An acquirer-agnostic payment service provider (PSP) offers merchants a payment gateway with connections to a variety of national and international acquirers and provides advice about which ones would be more suitable.
Acquirer prices are based on the category of goods, the countries in which they are sold, and the sales channels, and can vary enormously. This is why PSPs that enable connections to various acquirers are beneficial, helping retailers to find the most suitable acquirer and the lowest cost. Being able to switch acquirers seamlessly gives merchants greater leverage and ensures they take advantage of the specific market conditions.
It's important for retailers to have a choice when it comes to the availability rate, allowing them to accept a wider variety of credit card payments online and offer a faster service. For multinational merchants, it can take time to establish acquirers in different counties. However, if a payment gateway connects to a range of acquirers, this not only improves choice but allows merchants to harness specialist acquirers in a region or change an acquirer quickly to maintain service quality.
By using an acquirer-agnostic solution, retailers can have arrangements with several acquirers, and if there is a technical problem with one, credit card payments can be processed via a "backup" acquirer seamlessly.
Local or regional acquirers can usually provide merchants entering new markets with favourable terms and better acceptance rates for card payments, particularly if local credit card brands (i.e., non-US brands) are widely used.
While acquirers will offer cross-border card acceptance for some global regions, such as the EU, this does not mean all countries in the region are served. If a retailer uses an all-in-one payment solution with such an acquirer, they may encounter difficulties as they scale to new locations, where a new, additional payment solution and integration to a new gateway will be needed.
No acquirer operates a single technical platform that can be used globally. A retailer can, for example, select a large, internationally active acquirer to accept card payments within the EU, which necessitates signing a contract with a country organisation of the acquirer within the EU. They, in turn, connect the retailer to their European processing platform.
This set-up will not work if the merchant wants to expand into Asia where a different technical platform is needed. Conversely, a payment gateway includes connections to multinational platforms, making it considerably easier for expanding merchants.
Maintaining a balanced customer risk profile is important to acquirers, and they do this by limiting merchants whose business model is statistically susceptible to fraud or chargebacks. This can be detrimental to companies in specific industries and if they do find a suitable acquirer, it can mean incurring risk surcharges for accepting cards - in the form of a higher disagio (variable transaction fee) and thus higher costs for payment processing.
This might occur, for example, if a business sells furniture which is bespoke and manufactured following payment. Production time, necessarily, will be several weeks after the purchase. Business models whose performance can be affected by force majeure, such as travel agents, airlines and concert ticket sellers are also viewed critically.
Some retailers will find acquirers put prices up or terminate their contract suddenly because they have realigned their portfolio and changed terms. Again, it helps to have access to a range of acquirers and the added advantage is that the portfolio of the payment gateway used may even include an acquirer with industry specialisation.
There are advantages and disadvantages to both all-in-one and acquirer-agnostic solutions and merchants must select the best option for them.
To reiterate, international retailers or those in specific industries who will benefit from a free choice of acquirer, often know what they need and are rarely influenced by the payment processor. Younger businesses, however, will need to consider not just their short-term payment arrangements, but their long-term and expansion goals too. If a retailer has high transaction numbers, this may increase costs, and it will be advantageous to have access to a range of acquirer options.
We have focused primarily on the acquirer-agnostic approach, but every retail business is different, and the choice of platform will depend entirely on those individual circumstances. Choose wisely to save on costs, support international growth and deliver the best customer experience.
Follow this link to learn more about acquirer-agnostic payments or to discuss your individual solution.
Ralf is the Co-Founder and CEO of the international Payment Service Provider Computop – the payment people, and non-executive Director at Computop, Inc in New York. In 2022, Ralf Gladis was appointed to the Digital Finance Forum, the expert commission of the German Ministry of Finance. Prior to founding Computop, Ralf developed databases, writing books and articles published by large IT editors.
Computop offers local and innovative omnichannel solutions for payment processing and fraud prevention around the world. For ecommerce and POS, retailers, service providers and industrial enterprises can choose from over 350 payment methods. Computop, a global player with locations in DE, CN, UK, US, processes transactions with a combined value of USD 30 bln in 127 currencies.
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