Acquirers must future-proof their operations in an increasingly mobile-first world.
As Visa Acceptance Solutions Global Sales, Engineering Vice President Pritesh Patel told PYMNTS, there’s a continuing shift by acquirers who use third-party payment system partners to address everything from new regulatory frameworks to new fund flows.
“Among the things that acquirers are really looking for when they’re looking at third-party services is the ability to scale and deploy new capabilities and new experiences,” but in ways “that don’t require significant technical lift,” Patel said as part of the Visa Acceptance Solutions series on the rise of the mobile-first shopper.
Acquirers face resource constraints in terms of time and money, and moving to market with new payments functionality has become a key determinant of which providers are top choices for acquirers, he said.
Joint research from Visa Acceptance Solutions and PYMNTS Intelligence in the March “Bridging the Gap” report found that two-thirds of acquirers name easy technology upgrades as a reason to use third-party payments solutions.
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Optimizing the Flows
Among the key goals to be considered, according to Patel: “How do you optimize that flow to ensure that you’re getting that experience through with minimum friction, which then ultimately leads to revenue and gives you the opportunity to cross and upsell services during that experience?”
For acquirers, the mobile-first paradigm means not just processing payments, but enhancing the entire digital journey. By partnering with third-party providers, acquirers are essentially “buying into that partnership of availability, robustness, and actually passing that accountability” for all manner of operations to the provider, while acquirers use freed-up resources to improve R&D and other efforts, he said.
That accountability includes uptime and real-time processing capabilities that are not merely advantages but fundamental requirements for acquirers, he said.
The joint research from PYMNTS Intelligence and Visa Acceptance Solutions found that uptime performance is among the key differentiators for acquirers seeking to attract and retain merchants.
Beyond uptime, the contemporary payments landscape, with its advances in artificial intelligence technology and fraudsters’ attacks using that advanced technology, demands real-time risk management.
Patel said that “the ability to vet and screen transactions is so important, but so is doing that through automation in real time, with added flexibility in order to have a tailored risk strategy.”
The partnership model ensures that acquirers can tap into providers’ innovation and expertise with, say, 3DS protocols, without the prohibitive costs and complexities of building and maintaining these advanced systems in-house.
The fraud-fighting capabilities must be balanced against a frictionless consumer experience, especially in a mobile-first environment, Patel said. He pointed to the “token vault capability” of providers as a key solution. The capability allows partners to process transactions without handling sensitive data like primary account numbers (PANs), reducing the risk of data breaches.
Furthermore, “network token processing” enhances authentication and boosts conversions, Patel said.
Streamlined Operations Through a Single Interface
As for the providers themselves, a third-party payment system must inherently be adaptable and capable of reacting swiftly to local market conditions with agility, Patel said. Acquirers need to be able to consume services in a simplified, flexible way.
Patel elaborated on the importance of a unified interface that can be thought of as being intuitive, with what he illustrated as “the ability to actually point and click and activate various services, payment options, and add different workflows that don’t require major code changes.”
Linking up with payment processing platforms gives acquirers the benefits of “faster market entry, which will then support your ability to gain more market share and growth in your [merchant] portfolio, while helping to drive customer portfolio retention, as well,” Patel said.
