the brave new payments world for psps: solutions for … · the brave new payments world for psps...
TRANSCRIPT
PSP
With the explosive growth of global eCommerce, the entire retail
industry has become increasingly digitized. The rise of a generation
expecting omni-channel experiences means merchants, and thus
PSPs, have to change dramatically to meet these expectations.
The race to offer innovative payment applications turned into an
all-out sprint after new entrants to the PSP market—acquirers,
logistics companies, card schemes, banks, accounting and billing
firms, and POS manufacturers, among others—began to change
the payments landscape and entice customers to their solutions.
The winners of this race will be those that provide superior
and secure payment solutions globally, at any time, through
any device, and most importantly, do so simply and quickly. This
eGuide explains how trends in the payments industry are influencing
PSPs and presents solutions for overcoming the main challenges
they face.
THE PSP INDUSTRY CONFRONTS DISRUPTION
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9 TRENDS SHAPING TODAY’S PAYMENTS LANDSCAPE FOR PSPs
THE EXPLOSIVE GROWTH
OF eCOMMERCE
In 2015 eCommerce merchants netted
$1.9 trillion in revenue, are forecast to earn
$2.2 trillion by 2020, and projected to
continue this upward trajectory for years.
CHECKOUT CONVERSION RATES
ARE KEY TO SUCCESS
Sub-optimal conversion practices cost
merchants $151.8 billion in revenue in 2015.
Most merchants do not realize the extent
of their losses.
OPEN API TECHNOLOGY IS
PREPARATION FOR THE FUTURE
The payments industry is dynamic, which
means PSPs must be flexible and able to
adapt quickly. “Open” technology enables
the flexibility and simplicity merchants
demand.
ONLINE SHOPPERS CROSS
BORDERS EFFORTLESSLY
Online shoppers ignore international
borders, raising cross-border sales to $300
billion—25% of total global eCommerce—
in 2015. Cross-border’s share will continue
to grow.
THE OMNI-CHANNEL PAYMENT
EXPERIENCE
Two-thirds of online shoppers use mobile
devices to make purchases, a figure that will
continue to grow. Omni-channel payment
processing capabilities are essential for
merchants.
SCALABLE, NEXT-GENERATION
PAYMENTS INFRASTRUCTURE
Merchants want their PSP to build and
provide infrastructure that can scale rapidly
and easily.
THE CONTINUED RISE OF
ALTERNATIVE PAYMENT METHODS
Alternative payment methods are forecast
to comprise 59% of global eCommerce
payments by 2018, having already overtaken
cards in 2015.
FRAUD ADAPTS AND
MUST BE STOPPED
Fraud rates continue to rise and cross-
border fraud rates average three times
more than domestic. PSPs with effective
and embedded solutions possess a distinct
advantage.
PSPs FACE NEW COMPETITION
Bank and non-banks will shift their focus to
traditional PSP-sector business, in order to
control a greater part of the payments value
chain.
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1
2
34
5
ENABLING EFFICIENT CROSS-BORDER
PAYMENTS PROCESSING
OFFERING AN OMNI-CHANNEL
PAYMENTS EXPERIENCE
PSP
STOPPING FRAUDULENT
PURCHASES
PROVIDING TOOLS TO INCREASE
CHECKOUT CONVERSION
EMPOWERING MERCHANTS WITH
INNOVATIVE, STATE-OF-THE-ART
TECHNOLOGY
THE MAJOR CHALLENGES PSPs FACE WITHIN eCOMMERCE
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PAY
CHALLENGE
Two facts—global eCommerce payments
revenue growth has exceeded expectations
and in 2015 alternative payment methods
overtook credit cards—combine to present
three unique challenges for PSPs expanding
beyond their domestic market. First, PSPs
need to consider the impact of alternative
payment methods. Second, payment habits
and consumer behavior differ by country.
And third, the integration of these different
payment methods can be time-intensive and
incur high development costs.
SOLUTION
Successful international expansion requires
offering not just the right payment methods
and acquiring options, but also the ability to
configure them quickly and efficiently. It has
been shown that simply offering the three
most popular payment methods in each
country can increase checkout conversion
by 30%. This can be achieved either
through partnerships, outsourcing to
a payment provider, or by connecting
to an existing modular payment
gateway—that can “switch on”
alternative payments as and
when needed—to achieve rapid
global expansion.
ENABLING EFFICIENT CROSS-BORDER PAYMENTS PROCESSING 1
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CHALLENGE
Online shoppers, in the age of the
smartphone, have more information
than ever at their fingertips. These
self-empowered consumers have high
expectations and assume online and offline
channels will blend for a seamless shopper
experience. Merchants want their PSP to
provide the technology that enables such
solutions, to secure new revenue streams.
SOLUTION
A PSP must adapt to ever changing
merchant needs and offer successful
integration for mobile point-of-sale,
mCommerce, eCommerce and in-store POS
transactions. By offering this technology
the PSP enables the merchant to provide
a consistent retail experience across all
channels, to drive shopper conversion.
In addition, a PSP that delivers the full
solution from consolidated reporting to
API integration and the ability to monitor
all channels will empower their merchants
to remain agile and profitable in such a
competitive landscape.
OFFERING AN OMNI-CHANNEL PAYMENTS EXPERIENCE 2
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CHALLENGE
Growing online businesses are constantly
under threat from fraudulent shoppers.
PSPs are expected to offer their merchants
a fraud prevention and risk management
solution that is closely tailored to their
individual needs, configured for local habits,
and capable of adapting rapidly.
SOLUTION
Configuring fraud prevention strategies for
each market is essential to protect hard-
earned revenues. In the card-dominated
U.S. market for example, chargeback
management solutions help companies
manage fraud. In Germany, where two-thirds
of online purchase are completed by open
invoice, behind the scenes background risk
checks that determine a shopper’s reliability
are a more appropriate solution. To give
another example, 3-D Secure, although
good at stopping fraud, is seen by many
as a conversion killer. However, in some
markets, such as India and Russia, 3-D
Secure has been shown to have a positive
impact on conversion.
STOPPING FRAUDULENT PURCHASES 3
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PAY
CHALLENGE
Sub-optimal conversion practices cost
merchants $151.8 billion in revenue in 2015,
with most merchants not realizing the
extent of the losses within their checkout
process. What looks simple to a shopper—a
straightforward and frictionless checkout
process—is anything but easy to set up
behind the scenes.
SOLUTION
There are many aspects that need to be
considered in the checkout page, like
offering trusted logos, preferred payment
methods or efficient payment processes,
but the payment form is the heart of the
checkout process. Get it right and no one
even notices it. Get it wrong and shoppers
become uneasy and abandon their shopping
cart. A PSP needs to consider two important
aspects when delivering a good payment
form. First, it must securely handle payment
data, often through tokenization. Second,
it should embed into online shops, avoiding
offsite redirects and adhering to shops‘
look and feel. Practically invisible to
shoppers, embeddable payment forms
play an important role in frictionless
checkout processes and high conversion
rates.
PROVIDING TOOLS TO INCREASE CHECKOUT CONVERSION 4
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PSP
CHALLENGE
Global eCommerce is growing rapidly and
the volume of international payments can
cause headaches if merchants demand
myriad payment methods, reporting
options, or fraud prevention tools.
SOLUTION
The underlying payment technology a PSP
delivers needs to enable adaptability in
order to keep pace with a changing industry.
RESTful API architecture has become
the foundation for greater technological
openness because it enables simple,
innovative, individualized solutions. By
building upon an existing open payment
infrastructure, PSPs overcome their legacy
systems, and developers are empowered
to create their own value-added services,
features, and applications. PSPs that
embrace openness also connect to
sophisticated reporting and fraud tools
via a single integration.
EMPOWERING MERCHANTS WITH INNOVATIVE, STATE-OF-THE-ART TECHNOLOGY 5
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Mixing the right formula that raises a
PSP above the crowded payment
landscape requires a strategy that adapts
to new market trends quickly. It requires a
foundation comprised of a secure payment
setup featuring multi-currency and cross-
border functionalities as well as conversion
and fraud prevention tools configured for
each market and vertical.
PSPs who have an existing payment
gateway, but need a modular solution to
meet the full demands of their merchants,
can partner with a provider for just what
they need. A gateway solution based on
open API technology that features white
label tools that incorporate the PSP’s
corporate design will be much faster and
cost-efficient than building from scratch.
By building upon an existing open payment
infrastructure, PSPs overcome their legacy
systems and developers are empowered
to create their own value-added services,
features, and applications.
Innovation is at core of ACI and developing
technology that drives success is our
focus. Outsourcing to the ACI PAY.ON
payments gateway enables PSPs to reach
domestic and international markets faster,
reduces merchant attrition, and increases
conversions from existing merchants while
attracting new ones. The entire gateway
opens the door to a payment network
of more than 350 alternative payment
methods and acquirers and is accessible
through a single integration with a unified,
RESTful API.
PSPs looking to expand their business with
an end-to-end payment solution can leave
the heavy lifting to ACI and benefit from the
most advanced eCommerce solution with
the simplest integration process.
CONCOCTING THE PERFECT PAYMENTS FORMULA
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ACI Worldwide, the Universal Payments (UP) company,
powers electronic payments for more than 5,100
organizations around the world. More than 1,000 of the
largest financial institutions and intermediaries as well
as thousands of global merchants rely on ACI to execute
$14 trillion each day in payments and securities. In
addition, myriad organizations utilize our electronic
bill presentment and payment services. Through our
comprehensive suite of software and SaaS-based
solutions, we deliver real-time, any-to-any payments
capabilities and enable the industry’s most complete
omni-channel payments experience.
CONTACT US
To learn more about ACI, please visit
www.aciworldwide.com
You can also find us on Twitter
@ACI_Worldwide
Americas +1 402 390 7600
Asia Pacific +65 6334 4843
Europe, Middle East, Africa +44 (0) 1923 816393
ACI BUILDS INNOVATIVE PAYMENT TECHNOLOGIES
THAT DRIVE SUCCESS
ACI’s UP eCommerce Payments solution delivers the
ultimate in simplicity, global connectivity, and security.
Through a single integration to a unified RESTful
open API, merchants gain access to the largest global
payment network. The industry-leading payment
gateway technology enables merchants to build
payment apps and features directly on the platform.
Find out more about the
ACI UP eCommerce Payments
solution for PSPs.
© Copyright ACI Worldwide, Inc. 2016ACI, ACI Payment Systems, the ACI logo, ACI Universal Payments, UP, the UP logo, ReD,
PAY.ON and all ACI product names are trademarks or registered trademarks of ACI
Worldwide, Inc., or one of its subsidiaries, in the Unit ed States, other countries or both.
Other parties’ trademarks referenced are the property of their respective owners.
AFL6049 09-16
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