POS Aggregator term was recently used in FIAKS community and confused many seasoned bankers and fintech professionals. We realised that this is latest buzzword and was extensively discussed and debated in FIAKS community of CEO/ CXO bankers, fintech, payments & ecomm professionals. Finally we could get following as a definition of POS aggregator
Let’s first understand few fundamentals terms before we get into understanding POS aggregator.
What is BIN (Bank Identification Number)?
As per FIAKS Community experts bank identification number (BIN) is the first four to six numbers that appear on a card. The bank identification number uniquely identifies the institution issuing the card. The BIN number helps in matching transactions to the issuer of the card. The card can gift cards, debit cards, prepaid cards etc
What is Master Merchant?
As per FIAKS Community experts, Under this arrangement merchant sourcing is done by POS Aggregator directly and merchant risk is borne by them unlike merchants acquired directly by Bank for POS where risk will be borne by Bank and only terminal sourcing and field support to taken from terminal vendor.
What is POS AGGREGATOR?
POS terminal issued by a company has a proprietary software which supports onboarding of multiple acquiring BINs (of different acquiring Banks) on a single Terminal. Big Retail outlets like Big Bazaar, Shoppers Stop, Lifestyle etc normally use such POS Terminals as Issuer Specific offers which are typically linked if the Card is swiped on their own terminals is taken care by this technology
To the merchants the POS terminal company pitches that it will route the transaction through the acquiring BIN of the Bank charging minimum MDR.
This can offer company to use its discretion to route majority of transaction through its preferred Acquirer.
As per FIAKS Community experts in Banking, Fintech,payment & e commerce many POS terminal providers today don’t have the functionality of hosting multiple BINs on a single Terminal. Pine Labs can be termed as POS Aggregator
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