Enter the Payment Facilitator

The accelerating pace of change in payments, combined with a whole new level of complexity, is creating a huge need for this new breed of merchant-services partner, says Bill Clark.

A new breed of super partner is being called upon that can deliver the knowledge, resources, teams, and technologies to put the diverse puzzle pieces in place.

By Bill Clark

Since its creation, the payments industry has proven itself a dynamically moving and evolving space. Ever-shifting financial regulations, market demands, and consumer preferences continue to keep merchants and their service providers physically and figuratively on their toes.

The good news is, those who vigilantly monitor the pulse of change, and are earliest in adjusting and adopting new ways of conducting business, are usually the organizations reaping the greatest rewards.

But doing so isn’t easy. This business is not for the faint of heart. It calls for insight, experience, and courage in knowing when, and when not, to pull the trigger. And this applies not just to any new offerings, but also to those that actually prove to be advantageous to the business.

As we get deeper into 2015, merchant-services providers are being asked once again to consider new partnership choices. After all, many traditional merchant-services providers now have to find ways to compete and provide a new level of service. Some are even faced with the need to reengineer themselves to expand and redefine their service model.

What’s New?

Payment facilitators, or master merchants as they are also called, are now being permitted to offer a much broader range of services. They are becoming a faster and more flexible one-stop merchant-services resource for the legions of smaller businesses that choose to operate under their master-merchant ID umbrellas.

With roughly 250,000 new businesses starting each month, according to some studies, and with an attrition rate of 20% among them, merchant-services providers are in deep need of the simplified acquiring and boarding alternatives that payment facilitators can now deliver. The demand to quickly sign up, set up, and turn on merchants has never been more urgent.

This emergent class of payment facilitator is now able to get sub-merchants easily and efficiently boarded using highly customized, business-optimized, and short-cycled turnkey solutions. These solutions encompass an array of services, including the provision and certification of the latest Web or tablet-enabled point-of-sale software, hardware, and gateways for both fixed and mobile operations. They also often include seamless, full-chain payment underwriting and aggregation.

Now, this roster of services can include the approval and processing of up to $1 million in annual volume per card type. Major card companies, including MasterCard Inc. and American Express Co., have adopted these new and elevated payment-aggregation ceilings, and other market leaders are likely to follow. This recent change greatly widens the addressable market and has triggered a near feeding frenzy among providers, who now see the sub-merchant class as a bona fide revenue opportunity.

Add on the other features normally associated with larger businesses, such as integration with robust back-office metrics, reporting, and management capabilities—in addition to value-added, cloud-based marketing apps, loyalty programs, and other business-building, revenue-spurring tools—and it’s easy to understand the keen interest in the across-the-board value payments facilitators provide merchant-services organizations, as well as their merchant customers.

What’s the Benefit?

Ease and opportunity are key benefits. In an industry that has remained complex from the start, persistent innovation continues to expand exponentially and, in effect, create seemingly endless options in payment products, platforms, and paths to success.

For merchants and the organizations servicing them, all of which simply want to do business every day as productively and profitably as possible, it’s all becoming increasingly overwhelming. Nothing appears easy, and opportunities aren’t always clear.

A new breed of super partner is being called upon that can deliver the knowledge, resources, teams, and technologies to put the diverse puzzle pieces in place and make business sense of it all—while still inspiring trust and confidence. A tall order, indeed, but the payment facilitator is proving to be precisely that super partner.

Why Now?

The imminent deployment of EMV chip technology throughout the United States, and its universal implementation deadline of October 2015, make today the perfect time for merchant-services providers to seek out and partner with full-service payments facilitators that can, as their name implies, facilitate the adoption and implementation of both mandatory and strategic changes for both new and existing merchants.

With so many moving parts involved, and time being of the essence, merchant-services providers are finding themselves hard-pressed to effectively manage the bombardment of so many options and opportunities on their own. They’re faced daily with managing, integrating, and essentially juggling multiple service-chain partners, and, in the process, potentially missing out on vital business opportunities, while inadvertently exposing their merchants to risk.

Frankly, it’s not worth the time, effort, or potential liability. And waiting to “see how the dust settles,” in this case, is also not an option. On behalf of new and existing merchants, merchant-services providers have no choice but to act now. not only to ensure industry compliance, but also to sharpen their own market competitiveness.

The New Model

Full-service payment facilitators that offer expedient aggregation and processing services represent the new business model in payments. They are significantly changing the nature of merchant acquiring and boarding, accelerating speed, deepening service, and resetting the expectation bar for merchants, merchant-services providers, and the consumers they exist to serve.

Payment facilitators are the new de facto payments partners, and now is the time for merchant-services providers to find one and partner up. The alternative—business as usual—is no longer an option.

–Bill Clark is chief executive officer of Spindle, Scottsdale, Ariz.