Direct merchant gateways for acquirers

By Sebastian Gollwitzer on 8. August 2013 in Market Insights, Open Payment Technology

Continuing my blog posts about PAY.ON’s serviceoffering towards acquirers and our experience gained in this field, today I will shed some light on direct merchant gateways for acquirers.

Based on my experience, acquirers regard payment service providers (payment service providers/independent sales organizations) as a valuable sales channel. They partner with the PSP and employ business models that make the business – which the PSP brings to the acquirer – rewarding for both sides. In other words: payment service providers have a robust position in the payments’ value chain.

Nonetheless, there are merchants of certain size or in a particular business vertical who approach acquirers without a PSP being involved, and these merchants are determined to work with that acquirer directly. Under these circumstances, referring the merchant to a PSP-partner is not going to work. Thus, the merchant needs to be boarded and served right by the acquirer – which comes with certain technical requirements for the acquiring system.

While acquiring systems are very feature rich and capable, they are not built to serve the needs of merchants on the user interface and shop integration side. There are two possibilities to master the challenge. Either the merchant needs to develop a connection into the acquiring system; usually a cumbersome and complicated task that requires significant resources on both sides. Or the acquirer is equipped with his own merchant gateway that alleviates the technical complexity when it comes to serving merchants directly while – ideally – featuring a broad service offering including multi-channel capability and very easy merchant integration.

Today, acquirers around the globe use PAY.ON’s multi-channel platformexactly for this purpose. PAY.ON provides the acquirer with a full-fledged merchant gateway including payment front-end with easiest integration options, back-end, the BI platform, fraud scrubbing, reporting, and many more features. The underlying SaaS infrastructure enables that the merchant gateway can be fully branded and set up within 24 hours – of course in a PCI level 1 certified environment with top-notch technology.

Now, this may all seem like a highly competitive situation where both, acquirer and PSP, compete for the business of the merchant, but it actually is not. Acquirers do not want to cannibalize their valuable PSP sales channel. They do not ‘lure’ merchants away from the PSP in order to board them directly. Acquirers typically board only those merchants who directly approached them without the involvement of a PSP because a good partnership mandates both sides to abstain from competing with the partner. In a growing market, this ‘rule’ is absolutely sufficient to safeguard the proven partnership approach between PSP and acquirers, while still enabling acquirers to serve merchants directly where suitable and required.


Sebastian Gollwitzer

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Sebastian GollwitzerView all posts by Sebastian Gollwitzer


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