Exchanging money virtually requires checks and balances. Many merchants use payment service providers (PSPs) to process transactions, whether on online marketplaces or individual sellers’ websites. Throughout a merchant's lifecycle, despite initial positive circumstances, the potential for fraud remains a concern.
Online marketplaces lead the merchant charge as the largest source of online purchases globally1. On Amazon alone, there are over nine million merchants, but only two million are active sellers2. However, this doesn’t consider all other marketplaces and their sellers. This includes places like Etsy, Poshmark, and Rakuten. For each of these, it’s necessary to vet every seller that comes onto their platform to protect their brand reputation and customers, and the PSP must vet the sellers with merchant accounts.
That’s why PSPs must do their due diligence and protect their best interests. To do this, PSPs need to vet each and every merchant using their payment services. It’s through doing so that there’s a higher probability of a successful PSP and merchant relationship.
There is a way to solve the multi-part solution for PSPs, and it involves (you guessed it) an integrated merchant solution. Through consolidating management, PSPs can keep a closer eye on the entire merchant lifecycle from the initial onboarding to ongoing monitoring.
Here are the key benefits of integrated merchant solutions:
Manage the merchant lifecycle from one platform
Enhance cross-team collaboration
Access merchant analytics at any time
After quality-checking merchants during underwriting, they are approved and moved into onboarding. From there, merchants undergo ongoing monitoring at different cadences, where they can be reassessed and re-underwritten at any time. By conducting routine monitoring and occasional audits, PSPs ensure a consistent flow of high-quality merchants.
Without integrated solutions to manage the merchant lifecycle, PSPs are more likely to miss risk signals that lead to fraudulent activity. Non-integrated systems often make information sharing between key operational components more difficult. By having disjointed information sources, PSPs also risk negative reputation and financial impacts.
In the tech community, integrated solutions are nothing new. However, what holds true for other industries also applies to PSPs and their merchants. Having one place to manage multiple moving parts is imperative to success. For PSPs, integrated merchant solutions help reduce current and future fraud. It’s through this that they’re able to operate more efficiently without having to worry about bad actors.
To learn more about integrated merchant solutions, check out our suite of merchant risk offerings.
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