This guide has everything you need to know about Payment Processing Aggregation. Whether you are a High Risk Merchant or not, but need to understand Aggregators, you’re at the right place.
Merchant Aggregator versus Direct MIDs
A MID (Merchant ID) is given by the Acquiring Bank. When merchants receive their own MID they work directly with a Payment Provider/Bank. This is important because in this scenario it is the Bank that decides to accept or decline the merchant. It shouldn’t be a reprise but Banks stay on a conservative side.
In the case of Merchant Aggregation, it’s the Aggregator that gets a MID from an Acquiring Bank and then collects several merchants under this MID umbrella. This means that the merchant is largely invisible to the Bank and the Aggregator is the one doing due diligence, ultimately deciding to accept or decline.
Types of merchant processing Aggregators:
Behemoth Aggregators: PayPal, Square, Stripe, Amazon Payments, etc. These board very large number of merchants every day, they are easy to work with: you can open an account and start credit card processing the same day. Behemoth aggregators were created for startups, and small to medium size businesses that don’t have large volumes.
High Risk Aggregators: this type of aggregator is created specifically to hide very High Risk merchants behind their umbrella MID.
Guidance for High Risk Merchants:
If you are a small, under $200k annual volume merchant, you can fly under the radar of Stripe and the like. I’ve known high risk guys happily processing with PayPal or Stripe for years, it’s fairly easy to slip through the cracks and stay processing.
However if you:
- the business, or the owners will not pass the initial due diligence review
- have been placed on a TMF/MATCH list
- or you are so blatantly High Risk that you are ‘Radioactive’
then you still have a chance to get credit card processing through a High Risk Aggregator.
Keep in mind that Aggregators charge higher rates. Behemoths offer flat fee or at least very well documented tiered pricing. Yes, they will charge more, but they won’t rip you off. High Risk Aggregators – merchant beware, they know they are your last resort and they will take advantage of it by charging the highest credit card processing rates. Because they CAN….
Things to keep in mind before signing with a High Risk Aggregator:
- How long they’ve been in business and does it look like they will stick around
- Reputation (check the reviews)
- Try to find out who and where their Banks are
- Test their customer service
- Which credit cards they take. How about alternative payments?
- Ask about IT integration
- Negotiate your rate
AllRates works with a few Aggregators in the industry. Go ahead and submit the form, we will let you know if we can help.