Reducing the friction involved in boarding a small merchant doesn’t necessarily require aggregation, but merchant aggregation is one well-established way to reduce that friction, says Todd Ablowitz, president of Double Diamond Group, a payments consulting firm based in Denver, Colo. Missing the trend of
making boarding easier could cause an ISO to lose business to competitors, he adds.

“The boarding process is hugely important, but many ISOs find that they’re unable to get as far as they want to go without enabling an aggregation component,” he says. “Either their processor can’t support it or their sponsor can’t support it. There are hurdles when not doing aggregation. The large companies that have control over their systems and have a very wide berth from their bank have the best chance of doing more of this without
technically doing aggregation.”

And even ISOs that aren’t interested in becoming aggregators should understand the process, says Ablowitz. “We’ve found that many ISOs already have aggregators in their portfolios, and they sometimes have not yet been registered,” he says.

Merchant aggregation requires that ISOs manage risk… Aggregation in a vacuum isn’t very valuable. It’s when it’s tied with products and services.

ISO and Agent Online, November/December 2013