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CoverStory

Friendly fraud is a huge issue, and merchants need to ences and behaviors, allowing us to tailor our services
take fraud seriously by checking shipping addresses for accordingly and maintain a competitive edge. Big data is
large orders or orders that seem too big. Shipping to UPS no longer only for the big companies, and entrepreneur-
stores and other places will usually result in a charge- ial ISOs and salespeople must provide an enhanced user
back. experience to each merchant to create that long-lasting
relationship, which doesn't only reflect how many basis
3. We have partners who have added AI to cut down on points above interchange you're charging.
customer service calls, so when a merchant goes into
the portal, they can ask a question. Instead of searching 2. Combating fraud requires a proactive and multi-
through all the FAQs, AI gives them several answers, layered approach involving collaboration with data se-
cutting down on the merchant looking and phone calls curity partners and leveraging advanced technologies.
to support, as the merchant can find the answer quickly. As a retail ISO not assuming liability on transactions,
we work closely with our acquiring bank/processor to
4. Faster payments = faster fraud. Many of these new implement robust fraud detection and prevention mea-
ways to fund merchants need to be looked at. Take next- sures. This includes real-time transaction monitoring,
day and same-day funding for merchants: if a merchant machine learning algorithms, and behavioral analytics
has a healthy business and does not need these services, to identify suspicious activities and mitigate risks.
they can wait 24 hours to get paid. I have seen compa-
nies offering these services and then charging hefty fees During our monthly calls, we continuously ask about
of up to 1 percent. new functionality and feature sets regarding fraud. Ad-
ditionally, we educate our merchants with quarterly we-
The business is changing at a rapid pace and payfac-style binars about best practices for secure transactions and
boarding and software companies adding payments are provide tools and resources (even if third-party compa-
growing at a rapid pace. nies) to enhance their awareness and vigilance against
fraud.
Jeff Shavitz
ToolBox Payment 3. AI is an area that I and our team must become much
smarter about; of course, I use the term at a cocktail par-
Having spent 25 years in the payments industry, of course, ty to sound smart, but I really do not understand the
a lot has changed but candidly as I see it from my perspec- enormous implications on how AI will transform our
tive, still much has NOT changed. Merchants still want a industry. As I speak to friends in our plus other indus-
good solution at a fair price from a reputable ISO salesper- tries, I do appreciate that AI enables us to analyze large
son. With that quick preamble, here are my direct answers volumes of data more efficiently, identify patterns and
to the GS's questions. trends, and extract actionable insights to optimize deci-
sion-making and improve operational efficiency. AI will
1. To remain relevant to today's merchants and consum- help our merchants better understand customer prefer-
ers, especially younger generations, a payments enter- ences, personalize marketing campaigns and optimize
prise must prioritize offering a variety of payment op- pricing strategies.
tions that cater to different preferences and lifestyles.
This includes embracing newer payment methods such 4. The implementation of faster payments presents both
as buy now, pay later (BNPL), QR codes, paying with opportunities and challenges for the industry. While
points, and other emerging technologies. faster payments offer greater convenience and efficiency
for consumers and businesses alike, they also introduce
While launching my new ISO, we have adapted by ex- heightened security and regulatory considerations. Key
panding our payment solutions to include these options, challenges include addressing concerns around data
ensuring that our merchants can offer the flexibility that privacy, protection and managing the increased com-
modern consumers demand. We've also focused on en- plexity of transaction processing in real-time.
hancing the user experience across various channels,
including mobile apps and online platforms, to meet the While the transition to faster payments may take time, it
expectations of tech-savvy consumers and consumers in is indeed a growing trend, driven by consumer demand
general. for instant gratification and seamless experiences. As
faster payments become the norm, they will revolution-
As I write this, I think about airline travelers who get ize the way businesses operate, enabling quicker settle-
upset when they don't have Wi-Fi on the plane, as just a ment of transactions, improving cash flow management,
few years ago, you would be offline for the duration of and fostering innovation in products and services.
the flight. Now, we as a society are so used to fast/fast/
fast for quick transactions. We wish to thank those who took time out from their busy
schedules to offer their insights for this series. Look for ad-
Additionally, we are investing in customer analytics and ditional perspectives in our April 22, 2024 issue.
market research to better understand evolving prefer-
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