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How to optimise processes and portfolios for PSPs

The importance of Alternative Payment Methods (APM) is on the rise. Consumers from all over the world look for secure, fast and convenient alternatives to card payments. The development of a range of payment methods that suits every requirement on the global market and meets the demands of both buyers and sellers is certainly not slowing down.

Most of the payment methods are by now optimised for smartphone use, which supports speed and ease of payment. This has, of course, many pros – chief among them the fact that the evolution process will probably leave the best and most widely accepted payment methods on the market. A downside felt by any payment professional is, however, that in order to find the best payment methods, there can be a lot of trial and error – and they are at the forefront of it. PSPs looking to support merchants to meet the requirements of their customer base are hard put to stay ahead of the market and to offer the most important APMs.

The integration with each new method is a time and resource consuming process that is not only a technological challenge. It also demands a careful consideration as to which APMs will become essential portfolio staples and which ones lack the potential for a long partnership. Such decisions cannot be taken lightly, as they can have a huge impact on the future of a PSP. Therefore, any PSP has to analyse the technological setup of a new payment method to make sure it is future-proof and to consider its usability and reputation, which influence the APMs potential popularity on a national, regional and even a global level. In addition to that, PSPs have to make sure that a new APM meets the regulatory requirements of any region that it is set up to be used in.

Does meeting all requirements mean a lot of effort?

PSD2, for instance, will have a powerful impact on APMs used across Europe. As it stipulates the use of two-factor authentication, several established payment methods will have to rethink their technological makeup. This forces PSPs to reconsider their portfolio, too, and to view all future co-operations from a new angle. It is also likely that new solutions will have to be integrated very quickly to keep the portfolio up to date.

In such a situation, it is important to make the right decisions, as the financial stability of a business can be challenged by the high expenditures and unforeseeable returns they entail.The best option in this case is a solution that offers access to many APMs from all over the world to be switched on and off with a single click. This enables PSPs to present a personalised offer to all customers – without the expenditure of integrating and negotiating with all APMs that a specific customer may ask for. Such a solution makes a global range of payment options and easy-to-handle merchant accounts accessible through a single API. It helps PSPs reduce their expenditure for these resources and enables them to focus on interacting with their customers and growing their business.

Reconciliation can be automated

One of the most stubborn issues that challenges the payment industry, and most notably impacts PSPs, is the lack of automated reconciliation. How to bring together payment and banking transactions is a question of great importance that has not been solved yet. At the moment, PSPs are investing considerable effort and money in solutions that can only yield less-than-perfect outcomes, because it seems not yet possible to automatically create a detailed report for any customer, APM, and bank account with a single click.

Such reports would not only make it easy to keep an exact, real-time overview of any account, but also to automate billing and commission calculations even with complicated financial models. A solution for the matter is not easy, as it would have to access every single payment account that a PSP sets up for a customer, but also to be able to track the banking processes of the merchants. This is more complicated than it appears at first sight, as it requires access to the SEPA and SWIFT networks as well as highly advanced technology.

One solution to drive the payments ecosystem

ONPEX is uniquely positioned to support PSPs in meeting the above challenges head-on. The sophisticated, modular software suite was developed to meet all requirements of a constantly evolving payments ecosystem. Through it, PSPs can provide a global range of payment methods and add and remove them from their range with a single click. All APMs become accessible with one customisable API, which eliminates high investments in new connections. 

In addition to that, ONPEX is a Luxembourg-regulated Financial Institution connected to the SEPA and SWIFT rails. This makes it possible to open bank accounts and map accounts from other banks into them. These features form the basis for automated reconciliation and billing processes that are easily manageable and can include extremely complicated billing and commission models.

Together with other features like fraud management, these solutions enable PSPs to focus on their core business and to focus on building and expanding their global customer base.

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ONPEX is a leading provider of transaction banking and cross-border payment services to fintechs and digital businesses. Based on our flexible, API-driven BaaS platform, our clients create user-friendly, compliant and cost-efficient solutions.

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