What makes one PaaS provider more successful than the other? Here are some suggestions
As a response to the growing payment needs of global enterprises, Payment-as-a-Service (PaaS) providers have emerged in the last few years.
PaaS solutions address the issues of costly fees, disparate data sources, and paper-driven processes in modern financial systems. PaaS players operate cutting-edge cloud-based platforms to provide specialised services, such as card issuing, payments clearing, cross-border payments, disbursements, and e-commerce gateways.
A successful PaaS platform is cloud-based and updates automatically. It’s especially useful for companies with multiple subsidiaries and remote teams, allowing employees to process payments from anywhere. The cloud, thus, removes the hassle of having employees perform regular software maintenance, updates, and manage their individual PC’s security. PaaS providers can also configure automatic cloud management tooling updates for computer nodes hosting their platforms.
Cloud-based platforms speed up performance, so their own speed matters a lot. Therefore, PaaS services that efficiently use autoscaling, cloud monitoring, data caching services, etc to enhance their performance are also able to reach and maintain the maximum speed. The faster the platform, the higher volumes of transactions it can manage. On the customer side, transactions must take place in real time.
Cost-efficiency is one of the main factors for the success of any service. PaaS saves a lot of corporate money, eliminating the need to own the payments hardware and software, or staff specialist payments technology teams. Moreover, the pay-per-use model allows customer institutions to pay only for the processing services they need, freeing up additional financial resources. The more back-end processes are automated, the less paid manual work is needed.
Embedded fraud and risk management
Another way to save costs on the payment system is having fraud and risk management outsourced to the PaaS provider. This way, regulatory compliance is achieved quickly and without any fuss on the customer side. Embedded reporting and analytics provides deep and actionable insights into one’s payment operations and helps manage possible risks inherent for the financial industry.
Intelligent payment routing
It works with multiple payment service providers and uses the most relevant one for a single transaction. Along with the choice of a PSP, selecting additional parameters can be really helpful when routing payments in order to increase its payment performance. Thus, using intelligent payment routing strategies allows merchants to split their transactions to different merchant accounts, with the possibility to do cascading (dynamically decide the route). If the PaaS platform has intelligent payment routing options, it can be tailored to your business needs and payments scenarios.
Since PaaS is quite an innovation, customer institutions may have legacy systems integrated in their daily operations. Seamless integration with existing systems such as core banking, digital banking, fraud, and risk management is crucial. The last thing customers need is copying information from one system into another.
Financial data needs to be very well protected, especially in the virtual cloud which presents more hacking dangers than local internal databases. Thus, on one hand, a PaaS system must give you transparency on how your data is used. On the other hand, it should have easy-to-use privacy controls so that the data doesn’t get into the wrong hands. Advanced systems feature fraud alerts, encryption, virtual account numbers, independently audited security management, and compliance with the latest data security standards.