Reducing risk in payment facilitation

Inherent in any financial services is risk, both in terms of your business and your customers. If you decide to become a fully registered payment facilitator, you take on the beast of owning all merchant and transactional risk – which can be a particularly large pill to swallow. 

Beyond the risk directly associated with the payments, you also may risk disrupting your current strategic plan, having to reallocate engineering and financial resources, and adversely impacting your customer experience. All of these can be mitigated and managed by a properly prepared and experienced team, but must be considered seriously at the onset of a payment facilitation discussion.

If that doesn’t sound feasible for you right now, you may want to consider a payments partnership, where all of the risk and client management, including fraud monitoring, PCI compliance, and data security is handled for you. 

Reducing risk through outsourcing to a payments partner

Let’s use Payrix as an example. As an integrated payments partner, we can provide you with a comprehensive integrated software solution that fits seamlessly into your SaaS platform. You can also choose the level of control and risk you want to take based on current and future goals, using tools such as our multi-layered fraud monitoring and protection software suite that’s designed to drive efficiency, reduce administration time, and stop fraud in its tracks.

Risk management

Elements or services to consider

Real-time merchant monitoring

Set automated rules, like maximum transaction amount, maximum number of transactions, card origin restrictions, and more, with our customisable fraud monitoring toolkit that tackles fraud before it starts.

CVV/CVC validation

Validation values or codes are more difficult to copy or obtain than card numbers and expiry dates, so we monitor these values much more closely to ensure each card used is valid.

Chargeback management

Avoid chargebacks by validating your customers’ identities and match them against the legitimacy of transactions being processed. We automatically score transactions based on this criteria and flag issues for immediate attention.

Post-order review and confirmation

Set rules and monitor potentially fraudulent transactions. Based on the parameters set, you can escalate certain payments or manually reject them to avoid fraudsters and unnecessary chargebacks.

Kount fraud prevention

We partner with Kount – global leaders in online fraud protection – to further help you combat fraud. They give you a comprehensive set of fraud rules across customer payment and device elements to assist with identification and rejection in real time.

As you can see, deciding to take on a project of this magnitude comes with major considerations. For some SaaS companies, the ROI to become a full-fledged registered payfac doesn’t make as much sense for you as an integrated payments partner does. Growing software companies and/or management teams who are more averse to risk often find that still being able to monetise their payments without absorbing the full brunt of being a payfac is a better solution. 

If you don’t like the idea of becoming a payments business AND a software business, and you don’t want to mould your existing business to fit a one-size-fits-all ISO, then a more flexible model that utilises the best of both might work well for you. If that’s the case, you’ll want a partner who understands your client needs and strategic goals, as well as being able to support you with a fully integrated payment solution.

​Making the decision that’s best for your business right now requires consultation from an expert. Payrix makes it possible for software companies to crawl or walk before they run towards payment facilitation. No matter the stage you’re in, our team will always take a consultative approach to understand your specific needs and vision. And through our solutioning and discovery process, we can help you uncover which model best aligns with your payment monetisation strategy and maximizes your success.

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