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Merchants Just Want to Sell More!

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Some of us payments geeks often lose sight of what merchants really want – they just want to sell more. Selling more stuff is like 10 times more important to them than saving money on their costs of payment acceptance.

Bill Me Later is but one recent example of merchants (online in this case) will to pay more to sell more – and, through the magic of margin, make higher profits on higher volume. BML’s promotional financing was the key to unlocking merchant acceptance – enabling a win/win for both the merchant and BML.

This morning I happened across this blog post about OpenTable (about ready to have its initial public offering). I was struck by the comment that “across 8,090 member restaurants, the average restaurant pays OpenTable $515 each month.” OpenTable helps those restaurants fill their tables – and gets paid accordingly. It’s a very convenient experience for the consumer too – I’ve been addicted to OpenTable since it first launched years ago!

Here’s a question: how does that average of $515/month that OpenTable earns compare to the money the average restaurant pays to its card acquirer? Not the full merchant discount – just the fees net of interchange. What do you think?


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