provides a revolving line of credit to the business without a personal guarantee and, unlike debit cards, the transacting on the PayVus card helps the merchant build a solid credit history.  Additionally, traditional card reward programs have limits on rewards whereas PayVus has no limit on savings.

Every business makes purchases, for supplies, inventory, software or meals. ISO’s and Acquirers can – and should – capitalize on this opportunity by providing their merchant with a credit card for making purchases and managing business expenses.  Providing merchants an integrated AR/AP solution, paves the way for stronger and longer lasting relationships, reducing churn and increasing ISO/Acquirer revenues.

 

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