The Benefit of using an Internet Payment Service Provider (IPSP)

How does a merchant benefit from using an IPSP over obtaining their own merchant account?  

First, let's define what an IPSP is.  An IPSP is a company that enters into agreements with banking institutions and is approved by Visa to process and settle transactions on behalf of online merchants. Epoch is an IPSP and Visa defines Epoch’s clients as Sponsored Merchants.

There are many different types of merchants ranging from service industries to big box retail stores.
Merchant types are identified by their Merchant Category Code (MCC) and card associations have different sets of rules for various categories.  Some categories are considered to be of higher risk than others, such as travel industry purchases (5962), and outbound telemarketing (5966), and inbound teleservices (5967).  Internet purchases are also labeled "card-not-present" transactions, which, further complicates the risk of accepting payments online.   

The acquiring bank's assessment of the risk can affect whether they are willing to do business with the merchant at all,  the interchange rates that they offer the merchant, and any holdbacks or other risk-mitigation costs that they deem applicable. 

“High Risk” merchant accounts can be difficult to obtain and are more expensive than other categories.  The acquiring banks require substantial reserves that may not be returned to the merchant for many years.  As a sponsored merchant processing with Epoch, you are not required to maintain a reserve or security deposit, perhaps the only IPSP that does not hold back your funds.  Moreover, individual merchant accounts cannot offer the full range of premium features that Epoch does, and do not include complete back-end affiliate tracking and transaction cascading systems (for secondary and alternative processors).

Perhaps most importantly, Epoch’s clients receive the benefit of its risk management department, 24/7/365 customer call center and 24/7/365 merchant support for no additional fee.  The team at Epoch constantly monitors each clients’ portfolio to ensure that their accounts remain in good standing with the card associations.  We do this at the granular level of each product option offered, not just on a portfolio or site level. 

The cost for a merchant to recreate these services would be substantial, and if a merchant is unable to remain within card association guidelines for consumer disputes it risks being permanently banned by the card associations from accepting credit card transactions.

Since 1996, Epoch has specialized in processing online transactions and has amassed an enormous amount of transaction data which helps us to continually refine our systems, ensuring that we serve both our merchants and their customers with the highest level of service.  

To learn more, visit us at Epoch.com.