The acquirer and payment service provider (PSP) space is in a Darwinian state. Put simply, only the fit will survive. Acquiring organizations and PSPs face significant challenges on two key fronts. First, a “new normal” landscape riddled with disparate solutions and risky merchant profiles. Second, increased intermediation from digital marketplaces (e.g., Amazon, Shopify, or Etsy to name a few) are stepping in to meet merchants’ payment and settlement needs. 

Actionable data insights are critical for acquirers and PSPs to manage a new array of risks. The right technology differentiates modern risk operations (RiskOps) by delivering value out of data. Feedzai’s new acquirer RiskOps dashboard puts the power of data at acquirers’ and PSPs’ fingertips. The dashboard drives value out of data and enables acquirers to thrive in today’s “new normal” environment of expanded consumer choice, new payment types, and economic competition.

The ‘New Normal’ for Acquirers and PSPs

What does the “new normal” look like for acquirers and PSPs? Complicated is one way to put it. Challenging might be more accurate.

Today’s acquirers and PSPs face threats on multiple fronts. Inflationary concerns take their toll by causing many eCommerce businesses to shutter in their first year. Meanwhile, according to recent figures, global eCommerce fraud is on track to surge by over 130% from 2022 to 2027. Most online merchants agree they need payment partners to respond to new controls and regulations.

It doesn’t stop there. A chaotic and disparate set of solutions only adds to acquirers’ and PSPs’ problems. Partnering with multiple vendors for different point solutions has left many acquirers and PSPs with a fragmented technology stack. This arrangement can limit the ability to access data and make informed decisions. It also contributes to cost overruns and fails to detect suspicious merchants in time. 

Meanwhile, the shift to digital has resulted in greater demand for acquirers to deliver enhanced authorization, real-time data connectivity, and underwriting decisions. Without access to data, acquirers and PSPs will fall behind other providers in the space, such as digital marketplaces.

Digital Marketplaces Stepping In to Address Merchant Demands

Digital marketplaces are disrupting acquirers and PSPs by offering merchants additional services enabled by greater insights into customer behaviors. These marketplaces are expected to represent roughly 60% of digital commerce volume in the next few years. 

As these digital marketplaces expand their reach, acquirers and PSPs must maximize the usage of data they already have. But finding actionable insights in incomplete data can feel like trying to create value out of thin air. 

It’s also very challenging if acquirers are still dependent on legacy systems. Too many acquirers rely on legacy processing systems that have limited ability to scale or adapt to new circumstances. This can stifle growth, produce fragmented risk management using multiple technology partners, and stall go-to-market plans for new products.

Risk Management Technology is the Solution

Acquirers and PSPs face two key priorities to succeed in this new normal. The first is to protect their own business. The second is to protect their merchants’ businesses. Accomplishing both tasks requires acquirers to enter a “virtuous circle” that maximizes growth opportunities for each side.

A RiskOps approach that extracts insights from vast datasets and makes rapid individualized decisions is the key to unlocking both sides of the virtuous circle. With the right solutions in place, acquirers and PSPs can better protect merchants from fraud threats. With greater fraud protection in place, merchants will see higher acceptance rates and fewer fraud losses. This leads to more satisfied customers and loyalty, giving acquirers the fuel they need to grow their businesses.

Technology can also help acquirers protect themselves from risky merchants by understanding them better. With greater understanding acquirers can see greater acceptance rates and improved merchant growth.

How Feedzai’s RiskOps Dashboard Drives Opportunities for Acquirers and PSPs

The key to understanding merchants better rests on making effective use of data. The good news is that acquirers are already sitting on a gold mine of data. The bad news is that the data is buried among acquirers’ disparate point solutions, disjointed data architecture, and a vague or unclear data strategy. 

Feedzai’s RiskOps dashboard approach enables acquirers and PSPs to understand their merchants at a holistic level. With these data-based insights, acquirers and PSPs can quickly understand merchants’ risks and protect themselves from suspicious behaviors. Having faster access to data insights enables acquirers and PSPs to identify risky merchants early and avoid potential fraud losses.

The dashboard also helps acquirers and PSPs to monetize their data to enhance authentication, fraud prevention, and minimize chargebacks. The dashboard provides acquirers with access to rapid risk assessment for much faster decisioning on riskier merchants by combining both transaction data and other merchant risk indicators into a single view.

3 Pillars of Succeeding in the ‘New Normal’

Feedzai’s acquirer and PSP dashboard rest on three key pillars that enable these parties to thrive in today’s new normal. These pillars include:

  • Simplicity: A single API pulls data together from multiple sources for multiple use cases, including chargebacks and AML compliance. The dashboard also improves cost efficiencies by offering a simple reporting interface with machine learning and automated merchant profiling. This empowers analysts to quickly make decisions and remain connected throughout the entire merchant lifecycle. 
  • Risk Precision: A holistic view of risk enables acquirers and PSPs to more accurately risk score merchants and transactions. This enables safe volume growth without requiring additional resources. A lack of risk precision increases the risk of poor response times and unnecessary losses.
  • Value Creation: Acquirers can boost the value of their merchant portfolios by reselling fraud solutions to merchants through multi-tenancy environments or tapping into 3DS exemptions where available. 

In a merchant landscape that is riddled with risks, acquirers and PSPs need to approach risk management differently. A single view of merchant risks opens up new opportunities that would otherwise be considered too risky to exploit.