BY KLAUS SCHÖPFLIN
The latest news about Wirecard AG received a lot of attention in specialized media, social media communities, and daily newspapers over the past few weeks.
Looking beyond the current state of discussion, the Wirecard “case” will have a significant influence on upcoming developments in the areas of compliance and risk management for fintechs, payment service providers, acquiring banks and merchants.
Especially the following areas will become subject of regulatory scrutiny thus requiring banks, merchants, and service providers to adjust their business models, process, and control systems:
- Reconciliation and evaluation of merchant settlement accounts with acquirers
- Evaluation of third-party acquirer business models
- Risk management for banks and merchants for one-stop-shop payment service providers
- Multi-acquirer infrastructure for merchants
Reconciliation and evaluation of merchant settlement accounts with acquirers
The reconciliation of all payments flows related to the payout of merchant amounts from card transactions will become the focus point for regulators and auditors. This requires suitable processes and tools.
Evaluation of third-party acquirer business models
The business models of payment service providers based on the marketing of licenses to third party companies (e.g. BIN sponsorship) will be regulated and audited much more closely in the future. Suitable contracts, business processes and internal control mechanisms must be defined as well.
Risk management for banks and merchants for one-stop-shop payment service providers
The “fall” of a strategic payment service provider who is the only one supporting all important payment processes of a merchant (eCommerce, network operation, acquiring, etc.) can have serious consequences for the merchant business. Appropriate solutions must be found to minimise the risk.
Multi-acquirer infrastructure for merchants
A multi-acquirer infrastructure is becoming increasingly significant for large merchants. What are the requirements for solutions that can serve multiple acquirers and enable acquirer routing?
The SHC team will analyse and explain each of these challenges in a series of articles over the next weeks. We look forward to sharing our insights with you.