Payments Integration Takes Center Stage for Cross-Border Commerce

If there’s a single word that has dominated payments — and the service economy at large — through the last few years, it’s integration.

Integration of core payments functions, to be sure, but for processors, the opportunity is there to expand into a broad range of new capabilities tied to cross-border commerce.

Consumers demand simplicity and seamlessness in their everyday financial lives and the commerce experience. Consider the Starbucks app, a single point of integration that ties in everything from ordering one’s morning java, to paying for it, to redeeming loyalty rewards.

Brandon Ferris, product lead at Thredd, told PYMNTS as part of the “What’s Next in Payments” series on the changing nature of the service economy that more brands are seeking ways to control and refine the end-user experience.

“[Brands] want things like a native wallet … and specifically within payments, you’re seeing the blurring of lines between debit or credit or money movement,” he said.

For payment processors, the challenge is to expand the range of value-added services they provide to those client firms and find the right partners with which to collaborate as they enable smooth money movement.

“What’s shifting is how clients think about their relationships with processors,” Ferris said, adding that “they are looking for a processor and partner who can do it all — they don’t want to be in a position where they have to go out and find five, seven or 10 different vendors. They want one set of APIs and an integrated experience. The processors are starting to capitalize on that customer need.”

Thredd is among those processors, offering everything from card issuance, to mobile wallets, to spending control functionalities.

“Going deeper with our clients makes us stickier,” Ferris said.

While the firm tends to build out its own solutions, when examining and forging partnerships with other vendors on a case-by-case basis, Ferris said his company views those collaborations through the lens of what will work through its existing tech stack, “so we make sure that we are not creating a disjointed client experience.”

One key area where value-added services are critical lies with security, where the movement has been away from rules-driven risk management, he said.

“We don’t want to increase friction, and we don’t want issuers to miss out on revenue opportunities,” he said.

Processors are moving toward a fraud-as-a-service model, embracing artificial intelligence, device fingerprinting, dynamic CVV and advanced tools that surround a transaction and help determine whether transactions should be flagged or even stopped.

“We’re getting to a place where there’s less human interaction and less human intervention,” he said, which means that this reduced friction translates into fewer false positives and better conversion rates.

The combination of advanced analytics, better fraud controls and integrated money movement enables companies to expand across the globe — an aspirational goal that Ferris said can take an enterprise based in Europe into markets like the United States or Latin America.

“They want partners that can support them” across regions, he said, highlighting that Thredd has been building out its infrastructure beyond the confines of issuing and processing to support these cross-border goals.

As he told PYMNTS, with an eye toward further product and value-added service buildouts, “we’ll continue to see clients who are looking for that one-stop shop.”