What is payment card aggregation and how does the model operate?
Payments
Asked by Question Bot01/Nov/20141 answer
1 Answer
F
Faisal Khan
Answered 01/Nov/2014
Payment card aggregation are essentially PSPs who process payments for merchants who otherwise don't have the traditional acquiring relation with the card issuer. Such traditional acquiring methods are the face-to-face (physical) card acceptance, Mail Order/Telephone Order, etc.
The original card aggregation method consisted of e-commerce payments only, now with the ever expanding horizon of what an e-payment is, card issuers have expanded that definition to include all other methods of accepting card payments (beyond the traditional website platform). Think Square like devices.
With a large enough model, payment aggregators can get better wholesale acquiring rates from card issuers. How risk models are defined on the baseline rules and funds disbursement, that is left to the payment aggregator to do so, so they can have more risk and financial control. A good example of a payment aggregator would be Braintree (company).
It would be noteworthy to mention, that payment aggregators can work with multiple acquirers to be able to offer the whole spectrum of card (and bank) payment solutions to their merchants.
Their method is simple enough. Wholesale pricing model, that is then individually retailed to merchants (with ease of access, compliance, risk management, support, integration, etc.)
However, this must not be confused with micro-payments which in itself is a whole different set of challenges that each PSP/Acquirer is trying to address.
The original card aggregation method consisted of e-commerce payments only, now with the ever expanding horizon of what an e-payment is, card issuers have expanded that definition to include all other methods of accepting card payments (beyond the traditional website platform). Think Square like devices.
With a large enough model, payment aggregators can get better wholesale acquiring rates from card issuers. How risk models are defined on the baseline rules and funds disbursement, that is left to the payment aggregator to do so, so they can have more risk and financial control. A good example of a payment aggregator would be Braintree (company).
It would be noteworthy to mention, that payment aggregators can work with multiple acquirers to be able to offer the whole spectrum of card (and bank) payment solutions to their merchants.
Their method is simple enough. Wholesale pricing model, that is then individually retailed to merchants (with ease of access, compliance, risk management, support, integration, etc.)
However, this must not be confused with micro-payments which in itself is a whole different set of challenges that each PSP/Acquirer is trying to address.