The Growth of PSPs
Payment Service Providers have made significant strides in the payments industry by being adaptable and responsive to customer needs. In the realm of B2B payments, which had been dominated by traditional banking institutions utilising their correspondent banking networks, PSPs have implemented innovative technology to streamline cross-border payments, resulting in faster, more cost-effective and transparent transactions.
The B2B digital payment market is rapidly expanding, with a value of $6.1 trillion in 2022 and an expected CAGR of 17% over the next decade. This growth is fueled by the rise of international trade and globalisation, which has led to an increase in cross-border payments. In fact, small businesses in particular have been driving this growth, as their global expansion plans have increased by 47% due to the pandemic. This trend was confirmed by a 2022 report by Mastercard. By 2032, it is estimated that the market will reach an impressive $30.7 trillion, according to data from Global Market Insights.
The Need to Overcome Data Management Challenges
Businesses strive for efficiency and cost reduction, but these goals may be hindered by outdated internal processes and legacy systems when adopting a payment service provider (PSP) solution. A common challenge for PSPs is dealing with inaccurate payment data from their clients. If the client’s payment data is outdated or incorrect, payment failures can occur, resulting in delays, additional costs, and a negative experience for both the PSP's clients and their own clients.
Additionally, PSPs, including FX specialists, may not have access to comprehensive global payment data and may not have the resources to manage and constantly update a database on behalf of their clients.
Enhancing Data Accuracy and Reliability in Payment Processing
One way to tackle this issue is by implementing a two-pronged approach. The first step involves establishing a systematic process for regularly updating reference data in an internal database. This ensures that the data remains accurate and up-to-date.
The second step involves conducting thorough checks at the point of entry for payment instructions. This means verifying all necessary information and ensuring that it is complete and correct before proceeding with the transaction. By doing so, any potential errors or missing information can be caught and addressed before they cause problems further down the line. These measures, when implemented together, can greatly improve the accuracy and reliability of reference data, ultimately leading to a smoother and more efficient payment process.
A Streamlined and Secure Solution: Improving PSP Client Experience and Preventing Payment Failures
BankCheck has implemented a convenient tool for PSP clients, enabling them to efficiently review all payment details (such as account numbers and National Clearing Codes) in bulk. By identifying any new errors that may arise, the PSP can take proactive measures, reaching out to clients and ensuring that their information is up to date before any payment failures occur. This proactive approach can greatly improve client satisfaction and perception, as it helps prevent any potential payment rejections.
The second safeguard against rejected payments includes a verification tool that validates information during the information uploading process. This feature will detect any missing or incorrect data and prompt the user to either insert the missing information or replace any incorrect data. This added layer of security can be seamlessly integrated into the PSP's client web platform through an API. This means that as the client uploads data, the API will automatically fill in any missing fields such as the BIC associated with a specific IBAN, or provide the correct bank name based on the BIC, or even retrieve the BIC from a sort code (national clearing code). As a result, the PSP's clients can conveniently input partial information in the web portal and receive guidance in completing the necessary data fields. This not only improves the overall customer experience, but also reduces the occurrence of payment failures.
When opting for a payment data solution delivered via API, reliability is crucial. A positive customer experience during the data entry and validation process is dependent on a response from the API so it is important to select a provider with a good reputation for dependability and responsiveness and a track record in terms of downtime. Are you a Payment Service Provider looking for ways to enhance your customer experience by keeping your payment reference data accurate and up-to-date at all times? Talk to us!