Payments Ecosystem Simplified
When people hear that Halo Dot provides technology that turns a mobile device into a point of sale device, they ask where they can sign up? They want to use our solution to accept payments for their business. The thing is whilst we do provide the solution to these merchants, Halo Dot is a B2B company and therefore does not provide the solution directly to merchants.
The payment ecosystem is made up of merchants, payment facilitators, ISO’s, TPPP’s, aggregators, etc. We at Halo Dot ask the following to distinguish between them.
1. Who own’s the relationship with the acquirer?
2. Who handles onboarding and KYC of the merchant?
3. How are funds settled?
First off, we have the Merchant
Now this isn’t a small and medium-sized enterprise (SME), this would be a large-scale merchant with multiple large outlets. The keyword with regards to this merchant is “direct”.
This merchant is large enough to interact directly with the acquirer and is issued with a merchant ID (MID) directly. They are onboarded directly with the acquirer and the acquirer handles the KYC process. All funds are settled by the acquirer to the merchant directly.
The second player is who we call the Aggregator
The keyword in this relationship would be “owns”.
The aggregator stands between the acquirer and several sub-merchants. In this instance, the aggregator owns the relationship with the acquirer and is issued with one merchant ID by the acquirer. They onboard and perform KYC on their sub-merchants, the acquirer does not have a relationship with sub-merchants.
The acquirer settles all funds processed by all sub-merchants into the aggregators account – therefore the aggregator is responsible for settling with each sub-merchant separately.
Finally, we have the Independent Sales Organisation (ISO) or the Third-Party Payment Processor (TPPP)
The keyword for this player is “facilitate”.
These parties facilitate the relationship between the acquirer and the merchant. Each merchant is issued with their own merchant ID and are not considered sub-merchants of the ISO/TPPP. The ISO/TPPP facilitate all onboarding and KYC with the acquirer, meaning the merchant doesn’t interact with the bank directly. With that being said, all funds are settled directly into the merchant’s bank account by the acquirer.
If you are one of these, and would like to offer our solution, contact us for further information.
