by Tiffany Ha4 minutes • Fraud & Scams • January 9, 2024
Enhanced Merchant Acquiring Risk Management
Talk about a tightrope act! Acquiring banks and Payment Service Providers (PSPs) must balance protecting their merchants from fraud and themselves from the potential risks from the very same merchants. A crowded market makes finding the right balance harder than sticking to New Year’s resolutions in March. In other words, both acquirers and PSPs need a competitive strategic advantage to deliver enhanced merchant acquiring risk management services.
That’s where Feedzai’s Risk Management for Acquirers and PSPs solution comes into play. Our risk management solution helps merchant acquirers proactively address fraud, manage risk, and seize growth opportunities. It provides an all-encompassing solution for safeguarding financial interests. At the same time, it enables acquirers and PSPs to achieve their growth goals.
Learn how our unique solution provides an approach to merchant acquiring risk management to tackle merchant risk effectively.
3 Common Merchant Acquiring Risk Management Challenges
Three key challenges acquirers and PSPs persistently face:
Balancing Fraud Prevention and Merchant Portfolio Management
Acquirers frequently grapple with the dual responsibility of maximizing their customer conversion rates while protecting themselves from fraudulent or high-risk merchants. Some may consider these competing goals, but an effective fraud prevention strategy positively contributes to overall payment acceptance – ensuring as many genuine transactions are processed as possible. Maximizing conversion rates is essential to ensure that their merchants are happy with their profit levels. If not, they might shop for a new acquirer who will help increase their overall payment acceptance.
Meanwhile, whether a merchant faces the prospect of going out of business or high fraud rates, acquirers may bear the brunt of fraud losses. An effective fraud prevention and merchant monitoring solution is essential for acquirers to assess each merchant’s stability and minimize overall portfolio risk. Issuers are more likely to approve transactions from a merchant or acquirer when fraud rates are low.
Sensitive Margins Across the Payments Industry
Acting as go-betweens in credit or debit card transactions, acquirers operate with slender profit margins. They receive a small percentage of transaction fees. The remaining funds are distributed across various card issuers and payment networks.
This means that every dollar matters. The efficacy of fraud prevention and merchant monitoring is crucial for maintaining the industry’s financial stability.
Value-Added Services: Maximizing Revenue through Fraud Prevention
Help Merchants Unlock New Revenue Streams with Value-Added Services Gone are the days when payment processing and hardware were enough. […]
Increased PSP Competition
Offering value-added services aids merchants’ revenue growth and allows PSPs to stand out in a competitive payments industry. PSPs must balance introducing new payment types and maximizing acceptance while protecting these channels from fraud. A comprehensive solution that addresses fraud prevention and empowers PSPs to offer and secure emerging payment types simultaneously becomes imperative.
How Feedzai Addresses Acquirer and PSP Risk Challenges
Feedzai’s Risk Management for Acquirers and PSPs is a holistic solution offering a genuine understanding of fraud risk across consumers and merchants. A user-friendly interface simplifies complex risk assessments. The comprehensive offering includes
Transaction Fraud for Acquirers and PSPs
Feedzai empowers acquirers and PSPs to protect merchants by providing real-time, omnichannel risk scoring. This functionality extends to out-of-the-box risk strategies designed to counter various fraud typologies, including card-not-present, card-present, skimming, BIN attacks, and more. Furthermore, Feedzai’s risk engine is payment-type agnostic, allowing acquirers to offer new and alternative payment types securely. This flexibility empowers acquirers to scale their operations with confidence, knowing all payment types are accurately risk-scored.
Merchant Monitoring
Acquirers and PSPs can leverage Feedzai’s Merchant Monitoring capabilities to achieve their revenue goals and evaluate the overall health of their portfolios. Merchant Monitoring provides a comprehensive overview and ongoing monitoring of merchant behavior. Acquirers and PSPs can access dashboards that track processed/declined transactions, fraud levels, and chargeback rates.
Whether scrutinizing individual merchants or assessing the entire portfolio, acquirers and PSPs gain insights into the likelihood of bust-out fraud, bankruptcy risk, chargeback risk, and more. Feedzai’s versatile data usage sets it apart from competitors, with no additional data required. Leveraging the data collected from Transaction Fraud for Acquirers and PSPs, Feedzai creates a comprehensive view of merchant activity.
Value-added Services
In addition to robust acquirer fraud prevention measures, Feedzai’s solution extends optional autonomy and detection capabilities to merchants through a white-labeled solution. Within this value-added framework, Feedzai introduces self-service capabilities for merchants.
By granting direct access to Feedzai’s Case Manager, merchants can review their alerts and create rules as needed. This approach allows merchants to take ownership of their fraud strategy. Merchants can adapt it as necessary to fit their specific business goals.
This empowerment not only enhances the merchant’s role in risk management. It also streamlines the overall process, fostering efficiency and agility.
Why Choose Feedzai?
By simplifying fraud prevention and merchant monitoring into a single platform with global reach and scale, Feedzai delivers an unparalleled approach to merchant acquiring risk management. Benefits of Feedzai’s merchant acquiring risk management services include:
Real-Time Transaction Fraud Detection
Feedzai empowers acquirers by providing real-time detection of transaction fraud. This provides a swift and proactive shield against potential financial losses for merchants. Through advanced algorithms and omnichannel risk scoring, Feedzai ensures immediate identification and mitigation of different fraud threats.
Monitoring Merchants for Fraud, Default, or Compliance Risks
Our comprehensive approach extends beyond immediate threats, enabling acquirers and PSPs to regularly monitor merchants for potential fraud, default, or compliance risks. By providing a holistic overview of merchant behavior, including processed/declined high-risk transactions, fraud rates, and chargeback rates, acquirers gain valuable insights that facilitate proactive risk management and ensure the overall security of their merchant portfolios.
Reselling Best-in-Class Fraud Solutions Opportunities
Acquirers can seamlessly resell Feedzai’s top-tier fraud solutions to small and medium-sized merchants, fostering additional income streams. This white-labeled approach not only enhances the acquirer’s service portfolio but also allows them to maintain visibility into how merchants utilize fraud prevention controls, ensuring a symbiotic relationship between security and revenue generation.
With Feedzai, acquirers and PSPs can confidently navigate challenges, minimize risks, and uncover untapped revenue streams. Discover the keys to secure and prosperous acquiring by exploring the innovative landscape of Feedzai’s Enhanced Risk Management Solutions.
All expertise and insights are from human Feedzians, but we may leverage AI to enhance phrasing or efficiency. Welcome to the future.