How PSPs Can Stay Ahead in a Highly Competitive Landscape Subject to Complex Legislations
by Amal Ahmed, Director, financial services and EMEA marketing at Signifyd
The growth of ecommerce and digital payments has transformed the payment industry. And the competition in the ecommerce landscape is fiercer than ever, with customers expecting a seamless payment and checkout experience.
One of the biggest challenges for merchants and PSPs is the ever-changing rules and regulations imposed by legislators and card schemes. Merchants are looking for payment fraud protection, guaranteed chargeback recovery, and compliance with complex legislations in the face of their payment service provider.
PSPs are tasked with providing the whole package along with competitive rates. The sure-fire way of doing that is by seeing the current challenges as opportunities and embracing technology to help streamline the processes.
Here, we look at some strategies that payment service providers can use to stay ahead in a highly-competitive landscape.
While there are many changes that PSPs can make in-house, what can truly make the difference between surviving and thriving is implementing smart technology that helps tackle anything from fraud and chargebacks to compliance and conversion rates.
At the heart of this technology lies machine learning, artificial intelligence, and advanced data analysis. With access to a global commerce network that contains historical and real-time transactional data from thousands of merchants, businesses can approve more good orders in no time and reject fraudulent ones. The result is optimised revenue and better customer experience.
This will enable you to offer your merchants more competitive rates, less chargebacks, and lower operational costs, while you’re reaping the benefits of increased customer retention, more revenue, and a richer portfolio of clients. It’s a win-win.
Offer compliance advice and tools
The payment industry is subject to complex legislations, and PSPs need to offer their merchants secure payment processing in compliance with ever-changing rules and regulations. This will help avoid legal and financial penalties. PSPs must keep up to date with regulatory changes and ensure that their payment systems are compliant with regional legislations, such as PSD2’s SCA regulation in Europe. They must also ensure that they have robust risk management and compliance frameworks to prevent fraud.
Technology comes into play yet again when it comes to optimising the compliance processes. A third-party tool can ensure that everything is up-to-date and that merchants are constantly compliant with the ever-changing rules and regulations, while preventing a growing variety of fraud scenarios.
Such a tool will complement merchants’ SCA strategy and will help them make use of smart exemptions engines to reduce friction caused by legislations such as strong customer authentication (SCA).
If exemptions are managed properly, merchants can increase their acceptance rates by 7%, resulting in improved customer retention rates. But to do that, they must use good Transaction Risk Analysis (TRA) tools to maximise exemptions and keep fraud to a minimum. PSPs who offer their merchants a robust fraud solution using tools at their disposal are best-placed to stay at the forefront of the ecommerce payments market.
Provide a diverse portfolio of payment methods
As global ecommerce is growing exponentially, a new demand for a variety of payment methods is emerging. Each region has its own preferred payment options, and merchants need to be able to match that, especially if they’re operating internationally.
Moreover, new, digitised payment methods are also appearing on the horizon, such as e-wallets and mobile and contactless payments. This has made the online shopping experience simpler, quicker and more convenient for consumers.
As businesses embrace the innovation in payment methods, PSPs need to offer a variety of payment methods to support cross-border payments and offer their services in multiple currencies.
They can again invest in technologies to provide a streamlined payment experience, such as one-click solutions that enable customers to make quicker purchases and eliminate the need to key in their information at every purchase.
Include value-added services
What will really make PSPs stand out among the competitive ecommerce landscape is including value-added services in their package. This can range from fraud detection and prevention to guaranteed chargeback recovery to robust data analytics.
This will allow PSPs to increase their merchants’ revenue and help them manage fraud, while PSPs can maintain their reputation of satisfied clients and increase their customer base.
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