# It is time merchant acquirers to the extra mile for their customers. But first the sector must learn from its mistakes.  Author: Pal Sinha, Barnali Author URL: https://financedigest.com/author/pal-sinha-barnali Published: 2019-01-16 Category: TECHNOLOGY Category URL: https://financedigest.com/category/technology Meta Title: Merchant Acquiring Industry Challenges: The Flawed Customer Meta Description: Discover the struggles faced by merchant acquirers, from flawed customer engagement to limited success in value-added products, and how they impact the retail URL: https://financedigest.com/time-merchant-acquirers-extra-mile-customers-first-sector-must-learn-mistakeshtml ![undefined](https://prod.superblogcdn.com/site_cuid_cm5qst7v3003gwirgwqtxn8i8/images/it-is-time-merchant-acquirers-tothe-extra-mile-for-their-customers-1736840137743-compressed.jpg) The merchant acquiring industry has doggedly played its role as the provider of payment processing technology and the face of the card schemes to the retail sector.  They have invested in the ever-changing demands of the card issuers in their attempts to secure the payments system and extend their reach into every niche.  Yet despite this effort their engagement with their customers remains flawed.  Retailers will often describe their acquirer in the same terms as [death and taxes; an unavoidable, unloved necessity](https://www.financedigest.com/death-and-taxes-why-you-wont-be-able-to-escape-one-in-the-metaverse.html "Death and taxes—why you won’t be able to escape one in the metaverse").  This is true even where the merchant acquiring relationship is fundamental to the existence of the retailer, for example, in the e-commerce sector. Attempts to make the [payment acceptance](https://www.financedigest.com/why-ev-charging-stations-need-to-accept-open-cashless-payments.html "Why EV Charging Stations Need to Accept Open Cashless Payments ") terminal do more than act as a “\*\*\*\*\*\*\*\*\* expensive calculator”have been made but these efforts, including loyalty programmes and sales of digitised products,have had mixed results.  The delivery of [marketing data](https://www.financedigest.com/sterling-little-changed-after-mixed-labour-market-data.html "Sterling little changed after mixed labour market data") to support decision making within retailer business has also been tried, building on an acquirer’s ability to operate large data processing and communication systems.  Of course, certain value-added products have achieved international success such as Dynamic Currency Conversion (DCC) at PoS and PoS [systems](https://www.financedigest.com/how-to-use-a-pos-system-to-run-your-business.html "How To Use A POS System To Run Your Business?") that support tax refunds for international travellers. So the only widely adopted successes have been DCC, [Tax Refund and arguably trade](https://www.financedigest.com/exclusive-indian-car-makers-propose-tax-cut-on-imports-in-trade-deal-with-britain.html "Exclusive-Indian car makers propose tax cut on imports in trade deal with Britain") lending services.  Attempts to [deliver loyalty programmes](https://www.financedigest.com/financial-companies-delivering-better-value-for-customers-in-loyalty-programmes-compared-to-other-sectors.html "Financial companies delivering better value for customers in loyalty programmes compared to other sectors") and other means of marketing retail businesses based on transaction data have proved challenging to sell to the retail community.  The reasons for this are not complex but they are an obstacle to the acquiring industry being an integral part in business life in 20 [years’ time](https://www.financedigest.com/german-tax-revenues-fall-in-august-for-first-time-this-year.html "German tax revenues fall in August for first time this year"). The primary [challenge acquirers face](https://www.financedigest.com/how-to-overcome-the-challenges-faced-by-women-in-business-4.html "How to overcome the challenges faced by women in business") is that they have the wrong relationship with their customers; they seek to be and are expected to be a trusted servant to their customer and yet impose on them the demands of the card schemes.  For example retailers are forced to accept unfair charge-backs because the [cost of defending themselves is higher](https://www.financedigest.com/uk-pub-operator-wetherspoons-loss-narrows-despite-higher-costs.html "UK pub operator Wetherspoon’s loss narrows despite higher costs") than the benefit of doing so.  Their acquirer should be their ally in this matter, but economics dictate that they end up as the bearer of bad news. In any other field, a supplier of an inherently insecure [service would not be able to charge their customers](https://www.financedigest.com/financial-services-is-upping-its-customer-experience-game.html "Financial services is upping its customer experience game") for the privilege of proving that they have made significant investments to address the insecurities.  If a car manufacturer [charged](https://www.financedigest.com/rocking-down-to-electric-avenue-good-luck-charging-your-car.html "Rocking down to Electric Avenue? Good luck charging your car") you £5.00 a month to prove you’d added a padlock to secure the car because the locks didn’t work you would avoid that make of car.  Of course, there is no choice of retail payment technology due to the necessary but counter-innovative use of the same standard (EMV) and infrastructure for all card [payments](https://www.financedigest.com/fingerprints-and-tag-systems-collaborate-to-offer-contactless-biometric-payment-cards-globally.html "Fingerprints™ and Tag Systems collaborate to offer contactless biometric payment cards globally") irrespective of the card scheme.  Even Silicon Valley entrepreneurs have been forced to ride the rails built by the card payment industry so even they cannot change the system. It is hard for the [retailer to believe that their acquirer is their perfect sales](https://www.financedigest.com/german-retail-sales-dip-more-than-forecast-in-august.html "German retail sales dip more than forecast in August") and marketing partner when it is busily sending undisputable chargebacks, PCI compliance fees and otherwise confounding them with confusing statements. Even the process the acquirer uses to begin a relationship militates against forming trust. Most small to medium high street retailers will have a story about broken promises on pricing, contract terms and services levels, made by [third party](https://www.financedigest.com/why-a-replacement-to-third-party-cookies-is-key-to-post-pandemic-recovery.html "Why a replacement to third party cookies is key to post-pandemic recovery") sales people working on aggressive commission plans.  All too often these promises evaporate.  Given the administration involved in signing up with a new acquirer and the [cost of exiting](https://www.financedigest.com/australias-westpac-flags-950-million-profit-hit-led-by-energy-exit-costs.html "Australia’s Westpac flags 0 million profit hit, led by energy exit costs") the terminal rental agreement, retailers often find themselves locked-in despite rising transaction pricing and fees that were not transparent when they signed the deal. Given the margins in the industry there is no on-going, pro-active interaction between the merchant and the retailer.  This leaves retailers with no connection and very little trust in their acquirer.  In this context why would a retailer rush to their acquirer to help [market their business](https://www.financedigest.com/foolproof-local-marketing-strategies-for-small-businesses.html "Foolproof Local Marketing Strategies for Small Businesses"). However, whilst the acquiring [industry’s approach has created](https://www.financedigest.com/strict-regulations-regarding-hygiene-at-industrial-workplaces-to-create-high-demand-for-industrial-dispensers-persistence-market-research.html "Strict Regulations Regarding Hygiene at Industrial Workplaces to Create High Demand for Industrial Dispensers: Persistence Market Research") problems merchants are also responsible. A small minority of the [retail sector](https://www.financedigest.com/britain-has-10-days-to-save-christmas-retail-sector-says.html "Britain has 10 days to save Christmas, retail sector says") behave in a way that is unhelpful and sometimes fraudulent.  This rightly [leads acquirers](https://www.financedigest.com/hospital-acquired-infection-control-market-global-leading-companies-analysis-revenue-trends-and-forecasts-2027.html "Hospital Acquired Infection Control Market Global Leading Companies Analysis, Revenue, Trends and Forecasts 2027") to assume a risk in all new customers for fear of taking on losses that are hard to bear and sometimes have serious regulatory and compliance consequences.  The retail [sector has also been focused on negotiating down the price for the service](https://www.financedigest.com/why-the-financial-services-sector-could-thrive-in-the-subscription-economy.html "Why the Financial Services sector could thrive in the subscription economy") to the point where there is little room for acquirers to do much more than they do today. If today’s acquirers are to move beyond their unloved role in the [card payments](https://www.financedigest.com/fingerprints-supports-two-more-biometric-payment-card-launches-in-the-mena-region.html "FINGERPRINTS’ SUPPORTS TWO MORE BIOMETRIC PAYMENT CARD LAUNCHES IN THE MENA REGION") model they must consider the relationships that they have with their customers. I look forward to the day that a major acquirer steps up and [offers a sensibly priced](https://www.financedigest.com/online-brokerage-robinhood-jumps-29-to-surge-past-offer-price.html "Online brokerage Robinhood jumps 29% to surge past offer price") service with no PCI compliance fees, clear pricing and a 30 day termination clause for terminal rental and to retailers that understand that you get what you pay for.  It may [well be that kind of radical change that would allow them to sell value-added services](https://www.financedigest.com/uk-says-baker-hughes-altus-deal-may-hurt-competition-in-oil-well-services.html "UK says Baker Hughes-Altus deal may hurt competition in oil well services") to those retailers for many years to come. --- This blog is powered by Superblog. Visit https://superblog.ai to know more. ---