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Aug 18, 2021 | Risk Management

Setting up a global payments network to break into the world of Open Banking?

8 Questions to ask yourself before you partner up with a payments partner.

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Open banking has unleashed huge opportunities for smaller and medium-sized financial institutions. For those that take up the challenge, it can be daunting. Setting up a secure, safe, and reliable global payments network can seem like a colossal undertaking. The smart way to success lies in partnering up with an established payments expert.

International payments can be complex, and every Financial Institution will have different requirements, so a tailored approach is important. When choosing a payments partner, what questions should a Financial Institution be asking to make sure all their needs are met?

1. Is your partner compliant?

There is a large amount of regulation around payments, and quite rightly so. Not only does this protect all parties from fraud, but it keeps the marketplace competitive and allows new players to enter.

When expediting global payments, you need to obey the rules and regulations - not just in your own country, but also those of your payment destination and potentially other jurisdictions. Requirements in PSD2, and newer rules such as those related to Strong Consumer Authentication (SCA) which were introduced in September 2019, hold Financial Institutions of all sizes accountable to the highest levels of compliance.

Any default could mean delays and hefty financial penalties, as well as the loss of reputation, brand image and customers. So, when choosing a payments partner, ensure they have a good working knowledge of global regulations.

2. Is your partner innovative?

Technology will be key to your success. Your system will provide your customer interface, connect to third-party data, process transactions, and create reports. But above all, it needs to be secure.

Cybercrime and digital crime continue to increase. Ask if your chosen partner platform supports multiple authentication methods. Look for username and password authentication with customisable attributes, such as lockout timing, password expiry days, and minimum number of passwords required before allowing repeated passwords. SCA regulations state that, to further enhance security, systems must add secondary authentication through One-Time Passcodes delivered via messages such as Email, SMS, or Soft Token.

Of course, as security increases, cyber criminals continue to find ways to get around it. As such, your payments partner needs to have a record of innovation. Technology must continue to evolve to keep up with the in the fast-moving financial world.

3. Is your partner global and multilingual?

As you expand globally, you want to deliver a user experience that transcends cultural and language barriers. Your partner platform should support the languages of your target markets, and it should have the capacity to add more in the future. You should be able to offer customer support in local languages, so make sure your partner has a global reach and infrastructure that will help you serve your customers.

4. Do you have a bird’s-eye view of your payments network?

From pricing to control over the order process, you need to be able to see what’s happening in real time. Your partner solution should connect to your banking platform, allowing you to check for sufficient funds and debit accounts, but also validate banks and beneficiaries and submit payments online quickly and efficiently.

The ability to make bulk payments is crucial as it enables you to speed up processing time for large batches and enable you to scale up to larger volumes when needed. Alongside the management of outbound transactions, a good white label or API solution should allow you to efficiently receive incoming payments.

5. Does your partner have the currencies you need?

When selecting a partner, check that they support all the currencies you require. Ask if clients can receive local currency with competitive conversion rates and if foreign payers can benefit by settling in their local currency via a local banking network.

6. Does your partner offer sanctions checking?

Another important feature to bear in mind is sanctions. Ask if your partner offers real-time sanctions checking. What kind of lists can they check? Do they offer customisable compliance profiles to fine-tune scanned lists, whitelists, and blacklists? Would you be able to apply your own approval models to follow internal guidelines?

7. Is your partner dedicated to service?

No matter what technology underpins your offering, there is always a need for the human touch, and it is crucial to provide the right level of dedicated customer service.

Support should include dedicated data privacy teams to help you ensure compliance when handling customer data, and internal functions for fraud prevention and payment security. Qualified partner personnel can help you find efficiencies, reduce costs, and develop new ideas. They should be on hand if you need an urgent response.

8. Does your partner have a business continuity plan?

As we all know all too well, it is important to prepare for the unexpected, whether that’s a pandemic, a natural disaster, a phishing attack, or ransomware. Business continuity planning is essential: ensure that your provider maintains, reviews, and periodically updates their business continuity programme so they can keep delivering for you under unforeseeable circumstances.

A partner you can trust

Open Banking and PSD2 are expanding the global marketplace, and it is through partnerships within the sector that many Financial Institutions will be able to enter the international payments market. At Western Union Business Solutions, we believe we meet all eight criteria for a payments partner you can rely on.

By collaborating with us, Financial Institutions can offer a cost-effective, fast and secure way for their customers to move money around the world without incurring the time or expense of building and maintaining a global payments network inhouse.

By leveraging our global reach and online solutions, the costs of establishing multiple currency accounts, the associated maintenance fees, and the operational burdens of transacting across the world, can be reduced significantly. We will help you break into the market and gain a competitive edge.

Western Union Business Solutions

At Western Union Business Solutions, we are trusted by more than 60,000 organisations to move money around the world. We have an extensive global network, spanning 200 territories and 130 currencies, and an in-depth knowledge of local markets and compliance.

If you are looking for world-class cross-border payments services, please contact our team at UK-Payments@westernunion.com. We’ll be more than happy to talk about how we can help you manage your international transactions.

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