The exchange of money through virtual means necessitates the implementation of checks and balances. Many merchants utilize payment service providers (PSPs) to facilitate transaction processing, whether online marketplaces or individual sellers’ websites. Throughout the lifecycle of a merchant, despite initial positive circumstances, the potential for fraudulent activity remains a concern.
Leading the merchant charge as the largest source of online purchases globally are online marketplaces1. On Amazon alone, there are over nine million merchants but with two million 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 it’s important for PSPs to 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 the underwriting process, they are approved and moved into the onboarding process. 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.
When PSPs aren’t working with integrated solutions to manage the merchant lifecycle, there’s a higher chance of missing risk signals that result in fraudulent activity. Using non-integrated systems often makes 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 allow them to reduce current and future fraudulent behavior. It’s through this that they’re able to operate more efficiently without having to worry about bad actors.
For more information on integrated merchant solutions, check out our suite of merchant risk offerings.
12024, Sept. E-commerce worldwide – statistics & facts | Statista
22024, Oct. Amazon Statistics: Up-to-Date Numbers Relevant for 2024