We had the opportunity to interview PSP Angels – a payment consulting firm. Are you wondering who they are and how they can help you? Read our interview
Who is the high risk merchant? What aspects make them high-risk companies?
A high risk merchant is a merchant with a greater risk of financial failure and exposes banks and PSPs to a danger of financial and reputational loss. It is important to remember that banks and PSPs are licensed institutions, and regulations are getting more strict day by day. These institutions have to be very careful with the clients they take as they could take a client who could be carrying out activities that do not comply with the regulations, then the banks lose their license, and eventually shut their whole operations down. Thus, the banks and PSPs have very strict compliance and they categorize merchants as ‘low-medium-high’ risk. Coming to the ‘high-risk’ merchants, there are several reasons why they can be regarded as ‘high risk’. This depends on their business model some business models are more prone to fraud and chargebacks, it also depends on how the merchant is selling their product for example if it is being sold on a recurring /subscription method this increases the risk involved, another reason is the reputation of the merchant if a merchant has a negative reputation in the market they are considered high risk, lack of certain regulation requirements for example lack of a license when it is required also makes them high risk, their target markets for example, if a client is an offshore licensed forex company and wants to target EU customers, although they are licensed, they can still be deemed unfavorable as their license is outside of the EU.
How do you help in getting payment solutions?
Given our answer in question 1, the obvious issue here is the extremely complex and strict compliance requirements banks follow. Although a merchant might think that their business model is very simple, there can be many aspects, as we explained above that deems them as high-risk. We combined over 12+ years of experience in the finance and banking sector to really understand all these issues that merchants from any industry face and help them overcome the issues when it comes to payments. We focus on understanding the client’s needs and have hundreds of PSP and banking partners, whom we match up our clients according to their model and needs. We handle the whole application process from start to finish, which includes handling KYC and filling forms, for free and inform our clients about who accepts them and the fees offered so that they can make an informative decision for their options. In addition to this, we offer personalized payment consulting services to help clients optimize their cash flow, their payment/banking setup and to assist with special requests.
Who are your main competitors and what is your USP compared to them?
We do not have many or main competitors per se. The payments industry is very interconnected, so we have many partners, not only PSPs and banks, but also resellers, who all work for the same goal which is to help clients, so we always seek cooperation rather than competition. Our business model is very unique, as we have placed ourselves in the center of the payments industry. This allows us to always keep up to date with the industry and help our clients at the best potential. Our unique selling point is that we specialise in high-risk, which is not so easy to find, as most of the time people regard high-risk very negatively but that is not always the case. A small detail in the business model and a client is immediately high-risk in the eyes of the banks, so we focus on understanding the industry and consult our clients in solving their issues in payments.
What was your greatest success?
Especially in the last year, our business has been growing exponentially and the PSP Angels team is very international- some of us are in Cyprus, the Philippines, Indonesia and Kenya. Working together successfully as a team despite the challenges of working from home whilst delivering results to our clients at a very high standard for us is the greatest success as everything always starts internally.
How to minimize fees for high risk merchants?
There are several ways we achieve this for our clients. Firstly, we consult them on their business structure; this includes their company structure, websites etc. Compliance of the banks is very strict, therefore it is vital that the client has most of their details right. For example, if a client has an offshore presence, but is targeting the EU, we can help them incorporate a company in the EU and move their head office to the EU so they can have a presence in the EU. This allows the client to get better fees. Also, fees can be minimized through negotiation. If after a couple months of processing the client brings good volume to the PSP, the PSPs are open to lower fees for the client.
What features should payment solutions have?
This depends on the needs of the client and the industry they are in, for different clients, there are different types of payment solutions offered by different PSPs. For example, gambling clients need pay-ins and pay-outs. Some other clients, most of the time forex clients, seek an array of APMs specific to their target markets. This is the reason why we have hundreds of partners so we can offer our clients all the payment solutions they need.
What was the biggest challenge for you?
The biggest challenge is the subjectivity of this industry. We need to deal with the ever changing needs and compliance criteria of the PSPs and banks and to educate the merchants about the market in terms of what is the current situation.