THE BRAVE NEW PAYMENTS WORLD FOR PSPs

eGUIDE

FOR PSPs

CRAFTING SOLUTIONS FOR FUTURE SUCCESS

PSP

With the explosive growth of global eCommerce, the entire retail

industry has become increasingly digitized. The rise of a generation

expecting omni-channel experiences means merchants, and thus

PSPs, have to change dramatically to meet these expectations.

The race to offer innovative payment applications turned into an

all-out sprint after new entrants to the PSP market—acquirers,

logistics companies, card schemes, banks, accounting and billing

firms, and POS manufacturers, among others—began to change

the payments landscape and entice customers to their solutions.

The winners of this race will be those that provide superior

and secure payment solutions globally, at any time, through

any device, and most importantly, do so simply and quickly. This

eGuide explains how trends in the payments industry are influencing

PSPs and presents solutions for overcoming the main challenges

they face.

THE PSP INDUSTRY CONFRONTS DISRUPTION

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9 TRENDS SHAPING TODAY’S PAYMENTS LANDSCAPE FOR PSPs

THE EXPLOSIVE GROWTH

OF eCOMMERCE

In 2015 eCommerce merchants netted

$1.9 trillion in revenue, are forecast to earn

$2.2 trillion by 2020, and projected to

continue this upward trajectory for years.

CHECKOUT CONVERSION RATES

ARE KEY TO SUCCESS

Sub-optimal conversion practices cost

merchants $151.8 billion in revenue in 2015.

Most merchants do not realize the extent

of their losses.

OPEN API TECHNOLOGY IS

PREPARATION FOR THE FUTURE

The payments industry is dynamic, which

means PSPs must be flexible and able to

adapt quickly. “Open” technology enables

the flexibility and simplicity merchants

demand.

ONLINE SHOPPERS CROSS

BORDERS EFFORTLESSLY

Online shoppers ignore international

borders, raising cross-border sales to $300

billion—25% of total global eCommerce—

in 2015. Cross-border’s share will continue

to grow.

THE OMNI-CHANNEL PAYMENT

EXPERIENCE

Two-thirds of online shoppers use mobile

devices to make purchases, a figure that will

continue to grow. Omni-channel payment

processing capabilities are essential for

merchants.

SCALABLE, NEXT-GENERATION

PAYMENTS INFRASTRUCTURE

Merchants want their PSP to build and

provide infrastructure that can scale rapidly

and easily.

THE CONTINUED RISE OF

ALTERNATIVE PAYMENT METHODS

Alternative payment methods are forecast

to comprise 59% of global eCommerce

payments by 2018, having already overtaken

cards in 2015.

FRAUD ADAPTS AND

MUST BE STOPPED

Fraud rates continue to rise and cross-

border fraud rates average three times

more than domestic. PSPs with effective

and embedded solutions possess a distinct

advantage.

PSPs FACE NEW COMPETITION

Bank and non-banks will shift their focus to

traditional PSP-sector business, in order to

control a greater part of the payments value

chain.

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1

2

34

5

ENABLING EFFICIENT CROSS-BORDER

PAYMENTS PROCESSING

OFFERING AN OMNI-CHANNEL

PAYMENTS EXPERIENCE

PSP

STOPPING FRAUDULENT

PURCHASES

PROVIDING TOOLS TO INCREASE

CHECKOUT CONVERSION

EMPOWERING MERCHANTS WITH

INNOVATIVE, STATE-OF-THE-ART

TECHNOLOGY

THE MAJOR CHALLENGES PSPs FACE WITHIN eCOMMERCE

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PAY

CHALLENGE

Two facts—global eCommerce payments

revenue growth has exceeded expectations

and in 2015 alternative payment methods

overtook credit cards—combine to present

three unique challenges for PSPs expanding

beyond their domestic market. First, PSPs

need to consider the impact of alternative

payment methods. Second, payment habits

and consumer behavior differ by country.

And third, the integration of these different

payment methods can be time-intensive and

incur high development costs.

SOLUTION

Successful international expansion requires

offering not just the right payment methods

and acquiring options, but also the ability to

configure them quickly and efficiently. It has

been shown that simply offering the three

most popular payment methods in each

country can increase checkout conversion

by 30%. This can be achieved either

through partnerships, outsourcing to

a payment provider, or by connecting

to an existing modular payment

gateway—that can “switch on”

alternative payments as and

when needed—to achieve rapid

global expansion.

ENABLING EFFICIENT CROSS-BORDER PAYMENTS PROCESSING 1

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CHALLENGE

Online shoppers, in the age of the

smartphone, have more information

than ever at their fingertips. These

self-empowered consumers have high

expectations and assume online and offline

channels will blend for a seamless shopper

experience. Merchants want their PSP to

provide the technology that enables such

solutions, to secure new revenue streams.

SOLUTION

A PSP must adapt to ever changing

merchant needs and offer successful

integration for mobile point-of-sale,

mCommerce, eCommerce and in-store POS

transactions. By offering this technology

the PSP enables the merchant to provide

a consistent retail experience across all

channels, to drive shopper conversion.

In addition, a PSP that delivers the full

solution from consolidated reporting to

API integration and the ability to monitor

all channels will empower their merchants

to remain agile and profitable in such a

competitive landscape.

OFFERING AN OMNI-CHANNEL PAYMENTS EXPERIENCE 2

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CHALLENGE

Growing online businesses are constantly

under threat from fraudulent shoppers.

PSPs are expected to offer their merchants

a fraud prevention and risk management

solution that is closely tailored to their

individual needs, configured for local habits,

and capable of adapting rapidly.

SOLUTION

Configuring fraud prevention strategies for

each market is essential to protect hard-

earned revenues. In the card-dominated

U.S. market for example, chargeback

management solutions help companies

manage fraud. In Germany, where two-thirds

of online purchase are completed by open

invoice, behind the scenes background risk

checks that determine a shopper’s reliability

are a more appropriate solution. To give

another example, 3-D Secure, although

good at stopping fraud, is seen by many

as a conversion killer. However, in some

markets, such as India and Russia, 3-D

Secure has been shown to have a positive

impact on conversion.

STOPPING FRAUDULENT PURCHASES 3

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PAY

CHALLENGE

Sub-optimal conversion practices cost

merchants $151.8 billion in revenue in 2015,

with most merchants not realizing the

extent of the losses within their checkout

process. What looks simple to a shopper—a

straightforward and frictionless checkout

process—is anything but easy to set up

behind the scenes.

SOLUTION

There are many aspects that need to be

considered in the checkout page, like

offering trusted logos, preferred payment

methods or efficient payment processes,

but the payment form is the heart of the

checkout process. Get it right and no one

even notices it. Get it wrong and shoppers

become uneasy and abandon their shopping

cart. A PSP needs to consider two important

aspects when delivering a good payment

form. First, it must securely handle payment

data, often through tokenization. Second,

it should embed into online shops, avoiding

offsite redirects and adhering to shops‘

look and feel. Practically invisible to

shoppers, embeddable payment forms

play an important role in frictionless

checkout processes and high conversion

rates.

PROVIDING TOOLS TO INCREASE CHECKOUT CONVERSION 4

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PSP

CHALLENGE

Global eCommerce is growing rapidly and

the volume of international payments can

cause headaches if merchants demand

myriad payment methods, reporting

options, or fraud prevention tools.

SOLUTION

The underlying payment technology a PSP

delivers needs to enable adaptability in

order to keep pace with a changing industry.

RESTful API architecture has become

the foundation for greater technological

openness because it enables simple,

innovative, individualized solutions. By

building upon an existing open payment

infrastructure, PSPs overcome their legacy

systems, and developers are empowered

to create their own value-added services,

features, and applications. PSPs that

embrace openness also connect to

sophisticated reporting and fraud tools

via a single integration.

EMPOWERING MERCHANTS WITH INNOVATIVE, STATE-OF-THE-ART TECHNOLOGY 5

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Mixing the right formula that raises a

PSP above the crowded payment

landscape requires a strategy that adapts

to new market trends quickly. It requires a

foundation comprised of a secure payment

setup featuring multi-currency and cross-

border functionalities as well as conversion

and fraud prevention tools configured for

each market and vertical.

PSPs who have an existing payment

gateway, but need a modular solution to

meet the full demands of their merchants,

can partner with a provider for just what

they need. A gateway solution based on

open API technology that features white

label tools that incorporate the PSP’s

corporate design will be much faster and

cost-efficient than building from scratch.

By building upon an existing open payment

infrastructure, PSPs overcome their legacy

systems and developers are empowered

to create their own value-added services,

features, and applications.

Innovation is at core of ACI and developing

technology that drives success is our

focus. Outsourcing to the ACI PAY.ON

payments gateway enables PSPs to reach

domestic and international markets faster,

reduces merchant attrition, and increases

conversions from existing merchants while

attracting new ones. The entire gateway

opens the door to a payment network

of more than 350 alternative payment

methods and acquirers and is accessible

through a single integration with a unified,

RESTful API.

PSPs looking to expand their business with

an end-to-end payment solution can leave

the heavy lifting to ACI and benefit from the

most advanced eCommerce solution with

the simplest integration process.

CONCOCTING THE PERFECT PAYMENTS FORMULA

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ACI Worldwide, the Universal Payments (UP) company,

powers electronic payments for more than 5,100

organizations around the world. More than 1,000 of the

largest financial institutions and intermediaries as well

as thousands of global merchants rely on ACI to execute

$14 trillion each day in payments and securities. In

addition, myriad organizations utilize our electronic

bill presentment and payment services. Through our

comprehensive suite of software and SaaS-based

solutions, we deliver real-time, any-to-any payments

capabilities and enable the industry’s most complete

omni-channel payments experience.

CONTACT US

To learn more about ACI, please visit

www.aciworldwide.com

You can also find us on Twitter

@ACI_Worldwide

Americas +1 402 390 7600

Asia Pacific +65 6334 4843

Europe, Middle East, Africa +44 (0) 1923 816393

ACI BUILDS INNOVATIVE PAYMENT TECHNOLOGIES

THAT DRIVE SUCCESS

ACI’s UP eCommerce Payments solution delivers the

ultimate in simplicity, global connectivity, and security.

Through a single integration to a unified RESTful

open API, merchants gain access to the largest global

payment network. The industry-leading payment

gateway technology enables merchants to build

payment apps and features directly on the platform.

Find out more about the

ACI UP eCommerce Payments

solution for PSPs.

© Copyright ACI Worldwide, Inc. 2016ACI, ACI Payment Systems, the ACI logo, ACI Universal Payments, UP, the UP logo, ReD,

PAY.ON and all ACI product names are trademarks or registered trademarks of ACI

Worldwide, Inc., or one of its subsidiaries, in the Unit ed States, other countries or both.

Other parties’ trademarks referenced are the property of their respective owners.

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