Owlin’s solution helps Payment Solution Providers monitor their merchant portfolios, and detect early warning signals as a means to assess potential risks before they cause financial damage.
In these dynamic times for the Payment Services industry, Owlin can be a very important piece of tooling. The tooling analyses news from a great number of diverse sources, and covers a variety of languages to flag emerging risks if needed.
With a number of players strongly positioned in the market, and having consolidated relationships with big merchants, new players in the payments services industry have to find innovative and disruptive ways to attract their targets, dividing the merchant market into three main categories.
The first group are merchants considered as low-risk, which typically belong to relatively safe industries, are located in regulated countries and are profitable. These merchants tend to work with multiple Payment Solution Providers, and typically have the upper hand when it comes to negotiating on e.g. commission rates. The other group are merchants considered as high-risk, which belong to more risky industries and have lower levels of profitability. They often allow higher revenues for Payment Service Providers, involve less parties, and thus possess less negotiating power.
A wide range of merchants can also be considered hybrid, meaning that they are risky but they still work with multiple providers and allow for huge revenues because of superior scale. Airlines are a good example of that - many parties would like to work with Airlines, but almost all of them are financially weak.
Reading the word combination high-risk, one would think of merchants active mainly in the fields of Gambling, Gaming or Online Trading. This list, however, as mentioned often extends towards fields like Travel, Software, or Digital Goods. Nevertheless, information within each of these sectors is absolutely crucial in both, vendor onboarding, as well as vendor monitoring processes, as potential troubles can result in financial losses on the side of Payment Service Providers.
“A major focus point for a payment party is the outstanding risk on their merchants”
A major focus point for a payment party is the outstanding risk on their merchants, but often due to the size of their merchant portfolio, responding timely enough becomes also challenging. Next to this, events like fraud, money laundering, bankruptcy or mistreating employees can have a significant impact. Where action is taken after the actual event due to decreasing margins on sales for instance, the payment parties need to be better equipped in handling emerging risk cases.
Last but unfortunately not least, the COVID-19 outbreak has had a major impact on PSPs’ revenues. Vendors strongly focussed on verticals as Travel, Hospitality and Transportation suffered major losses, and have been struggling to see a silver lining.
The virtual shutdown of major global industries, the postponement or cancellation of major events, and localized “shelter-in-place policies” will adversely affect transaction activity and volume in the near term.Payments companies with diverse industry and geographic exposure will be best positioned. Again, diversification, flexibility and a nimble approach is what C-level payments executives need in order to rock the boat in these choppy waters.
Within its product offering, Owlin found its sweet spot among clients in the payments industry, helping market leaders like Adyen, Ingenico, or Wirecard. Through closely working with these clients, we adjusted a number of crucial product components in order to help with a number of Key Performance Indicators of Payment Service Providers such as:
The above graphic is a good example of Owlin’s capabilities. It shows Early Warning Signals eventually leading to the British airline Flybe bankruptcy, in February 2020. Owlin flags and warns risk events affecting companies such as Flybe, by using complex distance-based risk taxonomies looking into potential catalysts related to news about the entity in question.
Owlin offers a 360º degree view platform, which helps Payment Service Providers onboard, and monitor large portfolios of counterparties in a pro-active, continuous, and near real-time manner. To do this, Owlin taps into more than 3 Million online news sources in 12 languages and uses NLP (Natural Language Processing) and AI to automatically retrieve sentiment related insights.