Profiling your processing business

15 Apr 2022

Ran Cohen:  Okay, we start our event.

Daniella Ioannidou: So let me just introduce myself. My name is Daniella and I'm one of the business development representatives here at Bridger pay. And I'm with Ran now, we're gonna host the webinar today. And so we have this series of webinars. And we like doing that because we've been in the payments industry for quite some time and we would like to share different tips with you guys. Based on our own experiences, personal and professional with different clients. So yeah, and today we're gonna talk about profiling your processing business. So one of the responsibilities let's say I have as a representative here at Bridger pay is understanding what merchants do. Their needs, their challenges within the industry they are in, especially when it comes to their payment processing. I'm the first person they come in contact with. And it's really interesting to talk to such a big spectrum, let's say of different merchants. So before we dive into it more, I'm just going to explain briefly what profiling your business means. And it's about understanding how a business operates in terms of their business structure, their industry, payment processing, and by doing that, you will understand the needs they have and what challenges they're having with their payment processing. So, Ran, can you please also share your views when it comes to what profiling means in the payments world?

Ran Cohen: Well, I think any business that is building a product, building a website, building a team, right to operate his business. Usually businesses doesn't really think about the processing part so much and so fast in the process. And they usually tend to deal with so many other stuff in the chain. But when they come to processing, the mind is saying, Okay, it's supposed to be quite easy. I'll just go to the processing account in the processor that I have in mind that I know, from my country for my day to day. Get it connected into my website and start collecting money or start the process and sell my goods or whatever I'm selling. So it's not that easy. And whenever you are going to your first payment provider asking to open a processing account. Suddenly, you get a longer list of questions, big excels, PDFs that you don't see the end of it. With lots of documents to submit, lots of details to give, changes in the website that are required in order to be able to support this payment provider and also to integrate this payment provider into your product, into your website, into your business. So it's not as simple as it sounds. We see many many businesses that when they come to us if they are startups and they're just started thinking about adding the first payment provider and they hit this wall of documents and requirements. And when we meet them, we try to simplify things for them and break it down for them.

Daniella Ioannidou:  So that brings us to why? As you mentioned, it's important to because there's such a big amount of different categories that exists when it comes to merchants. You can't put a start up let's say and a big established company the same group because they have different needs. They have different challenges. For example, a startup maybe is trying to find more payment solutions whereas a big company might be finding it too hard to manage everything. So here we have a few things, let's say sections as to why it's so important? Now as mentioned, the categorization of your business impacts your payment processing. The first thing when it comes to connecting to PSPs is to understand that you're not just because you want a PSP doesn't mean that you can have them and there is a long process of application. And it's like dating, they can say yes or no to you. And it's important to have some realistic expectations as to what PSPs would fit best for you. What do you think Ran?

Ran Cohen:  Well exactly. So you have different payment providers, different methods. Those payment providers are connected behind them and basically operating the processing flow through requires and each acquire have different regulation that is complied to. And in the end, when you're coming to open a processing account you need to have an entity that this entity will be submitted to those payment providers and be accepted. So for example, if you have an entity from Southeast Asia and you want to process with a European payment provider, you might find it a bit hard to get a processing account without a US entity. In Israel, we have the same issue with Israeli ecommerce websites that want to process in the US and the US acquirers are requesting them to open a US entities. We see it in the Arab world the same when they want to go to and processing in the US or in Europe. So there are different limitations that you need to obey to if you want to work with the specific payment providers and get those payment methods that they are offering inside your checkout.

Ran Cohen:  So you definitely want to know as a business and the beginning of the profiling of your business is to understand, okay, technically am I able to connect any payment provider? Am I able to connect only specific payment providers? It's already narrowing down your list. And if you have limitations then obviously only those payment providers are the one that you can connect. And if they don't give you a processing account then you are in a real problem that you need to solve. And that's problems that we usually get a lot in Bridger. And in terms of methods, you want the specific payment methods in Brazil, or in Africa, or in GCC. So to be open to those payment methods, you need the processing account with a local payment provider, which will have his own limitation and you need to walk with them. And obviously commercial, so they could have a few different profiles of businesses, and each one of them would have completely different commercials, offers from the payment providers. And because that's also a part of the game. So if you want to take it and understand how to profile yourself is first of all need to know what your needs? Where do you want to process? Where your clients are coming from? Where is your entity base from? Your bank account? Where is your settlements are coming from, or coming to? Because that's another part which is important in PSPs relationships. And that's all of that just before you even go and try to find your first payment provider. You see a lot of businesses, they tried many many applications and stopped in the middle and couldn't proceed because there was this limitation. And for some businesses, you really need to match the right one.

Daniella Ioannidou: I think that's the thing, especially when it comes to region. It's not just the Geo targeting that matters. Because again, like not all PSPs can process everywhere. But as you said, there's different regulations like the example that you mentioned, an EU entities needed for any new acquire. So can you please tell us a little bit more us to how can finding the right PSP for you impact your business from doing this process?

Ran Cohen:  Sure. Let me just before, guys if you have any questions during the session, you're more than welcome to pass them through the chat. So look, the application process like we said could be a bit tiring and lengthy, we're talking about a lot of documents and details that you need to give these payment providers and when you really don't know where to go to and it can become a problem. You definitely want to be able to pick the right one not to go through this process a few times. One that already pre approved you. So some payment provider that you as a business are already in his scope of work, that type of businesses that he's supporting. And you want to know that you're going to those payment providers, obviously ones that cater the countries that you're serving. Countries that you're selling to. So you want to choose right. You want to choose right not only because the application is long, it's also because there is an integration to do. And when you integrate a payment provider, and then suddenly he cannot transfer you the settlements because your bank is not the bank that he needs and you suddenly need more and more payment providers in order to process and that's becoming a hassle.

Daniella Ioannidou: Now, in this slide actually we were showing a little bit more about the process when it comes to the application for a PSP. So above here we see okay, so the region matched. Probably, the region that the merchant was targeting is also region that the PSP is also processing in. Payment methods also matched commercial agreements. But here we have rules and regulations. So even if it's only one little bit that doesn't match, it can be a failed.

Ran Cohen: Also, you can break them down to many many many many different small parts. Obviously, payment providers wants to know your information, your card, your entity. They want to know, it's basically the KYB know your business vouch of the banks today. And it gets worse in time. And they want to know more and more details. And that's obviously understood when they are giving you in the end the processing account for you to process your clients with. They want to know about the product and about the shipment and about that if you work before with a payment provider, obviously it gives you a big edge. You can show some processing the story. You can show them that you're already approved by another payment provider that helps a lot. And of course each website and each business with his own vertical. So each vertical can have different regulations that you would need to apply to. Without those regulations, the payment providers would not accept you. So this should be prepared in advance when someone is approaching a payment provider issue. They have all the package ready made to be sent to different payment providers in order to in the end negotiate the commercial agreements, the payment methods that they would open them, their regions that they would be able to process sometimes can all be sometimes sold when the rules and regulation parties dict.

Daniella Ioannidou: I have one more question. So obviously, you've been in this industry for years and you have a lot of experience in this. It might be difficult for merchants to understand how they are fully qualified for a PSP. But you can tell just by understanding a little bit about their business, whether they can be approved or not. Have you ever had a situation where okay, you thought that this merchant is definitely going to be accepted by this specific payment service provider and then been declined, rejected?

Ran Cohen: Well, first of all of course. They never keep surprising us. And it's a learning process because the rules and regulations and compliance is changing rapidly between all payment providers we're connected today to over 500 different payment providers and methods. And each one of them has his own set of compliance rules and profile of merchants that he accepts and the profile of commercials that you offer them and payment methods and features that he supports. And you want to know that you've been covered. And the relationship with the payment provider is also something that it's starting and growing. The commercials you've got on day one is not the commercials you will get if we get after six months or a year. It can get better and better. But yeah, the pre approving of merchant is is something that we do here in Bridger for enterprise merchants that use our product. And then what we do is basically submit them to multiple payment providers. Just because we really don't know if one will accept or not. So our approach is submit to as much as possible and see which one of the payment providers will give the client the best from all walks.

Daniella Ioannidou: So I would imagine that this submission of so many applications could be very time consuming as well, if the merchant had to do it on its own.

Ran Cohen:  Yeah, exactly. You need to first of all go and understand which of the 1000s of payment providers you having in the world is right for you. And then start getting to the application process which again if you go for it by yourself, it could take a few months. That's really, for business that time to market is important for them. That's crucial. 

Daniella Ioannidou:  Okay. So as we have covered now, how profiling your processing business can link to your payment processing. Here, we come to a point where we explain a little bit more about the categories that exist. Now here, we have a very general theorization let's say, and they're linked to industry. So here we have finance for example in gaming, which are connected to high risk. Medium risk, we have travel and low risk, it's SAAS companies. But if you pay attention, we have ecommerce connected to both low risk and medium risk. Now again, this is just a general categorization. It's not black and white type of thing. It's not a rule that you have to abide in. There's many more things to take into consideration. So Ran, can you please give us some examples as to why a merchant maybe fall into a different category from the general outline we have here?

Ran Cohen: Yeah. So we tried to break it down to two three main categories of risk of high medium and low. Payment providers like to look at businesses, in those terminologies and categories, where the profiles of the business could be allocated to different risk categories. And it's the same, let's say business and I could have one business in ecommerce and I would be high risk or medium risk and you would be a complete low risk business, and we both sell shoes. So, but I'm selling it from China and I'm sending it to the US. And you are from the US selling to the US. So just by the location, the risk also can categorize by the shipment of the product that would go from the China to US, even though you're selling to US, but you're buying from China, your product. But the payment providers don't care because that the product is in the US and it gets shipped in let's say I don't know 24 hours or 48 and it becomes a low risk. So ecommerce is a vertical that can be allocated to a few categories. And we can see this software as a service that basically bosses subscriptions. So subscriptions is us doing the same. Subscriptions like we do for a gym, we do it and usually even if we don't go we still pay. And that's something with a low risk because in the end when we go and we want to close the gym subscription they come and tell us about look, we have an amazing view and so you have to stay.

Daniella Ioannidou: Maybe there's new classes soon.

Ran Cohen: They make you stay and the subscription goes on. So yes, subscriptions are becoming a part of the low risk called. Travel definitely in COVID time became a medium to high risk in the COVID times where basically plane tickets were issued without the plane leaving and there's the amount of refunds were enormous. So, travel is today struggling industry that is moving between the high and medium risks categories. And you have of course the gaming and finance that belongs to the high risk. Payment providers are expecting them to provide regulations and certifications etc. So that's another layer of requirements from the high risk. And of course, every layer is less and less in the requirements. For example low risk, you can get a processing account in a complete self from bowling. So you can go to stripe and buy yourself, finish the application online and complete and get the processing account. And you have the same in others. But when you go to the next risk club as it become.

Daniella Ioannidou: More difficult, for sure. So as we covered this general categories. We move on to the true aspects as to what will help you narrow down your PSP hunting but also narrow down as to in what category you actually truly feeling. So we mentioned industry earlier. And we also mentioned location a little bit. Now can you give us a little bit more examples when it comes to the location of the merchant? I know about the E commerce that you mentioned, but maybe more in the higher risk industries? How does location impact?

Ran Cohen:  So location can meet is from both but both from the merchant side from the business side. Where are you? Where is your entity? Where is your bank account located? And that's one thing that is important for them to understand if it's in Europe or out of Europe. If we're talking about the processing location. So where do they want to process? If it's India, then we're talking about a completely different set of providers that are processing in India. For high risk, the problem is much more intense, because again they have the regulation rules and they have different guidelines on where they can sell and where they cannot. With which regulation and with which bank account and which entity. And so with high risk, it's much more complicated and they are prepared for that with multiple formations that could be submitted to different payment providers and work with different agents. You obviously want to know and the payment provider want to know and that's a part of your profile, as when you go to the payment providers, if you're a startup or if you're already a business that works with the history. Business with history is a business with clients that already are showing trends and showing consumer behaving processing. And you can see if they have chargebacks. if they have refunds? How is this business is being handled and you can see all of it from its processing history.

Daniella Ioannidou:  Actually talking about payment history. Now we also get a lot of startups without a payment history. It's not that it's, of course, it makes it harder to find a PSP like that. But definitely if you have a payment history can really up your chances in connecting to more PSPs than without one, let's say and especially in the higher risk. However the licensing, the type of licensing that you could have in the high risk can really change that. So in terms of licensing, obviously there's different types of licensing when we're talking about the high risk. Can you maybe elaborate more on the quality or types of licenses and how can that impact the profile of a merchant?

Ran Cohen: Okay, so if you speak about the high risk then if you take the high risk so you have gaming and finance. Now NFT's are coming. It's the few big thing and we get this merchants coming into Bridger with selling a painting in 10s of 1000s of dollars and we're trying to find them and help them it's not that easy as it sounds. But it's a good example because also NFT's which is a completely new thing and that is coming now. And you already can finger point this payment provider that are supporting those areas and that are accepting NFT's merchants and in the end there is nothing that you really can't process. When you want to process a certain country. It all depends on the commercials that you will get of course, and the risk that payment providers is taking on you. When you speak about licensing and you break down gaming and finance. So in gaming, you can see the Curacao license, which is very popular and many many gaming operators are using it. But it limits them with the payment providers that they can apply to.

Ran Cohen:  So payment providers which large established and then let's say with the highest approval ratios across Europe, those payment providers would require you to have European gaming license which is something from England or other countries but they would want a local license to be able to process you and give you accounts. If you go to Finance then you have the CySEC in Cyprus, you have FCA in London that is much more effective and obviously much more strong than anyone else. You have ASIC in Australia that allows financial companies to process in Australia. So different licensing allows you to work with different payment providers, which are the best in this regions. That's what you want for your business. To not connect the best means not only process less, it's to send the client a message that only a part of you would be able to pay with me the rest would probably get the decline. And that's a big loss for a business that is trying so hard to bring users inside. And in the end losing them just because they could not finish the transaction. Guys, if you have any questions, you're super quiet. I don't see any questions from you. Let's see if we have the polls done.

Ran Cohen:  Okay, so how many applications have you submitted dependent providers? It's, we see people in all groups, which vertical your business belong. So we have retail and travel and ecommerce, people here in this event. Again, it really it really connects to any business in any vertical. The application and the profiling of the business. And in every vertical you can see the sub profiles. Inside the verticals, you can see how payment providers are considering different merchants in different terms. The idea of the fact that I'm just going to go and get an account and everything would walk super fast and is an idea that must be really understood what's the process that you're going to go through, you need to be prepared both in your business and in your documents. And the ability to integrate and add this payment provider and this API into your website. Let's see if we have questions.

Daniella Ioannidou:  No, I don't think so. I think we you're explaining things very well today.

Ran Cohen:  It sounds like you ensure that all PSPs requirements for all the merchants are covered by Bridger pay and merchants are verified and correspond to the different PSPs requirements. Is that the license what you mentioned? No, no, no. Okay

Daniella Ioannidou: That's a good question, Alex. Thank you.

Ran Cohen: So first of all, the requirement that payment providers and we obviously are connected to many many different payment providers. When a merchant or client comes to Bridger and we profile him. Obviously we are able to slice and dice the payment providers that are walking with us with the knowledge of what we have in our hands of which type of merchants they accept or not, and send this merchant be pre approved by the payment providers region do not pre approve, we cannot verify, we can send your application to fail to 40 different payment providers, give you to the table. A few different payment providers that pre approved you with our commercials for you to start negotiating with each one and decide who you want to work with India.

Ran Cohen: The licensing that we've mentioned is. Danielle asked about the high risk implications of the applications so merchant so each merchant in the high risk if it's on finance, for example needs to require licensing in order to operate his business. And those different licenses are required by the payment providers and. So in order for you to get a processing account. Okay, Alex is asking us another question. What are actually your formal agreement with the different PSPs? Well, we don't have formal agreements with a PSPs. We are integrating those PSPs into Bridger. The idea of Bridger is to give you a neutral background. Ground to build all your payments on top connect any payment provider you as a business want to connect. This is why we are connecting so many different payment providers into Bridger. I think two or three a week. And in order to give our merchants the flexibility to decide. I have a relationship with that payment provider. I want to work with him. I want to connect him. So of course Bridger would not be the one that will tell you yes or no. So the idea is to give the flexibility to our clients and be completely neutral and agnostic.

Daniella Ioannidou:  And also to add to that. It's very time efficient. Because again, we do deal with clients on the daily. We understand much more of the requirements that the PSPs will look into when it comes to approving your notes. Not that our opinion is certain not at all, but we understand what they're asking for. And the whole process of the application of connecting to different PSPs. It's much faster. And that saves you not only time, but resources. 

Ran Cohen:  Yeah, but that's again also something that everyone can do alone. And apply to payment providers like we said, our payment providers that are completely no touch today. And you can finish an application process in a few minutes. And there are payment providers which will require you more details. You can see in our website, different payment providers categorized to verticals and regions and find different options for you to connect by yourself. So I hope it answers your question, Alex. Guys, if you have more questions, we'll be happy to answer. Alex is asking us something. Let's see. Good.

Daniella Ioannidou:  Now, actually, back to the slide. One thing we didn't cover was the website, which is actually very important. Now, our world is becoming more digitalized. Everything is about the internet. And so are our payments nowadays. So it's really important to have a website that's nicely designed because like in a physical shop, what will bring you into the shop is the window display. The window display is your website. And it's important to be very clear because that's also something that PSPs will look into and especially talking about the high risk now. Other things that the PSPs is required for you to state in your website, like the regulations or documentation. These are things that are very important to including.

Ran Cohen:  Obviously, like you said it's your window to our business. But we also see on a daily basis, the businesses that are starting and they're coming to us and asking for help in processing and when we start asking them okay, so what's your website and no it's not built yet it's in process. So when you go to a payment provider, it will again tell you come back to me when it's ready. So, payment providers wants to see the product wants to see what you sell. Wants to see the process of the shopping cart, the checkout. We obviously the PCI if it's relying on the PSP, and the PSP and you're embedding a PSP iframe in your website or redirecting to a PSP payment page. So the PCI is also a question that you need to know and handle. And yeah, so a website is a must to have. And not just the website, the flow of the sale. And like we said, the whole thing. And besides that, the privacy policy that Terms of Use. Company details, address, contact. So all of that needs to be in the website. They're looking for it. And yeah, so that's one of the things you want to have before you submit.

Daniella Ioannidou: Because this again this will truly capture what your business is about. Think of it as your voice to the PSPs almost.

Ran Cohen: Yeah, they need to see what you said. 

Daniella Ioannidou:  Yeah. So is there anything else that you would like to discuss in this slide Ran?

Ran Cohen:  No.

Daniella Ioannidou:  No? Okay.

Ran Cohen:  I think that the most important thing in the profile world would be the industry, and the industry that you work and if you're established or startup. So these are the most important things, when you want to profile. The rest can be solved with different payment providers. So if you don't have the entity that the payment providers are looking for, then the other payment providers that can accept this entity and walk with you. So everything almost can be solved. But there are a few things which are important for you to have. And if you don't then again it's not like if you're a startup, you won't be able to process. You might be paying more than the established business that can negotiate his terms and time.

Daniella Ioannidou: To add on the startups, and when the biggest difference obviously small and big companies about how big they are, how much worth their companies is on. And it's very important for merchants to understand that the scale of their business also much as the scale of the PSP that they could potentially match to. Of course, there are exceptions. But if a PSP is too big, then maybe it's time for you to move on a different batch until you reach that stage.

Ran Cohen:  Yeah, so you know size of a payment provider can determine a lot of things, especially the complexity, especially the type of the profiles of businesses that you will accept. From one side, huge PSPs can accept multiple amount of merchants. And be amazing in what he's doing. But he will still say no to many many others in many many many countries that he doesn't want to accept and don't want to take the risk there. So yeah, let's move on to the next slide

Daniella Ioannidou: It's just q&a now.

Ran Cohen: Guys, if you have any questions, please let us know about your experience with the payment providers. Your experience with applications and requirements that you had from payment providers. Because we will keep learning all the time about new requirements and

Daniella Ioannidou: Or maybe requirements that don't make sense. So maybe we can explain as to why they make these requirements. So feel free to just pop in the question.

Ran Cohen:  Okay.

Daniella Ioannidou:  Maybe we covered everything.

Ran Cohen:  Correct. Okay. Good. So thank you.

Daniella Ioannidou: I think we're coming to an end of the webinar. Thank you all for joining us today. It was fun actually to talk about these things and give you guys have a better insight as to why these requirements are being set. And yeah.

Ran Cohen: So many businesses we speak with every day. And so many profiles.

Daniella Ioannidou: Every merchant is different. And I think the one thing that I understand from my job is that there's no two merchants are like. There's even a little bit of a difference, it does impact.

Ran Cohen:  And it's so important that business's needs to understand why we ask all these questions. It's not because we want to know, it's because we need to, and it helps us profiling them.

Daniella Ioannidou: Helps us but also help them in understanding how we can actually help their needs and challenges as well.

Ran Cohen:  I hope we gave you some value in the into the event and if you have any questions, we'll be happy to answer later on in our channel as well. And we're going to post that event in our website on the Learn section and you will be able to view it again if you need and thank you, Matt. Thank you, Shy. Thank you, Alex. Thank you everyone that joined us. Thank you Daniella.

Daniella Ioannidou:  Thank you Ran.

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