Banks Tap Merchant Services to Secure Customer Primacy

Watch more: Banks Leverage Merchant Services to Win Deeper Customer Relationships

The banking industry, perennially in flux, must modernize legacy systems while navigating an increasingly competitive landscape. It’s a bit like changing the tires on a moving car.

Even in 2025, financial institutions are still striving to fully execute digital strategies initiated years prior, harnessing nascent technologies such as artificial intelligence, embedded finance and cryptocurrency strategies. They’re battling nimble FinTechs and digital disruptors. In this environment, banks are compelled to re-evaluate fundamental business approaches, particularly in areas traditionally viewed as ancillary.

“Change is the only constant,” Maverick Payments Vice President of Strategy and Bank Partnerships Kyle Becker told PYMNTS, “and banks always have to grapple with how they can stay current and make sure that they have earnings and shareholder returns.”

Faced with fluctuating interest rates and macro-level economic factors, banks are increasingly seeking stable, non-interest income streams to bolster their financial performance. Becker emphasized that while the basic focuses of financial institutions — customer acquisition, customer service and offering products supporting a strong balance sheet — remain unchanged, the approach to payments is evolving.

“From my seat here at Maverick, I have a keen interest on the bank’s payment strategies and helping them see payments not just as a utility, but really something that can be monetized and used as a competitive advantage when acquiring and cross-selling banking products to their customers,” Becker said.

The positive knock-on effect is to attract new clients who then start to reinforce the deposit structure and obviously the funding structure of the bank itself in what might be termed a virtuous cycle.

Targeting Primacy

A critical objective for financial institutions is achieving customer account primacy. Becker defines this as “owning the full deposit, the full lending, treasury and payments relationships with their customers.”

Banks are actively battling for this coveted position, recognizing that comprehensive relationships foster deeper loyalty and revenue opportunities.

Understanding the evolving needs of their merchant clients is paramount. Small businesses, Becker said, exhibit diverse financial needs but consistently seek a bank they can trust, one that provides quality care and guidance, and ideally, functions as a “one-stop shop where all their financial needs live under one roof,” he told PYMNTS.

Historical studies reveal that small businesses often maintain two to three financial institution relationships for various needs, Becker said, because they can’t really get all of them right at one spot.”

Merchants’ most pressing needs revolve around cash flow management. Beyond merely accepting payments, merchants also require insights into their portfolio’s activity, including authorization and sales activity trends, chargeback trends clearing and settlement status, he added.

The banks themselves can benefit through a holistic approach that cuts down on external referrals.

“I firmly believe that a relationship referred is a relationship lost,” Becker said. “Too many banks have referral programs when it comes to merchant services and they send their small business customers to a third-party telephone number or a third-party website, and that customer journey then exists outside of the bank or the financial institution,” which truncates cross-selling opportunities.

Maverick Payments positions itself as a strategic partner designed to bridge this gap.

“At Maverick, we enable banks to offer these payment services to their customers right at the point of contact,” Becker said.

Whether a retail client requires point-of-sale (POS) solutions or an eCommerce merchant needs payment gateways, Maverick’s platform also provides cash flow management tools for merchants, through what he describes as a “turnkey white-label, API enabled solution that can be implemented and integrated in a very short period of time.”

The white-label solution provides a comprehensive back-end system, allowing banks to collect merchant data, he says, which in turn informs merchant underwriting and merchant risk monitoring.

For banks, the benefits are substantial: the ability to serve customers at the point of contact, eliminating lost referrals, an out-of-the-box branded solution, fast speed to market, and significant technology cost savings.

The integration of merchant services through a white-label partnership serves as a catalyst for cross-selling and deepening customer relationships.

Becker describes this as a “customer primacy graduation strategy,” adding that “if you’re starting out with traditional deposit products and you flip and you feather in merchant services … that might grow into a credit or lending relationship for the institution.”

Becker noted that “low- to no-cost deposits present themselves on the bank’s balance sheet by way of merchant operating accounts, funding accounts, as well as merchant reserves accounts.” For banks that historically have high concentrations in interest-bearing deposits, these low-cost deposits help bolster net interest margins.

As Becker put it, “If you have a full stable and full offering of products and services to service that small business client, it deters them from having those two to three to four banking relationships. And you can have that customer primacy … The top line and bottom line benefit for financial institutions is stark and it’s real. And it’s a nice way for them to diversify their income statements.”