Wednesday , November 25, 2020

Merchants Turning to Small Business Credit Cards to Improve Cash Flow

ISOs tap into card issuing revenue

One of the biggest challenges for small businesses is the availability of credit according to a recent study* by the Federal Reserve.

Many merchants address this by taking out short-term business loans or using personal credit cards to bridge the gap. While credit cards with a revolving line of credit are a good funding source for merchants, many do not qualify for the rigid underwriting policies of most, if not all, the major banks.

While using personal credit cards to make everyday business expenditures solves the short-term problem, these cards can take a toll on the business owner’s personal credit score which will further inhibit the business owner to finance their personal needs, such as refinancing their home or purchasing a car.

PayVus: The Small Business Credit Card Program Built for ISO’s and Acquirers

Historically, banks decline the vast majority of small business credit card applications because it is very difficult for the banks to assess the risk of newly opened businesses, sole proprietors or business owners with low credit scores.  Merchant’s daily card processing receivables are rarely taken into account by banks when assessing risk. The missed opportunity for these banks is a new opportunity for ISOs and Acquirers.

Aliaswire has designed a small business credit card specifically built for the types of merchants served by merchant service providers. By leveraging the merchant’s card processing receivables, the PayVus® credit card enables merchants to take control of their cash flow and gain access to a small business credit card.

With PayVus, your merchant will be issued MasterCard World Elite Business Credit Card with a line of credit based on their FICO score – up to $10,000. 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 and 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 can 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 credit history. Additionally, traditional card reward programs have limits on rewards whereas PayVus has no limit on savings.

 A new Revenue Source for Merchant Service Providers

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 can 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 and, unlike debit cards, the PayVus card helps the merchant build a credit history.

Every business makes purchases, for supplies, inventory, software or meals. ISOs 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.

*2019 Report on Employer Firms – Federal Reserve Bank

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