APEXX Global: When Acquirers Compete, Merchants Win

Retailers tend to move from one acquirer to another, and most often it’s out of the frying pan, into the fire because they are simply getting a different, slightly less costly service which is not necessarily a better package than what they had before.

It’s the reason why U.K.-based FinTech APEXX Global has created a data-driven platform that puts merchants in a position where they can test one acquirer against the other, or even against a payment service provider (PSP) offering attractive opportunities to increase their conversion rates.

This, according to Toreson Lloyd, co-founder and CCO at APEXX Global, is a way of “putting more control back into the hands of merchants” who can test a different provider every other day on the platform, for example, without any commitment or having to do deep integrations.

“If a transaction is unsuccessful, they can simply retry with a separate issuer whose risk rules might be slightly different, or who the merchant may have a better history with,” Lloyd told PYMNTS in an interview, adding that there’s been a significant increase in merchant acceptance rates as a direct result of that process.

When it comes to their relationship with acquirers — their “friendly enemies or frenemies,” per Lloyd — it is not always smooth sailing, especially when key clients are taken away based on what the data is showing on which acquirers are better in a region, across different channels or across separate merchant category codes (MCCs).

And that ends up creating some level of friction: “X may not be the best acquirer in certain parts of Europe, for instance, and we know that to be the case [and] we have the data to show it [but] they’re never going to like it so it’s definitely a push-pull relationship,” Lloyd told PYMNTS.

He went on to say that in the early days, the firm struggled to get the attention of acquirers, but as the payments orchestration and processing platform has grown over the years, acquirers have seen “the benefit of our sales engine and our ability to draw in big brands across Europe.”

Today, the U.K.-based firm, founded in 2016, has over 120 integrated partners and multiple enterprise clients including ASOS, eShopWorld, XE.com, Swoon and AirSeychelles, and currently operates across more than 70 countries.

The payments platform combines acquirers, gateways, shopping carts and alternative payments methods (APMs) into a one-stop solution for Tier 1 merchants and large PSPs, helping to manage the authorization, processing, and optimization of transactions.

Complexity is Good for Business

According to Peter Keenan, the company’s founder and CEO, the withdrawal of the U.K. from the European Union (EU), popularly known as Brexit, has meant more complexity for clients. For example, a U.K.-based cross-border eCommerce brand that is taking payments in continental Europe and having to use a U.K. acquirer “has seen a substantial increase in their interchange rates.”

But that ambiguity and uncertainty has worked well for APEXX. “All complexity is good for us because the more complicated the setup that our customers need, the more they need the expertise that we bring,” Keenan explained.

Another complexity that has played into their hands is the wide variety of APMs available and how increasingly difficult it is to present the correct buy now, pay later (BNPL) solution on ambiguous payment pages.

Aiming to solve that problem led to the launch of the firm’s BNPL Connect product in March this year, aimed at simplifying the onboarding process of BNPL solutions for PSPs and their merchants as well as acquiring banks.

The product gives them access to APEXX’s platform which offers multiple BNPL solutions through one consolidated API and makes it easier for them to offer consumers the best choice from more than 14 BNPL providers worldwide.

To further strengthen its BNPL offering, the payments company recently announced a strategic BNPL partnership with Worldline, a leading European digital payments provider, that will enable Worldline’s 1 million-plus e-commerce merchants to access multiple BNPL solutions in over 40 markets worldwide via the BNPL Connect platform.

Read more: BNPL Under Global Regulatory Scrutiny, With UK as Likely Frontrunner

But the growing popularity and increasing significance of BNPL solutions has put the product under global scrutiny, and in the U.K. where APEXX is based, concerns over the lack of BNPL regulation have led to the recent launch of a public consultation seeking comments from stakeholders.

After reviewing these opinions, the government is expected to propose new regulation which could be adopted sometime in the second half of next year, Keenan said, adding that the company welcomes regulatory scrutiny of the sector to help raise the standards in responsible lending and ensure all customers are treated fairly.

Cracking the US Market

Last month, the payments platform announced a collaboration with Discover Global Network, the payment brand of Discover, to help boost efficiency and increase transactions for merchants and Discover Global Network cardholders globally.

Through the deal, APEXX’s merchants will gain access to the more than 270 million Discover cardholders across the network, who in 2020 collectively had over $415 billion in spend opportunity.

Keenan said the deal marks the start of “a very fruitful engagement,” with APEXX helping Discover, which is very strong in the U.S. as compared to Europe, bolster its business across the region.

And it’s going to be a win-win solution for both parties. Following APEXX’s success and popularity in European markets, the company has now set its eyes on the U.S. market where it is aiming to help new and existing PSPs meet the increasing demands of the booming BNPL market.

“Relationships like [the one we have with] Discover is something we’ll be leaning on. While we’re helping them in Europe, we will be expecting some level of quid pro quo in them opening doors for us in the U.S.,” Lloyd said.