Bankers weigh in: Expanding merchant reach and protecting primary relationships

Payments innovation is accelerating, and that’s creating a new competitive reality for business banking. Non-bank providers often start by winning the merchant account, using that foothold to cross-sell lending, deposits and other financial products. For banks, merchant services is no longer an “add-on.” It’s a relationship-protection strategy, a fee-income engine and a way to keep business clients anchored to the bank.

We recently sat down with three banking leaders actively rebuilding and scaling their programs to explore their insights, ideas and challenges. Here’s what they had to say about program structures, how to build a more lucrative merchant strategy and how the right partnership can help accelerate results.

Why merchant services now sits at the center of commercial relationship strategy

Across community and regional banks, a common pattern is emerging: institutions that treat merchant services as a core part of their commercial offering are better positioned to defend relationships, improve client experience and grow non-interest income. Savvy business bankers are moving away from a “credit-only” mindset towards a whole-bank approach, prioritizing discussions on how their business clients accept and send payments as early as lending and onboarding conversations.

While our panel of banking leaders represented different program designs and bank footprints, they shared the same three themes:

1. Merchant services must be embedded into banker workflows.
2. Incentives and training drive adoption.
3. Scalability depends on a partner with deep expertise, strong service and the right integrations.

What to stop: Strategies that no longer work

With the speed of financial services evolution, there’s a lot for business bankers to unlearn. The market has moved beyond a “set it and forget it” merchant offering, and banks that treat merchant as a sidecar to lending risk losing the relationship to competitors.

1. Stop separating credit conversations from payments conversations

“We’re focusing on no more credit-only type of clients,” shared Steve Pentony of Peoples Bank. “We have to sell the whole bank.” Credit and payment conversations are going hand-in-hand, and banks are seeing better outcomes when lenders and treasury teams ask early: How does the business accept payments? How do they pay vendors? Where are there friction points?

2. Stop competing on price alone

“In the last five years, our focus has shifted away from price,” shared Jessie Denny of TowneBank. “Price is still important, but the focus has turned more towards integration and operational efficiencies — like what systems we can offer that will make their businesses run better.”

Merchants increasingly choose providers based on integrations, operational efficiency and how well solutions fit their workflows.

3. Stop relying on a “rudderless” merchant motion

Without a clear strategy, even strong products won’t gain traction. For Shane Patnoi of Washington Trust Bank, experienced guidance is also critical as he works on restructuring his bank’s merchant program.

“We needed a concrete merchant strategy, and that starts with incentivizing the right behaviors,” Patnoi explained. “You may have the best product or offering, but if your bankers aren’t incentivized to do something, they're not going to do it. We also didn't really have a north star for where our merchant program was going. We needed to find a partner that could help us with our strategy and build for the long haul.”

What to start: Building a lucrative merchant services program

After sharing what they’ve stopped doing, our expert bankers shared what they’re focusing on next to stay relevant in today’s evolving market:

1. Make merchant services part of go-to-market, not an add-on

Merchant growth follows awareness and repetition. This means consistent training, simple opportunity-spotting guidance and quick-reference materials so frontline teams can confidently identify needs and route opportunities down the right path.

“Make it part of your go-to-market strategy,” Pentony shared. “It can't be an add-on. These are your products. Own them and use the resources your merchant partners offer to learn more about them.”

Another practical reframe: Encourage treasury teams to move from “treasury specialists” to “payment specialists.” Core treasury tools are table stakes; deeper conversations about how businesses accept payments (card-present, eCommerce, invoicing, mobile) and how they want funds delivered are where banks can add value and win fee income.

2. Weave merchant conversations into all steps of the journey

Merchant opportunities are easiest to capture when they’re built into existing bank motions, like new account onboarding, periodic relationship reviews and credit/treasury conversations.

“We know that every business takes payments in some way,” Denny explained. “So, how can we help with that in the onset of onboarding a relationship?”

Teams have to ask questions consistently, not only when a merchant explicitly requests it. For example:

• How are you accepting payments today: in-store, online and by invoice?
• What systems do you rely on (POS, ERP, eCommerce platform) and where are the friction points?
• Are you getting funds as fast as you need? What would faster funding change for your cash flow?
• When was the last time you did a rate review or a full payments comparison?

3. Align incentives and leadership support to drive banker participation

According to Patnoi, banker behavior follows incentives.

“That was our first step [in rebuilding our program],” he explained. “Changing the incentives across the bank for our commercial team, our small business team, our in-branch bankers… everybody has to see some fruits of their labor.”

When merchant services is explicitly called out in goals, merchant becomes part of the culture instead of a niche specialty — especially when commercial teams, branch teams and treasury teams all share in outcomes. Examples include: 

• Shared revenue goals: Tie merchant revenue targets to treasury management and banker scorecards, not just a standalone merchant team.
• ROI mindset: Use merchant fee income as part of relationship profitability discussions, supporting credit hurdle rates.
• Recognition programs: Layer in short-term promotions and top-performer recognition to sustain momentum.

4. Don’t overlook micro-merchants

Commercial wins matter, but SMB and micro-merchants are a large share of the market and a major source of relationship “stickiness.”

“We don't just go after a loan or after a deposit,” Denny continued. “We train our bankers to look at individuals and businesses holistically. Rather than thinking of it as a sale, we think about how we build this relationship and make it stickier.”

Success starts with simplified offers designed to compete with easy-entry providers while keeping the relationship with the bank. For example:

• Create a simple SMB package: Straightforward pricing and an easy onboarding path for smaller merchants who don’t want a long consultative cycle
• Stand up a small business “desk”: A team or queue designed for higher-volume, faster-turn opportunities
• Bundle to win the whole relationship: For example, pairing merchant adoption with preferred treasury pricing can increase adoption and deepen the operating account relationship

5. Find a partner you can grow with

Even banks with strong commercial teams rarely want to build every merchant capability in-house. That’s why the right partner can help reduce attrition, improve the merchant experience and assist the bank in scaling coverage across regions and segments without sacrificing service quality.

“We absolutely needed a partner that could help us with the hybrid model strategy and build for the long haul, which we did not have before,” Patnoi shared. “Because we’re in the infancy stages of this relationship, we're just starting the conversion now. We didn't have a north star with where we were going with merchant services, and I think we do now.”

When issues arise, banks need a partner that answers the phone, resolves problems quickly and supports a bank-branded experience. Visibility into data and analytics should be a must-have as well, as performance and attrition signals help banks intervene earlier, avoiding any bad blood or lost accounts.

“With our prior processor relationship, a lot of time was spent being reactive,” Denny shared. “We had a lot of servicing issues, and our processor didn’t culturally align with how the bank operates. We're in the newly wed phase with Deluxe, but the true partnership and collaboration is there. Having a partner who has knowledge and actually answers the phone has been a game changer.”

An integration-first mindset is also crucial when picking a partner, as merchants expect solutions that fit into how they run their business and how they bank. For banks on Q2, it’s vital to find a partner supporting integrations that allow merchants to access key information through the online banking experience, helping keep the client journey consistent and reducing friction for day-to-day servicing.

“I'm a big believer of use fintechs, but I want to have the client experience seem whole,” Pentony explained. “We’re a Q2 bank, so integration with Q2 is a big piece that I look for in a partnership.”

Partnerships are the multiplier

Deluxe Merchant Services helps financial institutions design, modernize and scale merchant programs — whether you’re refining an agent model, standing up a referral motion or moving to a hybrid structure. If you’re evaluating your current program’s health or building a plan to grow fee income while protecting commercial relationships, Deluxe can help you map the strategy and execute the transition.

Note: This blog was based on a panel conversation held at Deluxe Exchange 2026.