As Consumers Demand More From Merchants, Merchants Demand More From Their PSPs

Today’s digital-first consumers demand more of their merchants. In turn, merchants demand more from their payment services providers (PSPs) — much more, in fact, Carl Churchill, managing director of U.K.-based technologi said.

Gone are the days when a few basis points gave PSPs an edge. Today, merchants not only want easy access to a variety of services that help them run their businesses, but also access to a variety of payment methods that consumers want to use to pay them.

They also don’t want to be bogged down by an onboarding process every time they expand to a new geography or want to add a new feature or function.

“Merchants want to get access to those capabilities quickly and simply, and not submit an application via paper and hope for the best in the next two or three weeks,” Churchill told PYMNTS in an interview.

See also: Digital and Automated Onboarding Experiences Now Table Stakes for Merchants

The Digital Surge

The pandemic didn’t create this need. Churchill said that the momentum was already building over the last five years.

Independent service vendors (ISVs) in particular, have risen to the challenge, he noted, transitioning from ISVs into payment facilitators as they embed payments more into their proposition to take advantage of the opportunities this new landscape presents.

As Churchill said: “They’ve woken up to the payments opportunity, and now they’re starting to think about how they can properly monetize payments as the business and make life easier for their customers.”

Apart from the traditional brick-and-mortar stores that were forced to shift their businesses online, Churchill said there is an emerging group of next-generation business owners who are more proactive when it comes to digitizing and globalizing their businesses — and they want a single connection to access all of those services. This group wants the platforms and add-ons to be added with the flip of a switch, rather than with a new integration or onboarding process.

Churchill added that it’s critical for PSPs to deliver these improved services to avoid losing brands to companies with newer platforms that make it simple, like Stripe.

Given the shift in customers’ desire for convenience over price, providers that are often the most convenient to access — but not necessarily the most competitively priced — will still win over customers unwilling to wait around for weeks to get approved for a merchant account.

“More and more merchants are just not happy with the basic capability that people used to win with five years ago,” Churchill explained. “Now, it’s about having an omnichannel presence and omnichannel payments capability where you support all of the different entry points for merchants and for their consumers to buy.”

A Unified and Automated Experience

For PSPs, that is easier said than done. Many of them have evolved over the years by bolting different platforms to their legacy platforms, creating cost, time and complexity for merchants that wanted the benefit of all those services.

To help payments providers overcome that challenge, new infrastructure is required — sitting between the PSPs’ systems and the merchant.

That’s the business that Churchill founded in 2015, delivering digital end-to-end merchant onboarding solutions to over 200,000 merchants each year, while supporting about a dozen different acquirers and several independent sales organizations (ISOs) across the U.S. as well as Europe and the Asia-Pacific (APAC) region.

Churchill said the company’s focus as an infrastructure provider has been to help payment providers give their merchant clients access to their various services in a fast and simple way, tying together payment provider services in a manner “that is quite unusual within the payments industry.”

This includes capturing data and populating systems, automating anti-money laundering (AML) credit risk checks or more recently, harmonizing different portfolios of products, particularly for larger global payments businesses like Fiserv (which acquired technologi in November) that have a long history of acquisitions. This results in a mix of legacy infrastructure and new payment platforms with both old and new interfaces.

Tying these systems together, Churchill said, has created a consistent, unified and automated experience for merchants, giving acquirers a single interface to deliver a merchant account anywhere in the world, with a single application programming interface (API) and user interface across the company’s wide footprint.

The benefit is saving time and money, Churchill said.

“It takes days and weeks to respond to the ‘What’s next?’ in terms of a new product rather than many months and different fragmented experiences full of friction,” he added.

The company also handles the heavy lifting when it comes to managing data protection requirements and data storage concerns to meet the requirements in the different regions businesses operate in.

Mitigating Cross-Border Risks

Some businesses are skeptical about venturing across borders because they are concerned they will be unable to manage any fraud associated with fake digital businesses or identity theft in other jurisdictions.

Churchill said that while that is a real challenge, it’s a problem that the company has been working to address. The company uses information from 40 different third-party data elements to monitor where the applications are originating from to make informed merchant decisions. It also asks businesses to upload data with physical photos, which are properly verified.

The company goes a step further to extend those tools to merchants, acquiring banks and other payments businesses, helping them fight consumer fraud around onboarding businesses that don’t exist or engage in fraudulent transactions.

For example, in the U.K., there is an increase in business failures from home-based businesses. This has prompted technologi to implement more enhanced checks around the viability of the business for the home-based distributor behind the business.

Overall, Churchill said, “A good system around proper customer verification and proper merchant verification is looking more deeply at the industry that they’re in,” without introducing more friction.