• Marc Docherty, Head of UK Acquiring / Large - Strategic Business at Worldline


• 22.03.2022 03:45 pm
#eCommerce

With the advent of e-commerce, new ways of purchasing things have quickly turned into fresh requirements, demands and challenges for stakeholders. As the payment market has evolved, so too has the process of merchant card acquiring, which traditionally is characterised with a segmentation into two specific categories:

• Local acquirers (usually banks) which tend to have strong capabilities in their own domestic markets, at competitive prices, but are often not equipped to service the international market

• International acquirers which are often not as competitive on prices but have a far broader coverage of international payment methods

For those who select the local acquirer route, penetrating new markets often means having to negotiate and forge relationships with multiple acquirers. This process, paired with the challenge of managing these relationships is time-consuming and often not sustainable as it adds operational

constraints and a need for more resource. In addition, merchants with ambitious expansion strategies tend to experience other issues such as extended time-to-market, presenting the risk of

competitors pipping them to the post.

That said, merchants who choose to work with international acquirers may receive broader coverage but also experience heightened costs and potential unsuitability for certain markets where the scale of the business isn’t sufficient enough. 

But now, merchants are increasingly taking advantage of a new, innovate solution that is far better suited to their needs by offering a unique and bespoke blend of all the benefits of both acquirer categories.

Enter à la carte acquiring.

À la carte acquiring presents merchants with a much-needed, bespoke solution, and is the result of rapid and continued evolution in the payments sector. Designed to reduce costs while improving visibility and management, this accelerating payment alternative is putting the best of both worlds on the menu, via one alternative option. When this model is used in combination with the right guidelines, it can help to create a far more efficient way of generating revenue and reducing overheads.

Until now, it has been all too easy for merchants to become caught in the trap of trying to juggle multiple acquirer options whilst being penalised with increased management costs.  The introduction of an à la carte option allows merchants to eradicate this dilemma and get the best of both worlds, by accessing the best, customised combination of acquirers through a single omnichannel gateway.

The possible combinations are many and might include connecting to a range of local acquirers, allowing access to local schemes and pricing, or connecting to one single, international acquirer with a wider reach. Thanks to the single gateway’s smart routing system, transactions are simply sent to the most relevant acquirer based on the parameters agreed with the merchant. Meanwhile, all transactions are reconciled into the gateway’s reporting features.

Ultimately, the à la carte acquiring approach allows merchants to better match the acquiring solution with their individual needs. In international markets where their revenue is high, they need access to local banks and local payment schemes to be able to take advantage of lower fees. However, for smaller jurisdictions where volumes aren’t as high or are growing, then an international acquirer route is the preferred modus operandi. Through an à la carte acquiring strategy, large merchants in multiple markets can accept a variety of standard and local payment solutions without the disadvantages of excessive acquiring costs. Meanwhile, domestic players can accept a wider range of payments from their broader customer base leading to improved sales.

But the benefits don’t stop there. Alongside the prospect of improved sales, an à la carte approach enables greater financial reconciliation as it provides one single solution for monitoring transactions. This, in turn, allows the merchant to identify whether a transaction submitted to acquirers has been paid, obtain an aggregated view of the status of transactions, including chargebacks, and get a clear overview of the fees paid. This also enables merchants to establish whether the fees applied by acquirers are correct. 

The payments landscape continues to change at pace. By following the à la carte acquiring model, merchants have an opportunity for greater choice and control. Furthermore, they gain the prospect of saving significant amounts of money in the long term from operational costs, as this model encourages and implements a more focused use of resources towards the most critical areas of business continuity. 

Please see the link to see more about Worldline’s acquiring solution