The Green Sheet Online Edition
April 4, 2025 • 25:04:01
How merchant size influences acquirer selection
Times have changed since retailers viewed the selection of a merchant service provider as merely a commodity decision. While the finance function may still take the lead, many other stakeholders and departments are now actively involved in the selection process including IT, operations, marketing, data security, compliance and procurement.
Cost remains a critical selection factor, but the lowest cost is no longer sufficient on its own. Enterprise merchants, therefore, apply weightings to each decision criteria when scoring request for proposal (RFP) responses. Thanks to the dramatic increase in the number of providers (and sales agents) offering merchant services to small and midsize businesses (SMBs), unsolicited offers of lower fees are common today, reducing acquirer retention rates. However, SMBs are increasingly aware that they need to look beyond price if they are to satisfy heightened customer expectations and strategic business priorities.
Capabilities previously reserved for large merchants, like the integration of the payment terminal with the EPOS register and a wider range of supported payment methods, including digital wallets, are now desired and valued. For enterprise merchants, vertical sector understanding and experience are crucial, including pre-integration with key sector-specific business applications.
Digital payment needs by merchant size
Digital sales channels are critical for most merchants as online transaction volumes continue to accelerate. SMBs are seeking an easy-to-implement, vanilla ecommerce payments product as part of a one-stop-shop acquiring service.
Enterprise merchants, however, seek more advanced digital payment acceptance capabilities, additional digital channels, support for cross-channel customer journeys, authorization and authentication optimization – a unified platform architecture, all delivered as part of a cutting edge omnichannel acceptance solution.
Payments innovation as a key differentiator
The level of payments innovation offered is a further factor to be used when comparing acquirers. One example is Tap on Mobile, which for an SMB may be used to reduce the cost of buying a payments acceptance device, but for an enterprise merchant, this adds significantly more value from queue busting, self-checkout, assisted customer service and endless product aisle use cases.
The larger the merchant, the greater the priority placed on an acquirer's ability to deliver a highly reliable and high-performance service. Payment processing, particularly during peak season trading, has become a mission-critical business service, and merchants simply cannot afford any downtime, making high resilience a key evaluation criterion. Most senior executives will prefer to avoid lost sales, customer dissatisfaction and brand damage for the sake of marginal savings on processing fees. While SMBs are starting to recognize the importance of service reliability, they often undervalue it until they experience a service outage firsthand.
Customer support and account management
A key differentiator between acquirers is often the quality of customer support provided, and this is increasingly a key decision-making factor. Merchants should compare key factors such as standard support hours, availability of telephone assistance, access to dedicated support representatives, support team location and language capabilities. Enterprise merchants, in particular, recognize the importance of receiving high-quality support, and SMBs also are starting to expect to receive the same hyper care provided to larger merchants.
Building upon customer support is a factor of the quality of account management provided. Large merchants have much more complex environments and sophisticated payments needs, require integration to a myriad of internal systems, and a large estate of stores and devices to be managed.
This requires that acquirers provide extremely strong account management and project management. Having an experienced acquirer with the skills, resources and track record to support large businesses is invaluable.
Flexibility and value-added services
Overall, SMBs prefer a single supplier for all their payments acceptance needs, while enterprise merchants seek the flexibility to pick and choose best-of-breed providers on a modular basis rather than being locked into a single full-stack arrangement. Therefore, a leading omnichannel gateway provider that supports 3rd party acquirers in addition to having an internal acquiring service offers tremendous value and choice.
Fast funds settlement periods are important for all sizes of merchants but particularly for SMBs for whom cash flow is critical. Enterprise merchants also look for a comprehensive suite of value-added-services (VAS) including dynamic currency conversion, consolidated real-time reporting, payments orchestration, advanced fraud prevention, network tokens, SCA optimisation and a customer engagement marketing platform.
When reviewing VAS capabilities merchants should ascertain if these are in-house developed products or merely white-labelled products. Higher value should be assigned to the former thanks to the improved level of data integration, faster time to market and improved support. Additionally, enterprise merchants operating internationally or within multinational corporations prioritize acquirers with local payment methods and acquiring licenses to minimize transaction fees, improve acceptance rates, and cater to customer preferences.
Corporate social responsibility considerations
Enterprise merchants are increasingly attaching higher value to suppliers that match their corporate social responsibility (CSR) priorities. This includes building trust with reliable, secure innovative and positive impact solutions, ensuring respect for human rights and sustainable procurement practices, being a responsible employer, reducing environmental impact, and helping local communities through positive social initiatives. Large merchants should be asking potential suppliers for their CSR roadmap and how they are tracking progress towards their goals. SMB merchants are also starting to consider sustainability as a supplier selection criterion. Additionally, innovative acquiring capabilities such as micro-charity donation support can serve as indicators of a payment provider's commitment to CSR.
Unlike enterprise merchants, SMBs value the choice of contracting merchant services on either a blended or IC++ pricing model. They also seek the flexibility of renting or purchasing a payment device and value receiving hyper-care during onboarding. Selecting an acquirer is a critical decision for businesses of all sizes, but especially for large enterprises, where organizational and cultural alignment must be weighed alongside technical capabilities and financial terms. Choosing the right acquirer not only enhances revenue streams and reduces costs but also improves customer satisfaction, ensures operational stability and supports long-term business growth
Authors: Lee Jones is chief executive officer of Worldline Merchant Services UK Ltd. and managing director of Enterprise UK. Habib Ansari, country head at Worldline, leads the company's Merchant Services – SMB unit in the UK. Contact Lee Jones via LinkedIn at linkedin.com/in/leejones907 and Habib Ansari at linkedin.com/in/habib-ansari-8738423a. For information about Worldline, visit https://worldline.com.
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