In an age when ISOs are ever more keen on differentiation – by marketing special products and services that distinguish them from competitors – certain obstacles frequently stand in the way. Chief among them, according to Planet Group Inc. Vice President of Sales Mark Spurgeon, are the ISOs' ties to the acquirers and processors that help facilitate and oversee their merchant partnerships. Such relationships typically place significant limits on an ISO's flexibility in offering things like new products, modified interchange rates and tiered pricing.
Planet Group tackles this problem by providing a back-end acquiring platform, called Acquire360, that allows ISOs to run their entire back-end operations without the help of a processor, according to Spurgeon.
"We're giving ISOs the opportunity to become their own processor," Spurgeon said. "There are financial reasons for doing it and control reasons for doing it. They can control their own destiny, as opposed to being another client of the processor."
He noted that the latest trend in acquisitions is that processors are staking claims in the acquiring realm by purchasing companies that sell processing services to merchants.
Spurgeon emphasized that such companies are no longer pure processors. "They're acquirers and processors at the same time; they've become acquirers themselves,” he said. He added that this can be detrimental for ISOs because processor/acquirers are now competing directly with the ISOs receiving services from them.
According to Spurgeon, ISOs that want to make changes to their processing services, such as their pricing schemes, typically face a drawn-out timetables and rigid controls. "Acquire360 gives them the ability to gain control of their own system," he said. "So normally if you want to make a change or differentiate yourself or do something different, you either can't do that or it takes years. Our software is very flexible; you can do different pricing schemes and pricing more quickly than if you're just a customer on another system."
Spurgeon said Planet Group's pricing benefits include offering fixed-cost as well as variable-cost processing, giving merchants the option of keeping their costs constant regardless of transaction volume. "As their transactions grow, this allows them to budget in a fixed model, with the ability to pay within certain tiers," he said.
Spurgeon added that Acquire360 offers an array of flexible pricing options catered to the distinct needs of each merchant. One such option is the use of reserves whose stipulations depend on sophisticated criteria.
"The big thing ISOs are looking at today is managing risk, and we give them the ability to do sophisticated reserve management," he said. "If you want to bring a client on, maybe they don't have the best credit or have higher risk. … We've come up with a more sophisticated way to do it in an automated way with different criteria built in." He added that this “gives them more flexibility” in how they use reserves.
Spurgeon noted that another benefit is the ability to explore every possible way merchants can save money by categorizing their transactions to qualify for lowered interchange. "We have interchange optimization, and we think we do that better than anyone in the world," he said. "We enrich the data – the way we edit and critique transactions may qualify them for better interchange. We have the ability there that other processors might not have."
Acquire360's other features include auto-reconciliation and balancing, and a comprehensive merchant and ISO reporting suite. Spurgeon said the in-house software is used largely by Super ISOs, but that a cloud-based Acquire360 is available for small and midsize ISOs as well.
Spurgeon added that Acquire360 can cut an ISOs operational costs and yield higher returns to an ISO. "The value of having their own system, as opposed to being on someone else's, is having a higher market share," he said.
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