Merchant Acquisition Challenges and Essentials

Merchant acquisition is an essential part of the payment space. It's the beginning of the relationship between merchants and payment providers. There are many challenges that payment providers need to address to succeed at merchant acquisition.

Overview of Merchant Acquisition

Globally merchant acquisition accounts for a massive industry in the tens of billions of dollars. With the rise of so many cashless payments, it has become more critical than ever that payment processing is readily available to merchants. Many merchant acquirers are gearing their services more and more to small and medium-sized businesses

Merchant Acquisition Essentials

To succeed at merchant acquisition, a payments provider must assist the merchant with every step of the payment process. First, a payment provider needs to provide the merchant with their own merchant account. This requires identity verification and underwriting, which can often be time-consuming. 

Guaranteeing settlement is central to merchant acquisition as merchants need to be sure they get funds from the transactions they accept from customers. The payments provider will also be responsible for working with all the necessary parties to resolve chargebacks when they do occur. 

They also need to ensure they have appropriate measures to prevent fraud from occurring. This often means that their payment services need to be PCI compliant. Some acquirers have invested heavily in creating systems that can work for more high-risk merchants. A merchant acquirer also needs to be able to provide customer service that assists merchants with any problems that arise with their payment system

Merchant acquisition requires acquirers to have effective relationships with banks and card networks to ensure security and smooth transactions. Additionally, many have found success using transparent pricing with merchants. This allows merchants to easily see and understand what fees they have to pay without doing much research themselves. 

How Merchant Acquisition is Changing

With the payments space as a whole, the nature of merchant acquisition has changed dramatically in recent years. The rise of e-commerce and a wide variety of payment methods have all changed how merchant acquisition needs to be approached. 

Another significant development is the willingness of small merchants to begin processing cashless payments. Customers prefer these payment options over cash more than ever, and new payment innovations make it relatively easy for small merchants to accept these forms of payment. There has also been an explosion in retail merchants as the rising population and urbanization globally have dramatically increased retail demand. 

Integrations and additional services have seen merchant acquirers move past just providing payment solutions. Merchants can now access various services and integrations that maximize the potential of almost every aspect of their business.

Prominent players in merchant acquisition have also had to expand their scope overseas. Emerging economies are immense sources of merchants in desperate need of payment solutions for modern business. Merchant acquirers also need to facilitate a significant variety of payment options as consumers have access to so many payment options beyond simple debit or credit transactions

Challenges Looking Forward

In the near future, merchant acquisition will likely impact more significant economic trends. As inflation rises and consumers spend less, merchants will see lower transaction volumes, cutting into the profits of merchants and merchant acquirers. Rising inflation can make fixed fee pricing for credit card processing much less profitable. Interest rates rising will hurt merchants that no longer have easy access to capital to cover costs and invest in growth. 

This will lead to merchants reevaluating their costs, and merchant acquirers with high processing costs will likely see more customers leaving their service for cheaper options. Lack of wiggle room for merchants with credit could also make many less reluctant to change their payment system and deal with the transition's costs. 

Addressing Challenges of Merchant Acquisition


Merchant acquirers can provide tremendous value to merchants besides payment processing. Providing various integrations for merchants to choose from a payment provider makes their service much more helpful. The more a merchant depends on their payment provider to run everyday business operations decreases, the more likely they are to change providers, as it's much more costly. 

Customer Retention

Pricing is one of many factors determining whether a merchant will leave their payment provider. Providing excellent customer service to merchants is a great way to ensure customer retention in a more challenging economy. Payment providers must work to make their customer service proactive and not just reactive. This saves both them and their merchants a ton of time

Maximizing Onboarding 

Merchant onboarding can be an incredibly complicated and time-consuming process. Emphasizing automating and streamlining onboarding is an excellent way for merchant acquirers to stand out from the competition and make it easy for merchants to get their payment solution without additional stress. 

Partnering with Software Vendors

Building out useful integrations for merchants is not always possible for payment providers. Fortunately, many payment providers have forged partnerships with software vendors. These allow payment providers to include additional software with their payment systems. Customizing the software is huge for merchant acquisition as merchants can create a personalized approach for their business. 


This is another innovative strategy for merchant acquisition. Some payment providers have customized their services to meet the needs of a specific type of merchant. This allows them to make their service more appealing to these merchants. While this means they cannot appeal to a larger group of merchants, they can succeed more in a specific industry. Specialized payment services also increase customer retention as the merchant deals with a payment provider with custom-made solutions for their business. 


With so many payment options available, payment providers must offer these to merchants. This requires providers to update their systems to include new payment options constantly. Lacking payment option flexibility will hinder merchant acquisition, as merchants must offer their customers as many payment solutions as possible. 

Role of Fintech in Merchant Acquisition

Fintech plays an essential role in merchant acquisition by developing various innovations that impact payments. These can range from customer service solutions to onboarding automation and KYC protocol optimization. Fintechs are a source of disruption and opportunity within financial services. Payment providers should keep tabs on the innovations created by various fintechs. 

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