More NewsMerchant Acquiring Opportunities: Focusing on the Merchant’s Clients

Merchant Acquiring Opportunities: Focusing on the Merchant's Clients

A new report from Aite Group examines the opportunity for merchant acquirers and banks seeking to capture new revenue on the issuing and acquiring side. The report provides insight into the changing needs of merchants and discusses ways in which they can differentiate themselves in the market. It also highlights three approaches to cull new customers for retailers: the group coupon, the merchant-funded reward, and mobile-based marketing.

Over the years, merchant acquirers have offered value-added services in the form of products that helped merchants with their payments (cheque services, gift cards, etc). If the merchant acquiring industry continues to focus only on financial transaction processing, it risks eventually finding itself offering rewards to merchants, which will contribute to increased margin compression. Instead, Aite Group believes that the merchant acquiring industry should help merchants address their real needs: the acquisition and retention of customers, and how to make customers spend more. In doing so, merchant acquirers will bring value to their merchants, while putting the onus on the merchant to offer the incentives to their customer.

“Aite Group believes that merchant acquirers and banks are in a solid place to turn a challenging position in the market into a winning strategy,” said Adil Moussa, analyst with Aite Group and author of this report. “Merchant acquirers must take advantage of a need that has existed since merchants became merchants: how to increase traffic and spending at retailers.”

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