A new white paper from RS2 argues that merchant acquiring is at an inflection point where artificial intelligence emerges as a practical tool to address its structural inefficiencies and redefine how the sector operates.
Frankfurt-based RS2 payment processing infrastructure provider, published a white paper titled AI in Merchant Acquiring: From Fraud Mitigation to Revenue Generation. The title is the thesis: the company believes acquirers have spent years using AI defensively, e.g. catching fraudsters, blocking bad transactions, while leaving substantial commercial value sitting untouched in their data.
The timing isn’t accidental. Payments is a business that tends to attract attention when the numbers are large enough, and McKinsey’s estimate that the industry generated $2.5 trillion in global revenue, with the figure expected to reach $3 trillion by 2029, is hard to ignore. With that much money flowing through the system, even marginal efficiency gains at the infrastructure layer translate into meaningful sums.
RS2’s core argument is straightforward: every declined transaction is, in some sense, a missed opportunity. Historically, acquirers have treated declines primarily as a risk management outcome — a transaction that shouldn’t have gone through, blocked appropriately. The emerging view, which RS2 is pushing with some enthusiasm, is that a significant proportion of declines are actually errors: good transactions rejected by blunt instruments, representing lost revenue for merchants and, by extension, lower volumes for the acquirers that serve them.
The remedy, per the white paper, is a suite of AI capabilities like advanced risk scoring, intelligent transaction routing, predictive analytics, etc., that allow acquirers to approve more of the right transactions in real time while still managing exposure. The report also highlights dynamic pricing models, merchant churn prediction and personalised value-added services as areas where machine learning can shift acquiring from a commodity service into something closer to a strategic partnership.
“In payments, every decline is effectively a decision about revenue,” said Radi El Haj, CEO of RS2. “Historically, artificial intelligence technology in acquiring focused primarily on protecting transactions and reducing fraud. Today, AI is enabling acquirers to create value by improving approval performance, optimising pricing strategies and helping merchants grow their businesses.”
The white paper introduces what it calls an “AI control tower” for acquiring — a unified intelligence layer that connects risk management, routing, pricing and analytics across a single architecture. Whether that phrase will stick in industry vocabulary or quietly fade into the pile of vendor neologisms remains to be seen, but the underlying concept is coherent: bring issuing, acquiring and data intelligence onto one platform, and the view of transaction flows becomes considerably cleaner.
The commercial context RS2 is navigating is real enough. Merchants have become more sophisticated buyers of payment services, increasingly running multi-acquirer strategies to optimise authorisation rates and build resilience. That shift has put pressure on acquirers to differentiate on something other than price, which is precisely the gap RS2 is positioning its platform to fill.
What the white paper doesn’t linger on is the competitive landscape. RS2 is not alone in making this argument. Practically every major payments infrastructure provider has staked a version of the same claim, that AI transforms their offering from pipes into intelligence. The questions acquirers will be asking aren’t whether AI can or should do these things. It’s which vendor’s version of the tech stack implementation actually delivers operational value, and at what cost.
The full white paper is available from RS2.
