For most of the payments industry's history, "aggregation" was a naughty word describing an activity forbidden by the card brands. When it came to merchants' payment processing, it was a one merchant, one account world. Period. Letting one merchant process other merchants' transactions opened the door to high-risk and illegal activities, right? Then Square came along. It wasn't the company's dongle that was revolutionary. Roam Data had already introduced such a device before Square made its big splash. It was the company's business model that changed the game. At first, some industry stalwarts dismissed the upstart, saying that it's just going after micro merchants, a sector we don't want; it's losing money by the day; it's an aggregator, and the card brands will clamp down.
Then Visa invested in Square. A few years later, the card company created a new category of "master merchants" that could provide processing services to smaller "sub-merchants." The other major brands followed suit, and payment facilitators (payfacs) became new forces that are enriching the industry. There's a lot more to payfacs than merchant aggregation. Their dynamic entrepreneurship and new technologies are creating innovative ways to provide new benefits to merchants, while creating revenue streams for payment companies that learn how to work with them.
This issue's lead article is the first in a two-part series that delves into payfacs ‒ their evolution, as well as current and potential future impacts. Complementing the lead article is commentary in our Views section on why payfacs need acquirers and vice versa. Another View article shares insights gleaned at the ever-growing Money20/20 conference, which was held in October and hosted a whopping 15,000 attendees.
Other articles by contributing writers look at why viewing opportunities from 10,000 feet above provides clarity when making business decisions, and further exploration of how to assist merchants during the holiday season, a discussion that began among our Advisory Board members in ""Helping merchants thrive during holiday season 2017," The Green Sheet, Oct. 23, 2017, issue 17:10:02.
You'll also find inspiring individual, company and product profiles; a recap of the industry's latest news; and briefs on appointments, partnerships, acquisitions, research, awards and other victories celebrated by members of the payments community.
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