To stay competitive in a continually evolving landscape, payment service providers (PSPs) are looking beyond transaction processing. From meeting rising customer needs for seamless, personalized payment experiences to optimizing operations and mitigating fraud, firms face a host of challenges that require next-generation payments technologies and comprehensive data strategies.
But many PSPs face significant data challenges that limit their ability to leverage these valuable assets, as Blankfactor’s President, Global Head of Payments Petru Metzger shares. Here are 6 of the most common roadblocks and solutions to unlock your payments data.
1. Fragmented data landscape
Legacy systems and past mergers can leave data scattered across disconnected systems and formats. This fragmentation makes it difficult to generate a holistic view of customer behavior, transaction trends, and risk profiles.
Solution: We can help you implement a payments data unification strategy. This involves integrating disparate data sources, establishing data quality controls, and creating a single source of truth. Consider cloud-based data lakes for cost-effective storage and scalability.
2. Merchant reporting difficulties
Merchants today expect real-time access to consolidated reports on collections, payouts, chargebacks, and other key metrics. Manually compiling data from various systems slows down operations and frustrates merchants.
Solution: Build robust merchant reporting platforms with intuitive dashboards. These platforms should unify data across systems and empower merchants with self-service analytics, allowing them to drill down into transaction details and make informed decisions. Utilize APIs to provide easy access to this data.
3. Complex risk management
Effectively managing risk requires sophisticated data capabilities that many PSPs lack. Traditional methods may not successfully identify emerging threats and prevent fraud in real time.
Solution: Leverage advanced analytics powered by AI and Machine Learning (ML). Build predictive risk models that identify suspicious activities, optimize transaction routing and approval rates, and ensure compliance with evolving regulations.
4. Transaction routing and reconciliation challenges
PSPs often work with numerous acquiring partners, creating complexities in routing transactions to the optimal provider and reconciling data from diverse sources. Manual reconciliation is a time-consuming and error-prone process.
Solution: Design an optimal transaction routing architecture that minimizes costs and maximizes approvals. Implement a unified data platform that seamlessly integrates and reconciles data from all acquiring partners, automating workflows and saving valuable resources.
5. Billing and invoicing difficulties
Calculating transaction fees accurately and generating clear, unified invoices for merchants can be a complex and time-consuming process, especially for large PSPs. Factors like transaction type, risk level, processor, and payment method can significantly impact fees.
Solution: Implement intelligent data automation to streamline billing and invoicing. This involves solutions that consolidate transaction data from across multiple systems, apply complex fee structures accurately, and generate unified invoices for merchants. Automating these processes reduces errors, improves efficiency, and creates a more transparent and satisfying experience for merchants.
6. Limited ability to leverage advanced analytics
While basic data management may be a challenge, neglecting advanced analytics leaves significant value untapped. PSPs miss out on opportunities to offer merchants valuable services like:
- Personalized loyalty programs based on past transaction data.
- Data-driven lending options for merchants based on cash flow insights.
- Granular customer behavior insights to improve targeting and marketing efforts.
Solution: Invest in data infrastructure, AI/ML capabilities, and data science expertise. By unlocking the power of advanced analytics, PSPs can create a win-win scenario, providing merchants with valuable tools and generating new revenue streams.
Unlock payments data with Blankfactor
PSPs’ data needs and opportunities pose deeply complex technical challenges. From integration requirements to ensuring security to the challenges of transaction optimization, PSPs should look to partner with payments technology and data design experts to implement solutions.
At Blankfactor, our practice leads have decades of experience across the payments ecosystem. From mobile apps for major card networks and smart routing for the acquirer value chain to data strategy for PSPs, we’ve helped enterprises and fintechs unlock value and drive impact.
In one case, we helped our client with a digital transformation of a legacy retirement data environment, delivering a next-generation Retirement as a Service (RaaS) product. For another partner, a global financial services leader, we teamed up with Snowflake to design a secure and scalable data ingestion architecture. Our solution leveraged event-driven data design and sensitive data safeguards through AES encryption.
Unlock insights and impact with our expertise in payment gateways, complex data design, payment gateways, and digital engineering. We can help you with:
- Payments data unification and single source of truth creation.
- Automating tasks like billing, invoicing, and reconciliation.
- Implementing advanced analytics for deeper insights.
- Building secure and compliant data architectures.
Meet with our payments leaders and learn more
We can help you transform your data into a strategic asset that drives growth and innovation.
Headed to ETA Transact from April 17-19 in Las Vegas? Meet with our team to find out how we can help you with your most challenging payments data needs.
To discover more about how we help PSPs unlock the power of data, get your copy of our latest guide: “Future-Proofing Your Data Strategy: A Guide for Payment Service Providers.”
