Processors Bid for Small Merchants’ Business on New Auction Site
Jan. 7, 2013
A former Bank of America and First Data programmer recently launched a Website that enables merchants looking for credit-card processing services to choose from competing bids to secure the best rate offered. Genes Lim, the founder of MerchantBidding.com, told CardNotPresent.com he devised the auction Website after two decades of developing risk and chargeback solutions for back-office processing systems left him with a very good feel for what ISOs and agents were charging small businesses for credit-card processing.
“Having been exposed to the financial side, I know how much the agent is making. I cut the check for them,” Lim said. “The primary service that MerchantBidding.com provides is to take the guesswork out of the process—disclosing all of the rates and fees upfront so that the merchant can feel confident they have the right information to make an informed decision about the processor they choose to sign with.”
The service is free for merchants. MerchantBidding.com earns revenue from charging the ISOs and agents a fee to bid for the small businesses that come to the site—in essence, providing a highly qualified lead. Lim is trying a few different pricing models for the ISOs and agents competing for business. They can pay a flat fee of $35 per month if they feel they will sign clients quickly or, for ISOs and agents worried about the quality of the leads the site is generating, they can pay $200 for a lead resulting in a closed deal or structure the deal as a revenue share between the service provider and MerchantBidding.com. Either way, Lim noted, with the cost of acquiring a new client in the traditional way averaging around $350, merchants and processors should benefit from the new site.