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Competition to put card-acceptance gear in the hands of mobile, small and vertical niche merchants is heating up. This has prompted more acquirers to reduce friction in the boarding process by signing up multiple clients under a single master merchant account, instead of using the time-consuming process of establishing an account for each seller.

The practice, known as merchant aggregation, has been widely viewed as a solution to solve the micromerchant problem. However, ISOs and acquirers are discovering benefits for a broader base of clients. The most compelling advantage is the frictionless boarding process, but it can simplify funding individual merchants as well. Aggregation can become a cost-effective and extremely easy payment acceptance method.

Today, companies are using the aggregation model to address customer needs and capture market share. At the same time, smart companies are assessing whether they can compete profitably against the huge infrastructure and capability of technology providers like PayPal and Square. The key to gaining a stable position in today’s rapidly evolving payments landscape is to develop a competitive, customer-centric strategy that combines the strengths of traditional merchant processing with advanced approaches to underwriting, risk management and specialized customer service.

ISO and Agent Online, April 30, 2013