Catering to the Small Merchant
Credit Card Management (10/00) Vol. 13, No. 7 p.79; Hisey, Pete

To maintain the profitability of the merchant services industry, acquirers are going to have to offer the merchant more services at value prices, particularly high-tech capabilities designed specifically for small merchants. NXT, an aggregated service provider, launched, which lets merchants browse through service offers, choose services they want, then receive an instant bid from an independent sales organization (ISO). MerchantPoint also offers ISOs a more affordable and comprehensive method of signing up new merchants, by contacting an ISO in an appropriate geographical area to deal directly with merchants who have requested services. NXT also provides a service for merchants that directs all American Express charges directly to AmEx, cutting out the add-on fees charged by ISOs and bank card processors. While the ISOs initially lose money from the sidestepping of the fees, they gain market share, the ability to up-sell customers, and the chance to forge long-term relationships based on the ability to provide an ever-increasing selection of services. New services include specialized daily news content, 24-hour dedicated customer service, and ancillary products. Other ISOs are going it alone, offering Web site production and maintenance.

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