The advent of the first Payment Services Directive in 2009 marked a significant turning point in the payment services sector, energizing the market and providing opportunities for companies to launch or expand their activities. Since then, the number of players, including Payfacs, acquirers, and PSPs, has skyrocketed globally.
This surge represents a considerable opportunity for businesses, but it also entails substantial investments in technology, human resources, compliance, security, and distribution. The barriers to entry are significant, and navigating this constantly evolving ecosystem requires in-depth understanding and tailored strategy.
This guide created by NORBr aims to provide Payfacs with key insights and strategies to thrive in this competitive landscape.
1. Diversify and simplify payment processes
Payfacs are navigating a world rich with diverse payment methods. This abundance brings a significant challenge: managing these options efficiently while ensuring a seamless customer experience.
Simplification here is not just beneficial; it’s essential for survival in a competitive market. It's about creating a balance between offering variety and maintaining ease of use. A well-orchestrated system can transform a complex array of options into a streamlined, user-friendly process. This is crucial for client satisfaction and operational success.
- Implement a unified platform for seamless multi-channel payment experiences;
- Adopt universal tokenisation for secure and continuous service;
- Offer tailored services to meet diverse merchant needs;
- Streamline back-end operations for efficient transaction processing;
- Maintain transparent processes to foster trust in settlements and compliance.
2. Open your offer to the world!
Entering new markets is attractive but comes with its set of challenges. Each one has unique regulatory, cultural, and linguistic aspects that must be navigated carefully. Payfacs need to consider local payment preferences and ensure compliance with regional regulations. Understanding these nuances and adapting strategies accordingly is key to successful international expansion.
How does this translate into actionable steps?
- Offer localised payment methods (e.g. Bancontact, SOFORT, iDEAL, Satispay) tailored to the different markets targeted by your clients;
- Ensure handling of multiple currencies to facilitate global transactions.
3. Create a consistent omnichannel experience
Modern shoppers expect a seamless experience, whether they are shopping online or in-store. Omnichannel solutions, such as Payplug, bridge the gap between these two worlds. This approach ensures a coherent path, from one channel to another: customers can buy a product online and return it in-store, or vice versa.
For Payfacs, this means integrating systems to provide consistent payment options across all platforms. Beyond enhancing operational efficiency, an omnichannel strategy is crucial for both satisfying consumers and fostering loyalty.
In short, here are the keys to a unified payment experience:
- Offer a consistent payment interface across all touchpoints;
- Integrate your systems for flawless online and offline transaction synchronisation.
4. Adopt a data centric approach
In the fast-paced world of payment facilitation, data is a cornerstone for strategic decision-making. The volume of payment data, although invaluable, can be overwhelming.
To navigate this, Payfacs must not only implement solutions to manage this data effectively, but also keep a close eye on developments in the GDPR regulations. This dual focus ensures that they harness the power of data for business growth while respecting privacy and data protection laws.
- Implement GDPR-compliant practices in data handling;
- Use customisable dashboards for a unified, privacy-conscious view of payment data;
- Employ advanced analytics to identify trends and adapt your strategies;
- Regularly review data processes for compliance and efficiency improvements.
By integrating GDPR considerations into their data-centric approach, Payfacs can not only optimise their services but also gain the trust of their customers.
5. Manage risk and prevent fraud
The rise in digital transactions has seen a parallel increase in fraud. Payfacs must strike a balance between stringent security and customer convenience.
Cyber attacks are becoming more sophisticated, making fraud prevention a constant battle. As a Payfac, you need to be vigilant and proactive:
- Regularly update security protocols: cyber threats evolve, and so should your defenses.
- Conduct frequent reviews of your security infrastructure: ensure that your systems are up to the challenge of new types of cyber attacks.
Remember, in the payment ecosystem, trust is key, and fraud prevention strategies build confidence among your clients.
- Implement two-factor authentication (2FA);
- Deploy automated risk analysis for real-time evaluation of suspicious transactions;
- Use fraud detection tools that adapt to new patterns and reduce false positives;
- Promote awareness among your merchants and their customers, offering straightforward guidelines for recognising and reporting suspicious activities.
6. Anticipate regulations: PCI DSS v4.0
By 2024, Payfacs must comply with the new version of the PCI DSS security standard (v4.0), which introduces more rigorous and flexible security processes. The main changes focus on risk analysis and improved validation methods.
What steps should you take to get prepared?
- By April 2025, implement systems ensuring the integrity of payment scripts and detecting unauthorised changes to your payment pages;
- Analyse internal vulnerabilities using authenticated scanning;
- Move away from mandatory password rotation every 90 days and opt for 18-character expressions to be maintained indefinitely.
Conclusion
Preparing for the future of payments is a vital challenge for every Payfac. This guide has delved into various key aspects: from streamlining the payment ecosystem to fraud prevention, along with international expansion.
Each step in this journey aims to bolster your payment strategy and optimise your service. Although compliance with PCI-DSS v4.0 is an important element, it's only one aspect of the broader picture. Ultimately, the goal is to provide a seamless and secure payment experience, while remaining agile in an ever-evolving business environment.
With an infrastructure like NORBr's, Payfacs can achieve not only compliance but also excel in payment management and orchestration, paving the way for sustained growth and customer satisfaction. For more information, visit NORBr.
Moreover, Payplug has developed a Payfac solution specifically designed to meet your needs, based on their 10 year experience as a major European acquirer and their know-how in terms of regulatory requirements monitoring. If you'd like to find out more, please contact their teams:
Charles is specialised in payment orchestration and international payment infrastructure. Since entering this field in 2014, he has made significant contributions, including being a founding member of the Payments and Cards Network.
