A recent article in PYMNTS pointed out, “The payments ecosystem spends 99% of its time and money on the 1% of the people who are out to exploit the system: the fraudsters. It’s now time to turn the tide.”
While this article explored how merchants could scale and grow by focusing on good customers and improving customer experience, the same principles hold true for payment service providers (PSPs) and acquiring banks whose customers are merchants.
What would happen if payments providers turned their focus, time, and effort to the task of retaining good merchants?
Payment providers must walk a fine line between offering merchants a frictionless experience and maintaining compliance to avoid action from regulators, while at the same time staying competitive.
The ROI of merchant retention
Competition for merchant business is stiff and merchant expectations are high. That’s why it’s important to never lose sight of merchants’ needs and expectations.
The top three merchant expectations, according to Forrester, are cost-effective risk mitigation solutions, easy-to-use products and solutions, and collaboration and partnership with account teams including the development of new ideas and proactive advice.
The latter indicates a desire from merchants to have a deeper relationship with PSPs. This is good justification to place a higher priority and your best resources on retaining good merchants, while continuing to filter out bad actors. Doing so could result in:
Improved customer experience – When you enable good merchants to seamlessly conduct business by processing transactions without unnecessary interruptions, they are going to have better experiences. That means they’re more likely to remain your customer.
Strong long-term relationships – A greater focus on collaborating with merchants and developing solutions to solve their problems lets merchants know they’re important to your business and makes for strong long-term relationships resulting in customer value for longer.
Reduced costs of merchant turnover – It’s simply less expensive to keep a good merchant than to be forced to obtain new merchants to replace it. Retention is cost-effective.
Last, but perhaps most important, focusing on merchant retention with an eye toward remediation over rejection will enable your organization to build and expand your merchant portfolio, so you can achieve sustainable revenue and business growth.
Retaining good merchants requires scalable solutions
Meeting merchant expectations while filtering out fraudsters requires automated, intelligent solutions.
MerchantView detects fraud quickly using machine learning and artificial intelligence, providing PSPs and acquiring banks with the data and insights that allow you to remediate good merchants.
EverC also provides solutions for KYB, adverse media monitoring, and screening for sanctions, watchlists & PEP, to help you manage and mitigate merchant risk at onboarding and throughout the merchant lifecycle.