Protecting the Enterprise

If you’re an acquirer, understanding your merchant base is critical to successfully managing your merchant relationships, and ultimately to managing your own business.  Setting business terms for each merchant based on their inherent risk and actual experience allows you to make sure that you are adequately compensated for the risks associated with each merchant without penalizing merchants that represent lower risk levels.

Our modeling experts can help you develop a variety of models and methods for analyzing and understanding your merchants.  These include:

New merchant risk models that asses the risks inherent in a new merchant relationship based on verifiable characteristics such as merchant category code, average ticket size, products sold, services offered, authorization behavior, chargeback volumes, sales volume, billing method, and order placement channels.

Merchant Behavior Monitoring models that enable you to analyze the authorization, transaction, deposit, and chargeback histories for each of your merchants, and pro-actively identify merchants whose behavior is suspicious and warrants review analysis and potentially investigation.

Merchant Pricing and Profitability models that assess the impact of changes to fees and discount rates on your overall merchant population and revenue prospects.  We can help you analyze the impact of changes to discount rates, interchange fees, association fees, access fees, brand usage fees, and acquirer processing fees on merchant attrition and retention, as well as identify fee structures that allow you to optimize revenues while keeping merchant risk under control.

What we’ll do for you:

• Analyze your current business situation and merchant portfolio.
• Identify specific models that offer you the greatest return on your investment.
• Help you identify, create and choose the decision variables that have the greatest predictive power.
• Identify the modeling approach that offers you the best tradeoff between sensitivity and robustness.
• Review, upgrade, and enhance your current models and develop the new models you need.
• Assist with implementation strategies architectural integration, performance monitoring, and model governance.

You’ll be interested in this service if:

• You’d like to better understand the composition of and risks inherent in your merchant portfolio.
• You think you may not be charging enough for the risks posed by some merchants.
• You want to retain your best merchants by offering them favorable business terms.
• You want to proactively manage your merchant portfolio.

The key benefits you’ll gain from this service:

• A deeper understanding of the profit and risk potential of each merchant in your portfolio
• Increased retention and profit maximization from your best merchants.
• Targeted policies on pricing, fees, reserves, and deposit holds that improve your profitability as well as your risk management.
• Improved business results from a fee structure that matches costs to risks.