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How do PSPs mitigate risk with adverse media and consumer reviews?

Regulators require Payments Service Providers (PSPs) to (periodically) monitor merchants. Moreover, PSPs want to stay in the know because they underwrite merchants and need a way to mitigate the risk of their merchant portfolio. With our Owlin for KYC offering, we help Payment Service Providers monitor their merchant portfolio for adverse media and detect leading signals that may cause concern. In this blog, we answer some of the most frequently asked questions about our offering.

What types of risks can I monitor with adverse media and reviews?

With adverse media and review data, Payment Service Providers can monitor the full risk scope of their merchant portfolio, including:

  • Merchant bankruptcy risk: a merchant cannot repay debts due to bankruptcy.
  • Excessive chargeback risk: the credit-card provider demands that the merchant covers the loss on a fraudulent or disputed transaction. 
  • Collusive/fraudulent risk: the merchant commits fraud using its customers’ (cardholder) accounts and personal information
  • Money Laundering/ Counter-Terrorism Financing: the merchant processes suspicious/ non-vetted transactions on behalf of another business.

What are the leading indicators when monitoring adverse media and reviews?

Usually, Payment Service Providers look for adverse media indicators such as financial distress, regulatory investigations, and layoffs and downsizing. When monitoring consumer reviews, Payment Service Providers usually look for indicators such as negative product reviews, order fulfillment delays, and disputed transactions.

Why do Payment Service Providers choose Owlin for adverse media monitoring?

Owlin offers PSPs world-class news monitoring in the form of timely, curated, and targeted news feed for companies and topics  (ex., regulation) of interest. Moreover, Owlin’s adverse media monitoring offering ensures Payment Service Providers of global coverage, support for translation from 16 languages, and the ability to add coverage for new geographies. 

This way, Owlin provides Payment Service providers with coverage of listed, non-listed, smaller entities. For Payment Service Providers the coverage of portfolios of small shops is a challenge due to the friction between the cost of (extra) compliance versus the revenue a small merchant will generate.

What when there is no news? 

When managing portfolios of small-sized companies, it’s often challenging to find material data required to assess credit risk surrounding these parties. There are no pricing datasets available and more often than not, there is a lack of news. 

In these cases, a common next step is to find out what consumers say on the internet about these small-sized companies, which can be challenging as there are multiple websites with consumer reviews to check for each company in the portfolio. 

Also, consumer reviews tend to have a low signal-to-noise ratio (eg: unhappy customers tend to use the word scam). Owlin’s approach to this problem is to first consolidate multiple sources that cover consumer reviews and extract and quantify only credit risk signals.

How does Owlin inform me about risks?

Whatever way suits your workflow best. Our Owlin for KYC offering allows PSPs to set up dashboards, API integrations, scheduled or instant email alerts, and instant desktop alerts.

Can approved onboarding cases be progressed to continuous monitoring?

Yes! Owlin for KYC automatically saves queries and alerts about relevant risk signals that form the base for continuous monitoring.

More about Owlin for KYC

Owlin for KYC offers financial organizations one single solution for onboarding and monitoring. Want to know how we can help Payment Service Providers mitigate risk? Feel free to schedule a meeting with one of our sales representatives. We are excited to get to know you!

Further reading 

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