I remember back in the day when money transfers used to be a hassle. It wasn’t as easy as we have it now.
Then, we had to go to the bank very early and sometimes still wait in line for long hours to deposit. But now, it is not the case.
The introduction of digital payments has made it easy to perform bank transfers from the convenience of the sender’s phone using a bank app or USSD.
This payment method has gained widespread adoption by both physical and online stores in Nigeria.
With the repeated inquiry of “Can I pay with a transfer?” businesses have recognised that this payment method is popular with customers.
Some of them now even have the “Pay with transfer” sign displayed in their stores as a prominent payment method.
Though this method of payment has been widely accepted, is it truly a game changer for merchants acquiring? Let’s investigate what merchant acquiring entails and how the Pay with Transfer Service affects them.
What is merchant Acquiring
Merchant acquiring refers to the process through which financial institutions, known as acquirers, provide services to merchants for accepting card payments. This involves setting up the necessary infrastructure for processing credit and debit transactions, including point-of-sale systems and payment gateways.
Acquirers also aggregate and separate those payments and then send them to card issuers, normally via the respective card system networks known as interchange.
Traditional merchant acquiring relied heavily on POS terminals and card payments. This method is effective, no doubt, but it incurs processing fees and delays in fund settlement. The rise of mobile wallets, QR codes, and direct transfers has challenged this system with an alternative model that promises efficiency and saves costs.
According to the Nigerian Inter-Bank Settlement System (NIBSS), the total value of instant payment transactions reached N1.07 quadrillion in 2024, a 79.6% increase from N600 trillion in 2023. That is such an incredible spike. Don’t you think?
Even with this huge growth, the Business Research Company estimates that the market size aims to scale from $25.48 billion in 2024 to $28.2 billion in 2025 at a compound annual rate of 10.9%. Well, this is currently 2025, and we cannot wait for the massive increase and the benefits that come with it.
Oh, and there is also a hint of rapid growth in the next few years. It is expected to scale up to $42.16 billion in 2029 at a compound annual growth rate (CAGR) of 10.6%.
The increasing demand for digital payment keeps propelling the growth of merchant acquisition. With the many advantages that businesses gain from it, adopting efficient payment solutions is no longer an option.
However, even with its advantages, there are still some challenges and limitations involved, which we’ll be looking into soon. For now, let’s explore the benefits of retail and online stores.
Advantages for Retail and Online Stores
Paying with transfer service in merchants acquisition benefits retail and online stores in numerous ways, including increased sales, improved cash flow, enhanced customer experiences, and better security, among others, making it a necessary aspect of modern commerce.
Let’s take a more detailed look at the advantages:
- Global Reach—With merchant acquisition, online stores can accept payments in several currencies. This method facilitates international transactions, expands their customer base, and gives them more global recognition.
- Increased Sales—This model also allows retail stores to cater to a wider customer base and potentially increase sales through the acceptance of several payment methods. You know, customers are more likely to purchase if their preferred payment method is available.
- Access to actionable Insights—Since merchant acquirers provide detailed transaction data, businesses can analyse customer behaviour and preferences. This analysis allows them to make better decisions and develop better marketing strategies.
- Enhanced Security—The vulnerability of online shopping to fraud is at an all-time high, so merchant acquiring is beneficial in this case because it provides security measures to protect both businesses and customers.
- Better Customer Experience—Your customers get to experience hassle-free shopping when they have the liberty to shop and make payments using their preferred payment method. This leads to a better customer experience, which, in turn, can ensure that the shoppers come back for more.
- Faster access to Funds—Pay with transfer service provides merchants with quicker experience and access to their money, compared to traditional payment methods, as bank transfers can be processed faster.
- Increased Cash Flow—With merchant accounts, there’s a rapid payment authorisation. This means that money reaches your accounts more quickly. Sales are usually deposited within one or two working days, as opposed to individually billing your customers and waiting up to 30 days or more to receive payments.
- Greater Control and Flexibility—Merchant acquiring allows these businesses to gain control over the entire payment processing system. This control includes handling transaction disputes and customising payment solutions to meet specific needs.
Now that we’ve outlined some of the advantages let’s move over to the challenges and limitations involved in acquiring a merchant account.
Challenges and Limitations
In as much as this model provides numerous benefits, maintaining a seamless merchant payment system comes with its share of challenges. They include:
- Compliance and Regulatory Challenge—Payment systems must comply with several global and regional regulations such as GDPR, PCI DSS, and local tax laws. For both acquirers and merchants, these requirements can be too overwhelming to handle.
- Integrating Payment Systems—Most times, merchants require payment systems that are multiple-channel supportable—online, in-store, and mobile. However, combining all these systems into one unified solution is difficult and can lead to compatibility problems.
As we can see, the challenges and limitations do not surpass the advantages and benefits, which can only mean one thing—digital payment is truly a game changer for merchant acquiring in retail and online stores. With Pay with Transfer services, customers can initiate bank transfers directly to a merchant’s account with ease.
Meet Banji A. Kayode
The writer, Banji A. Kayode, is a seasoned expert in merchant acquiring and financial technology, with a strong background in payment system infrastructure for banks and major operators. With extensive experience in digital payments, he has played a pivotal role in driving financial inclusion and fostering innovation within the fintech ecosystem.
A recognised thought leader, Banji provides insightful commentary on digital financial services, emerging payment technologies, and industry trends.
Beyond payments, he is a trusted advisor to fintech startups, offering strategic guidance on product development, go-to-market strategies, and regulatory compliance. His deep industry expertise and hands-on approach have helped startups scale and navigate the complexities of the financial landscape.
