Technology in the payment processing area of the telecoms market has evolved so that partners can now offer MVNOs new innovations and opportunities for business growth.
According to Todd Curry, CEO of Vesta, MVNOs should currently be taking a fresh perspective on their payments and fraud management solutions, redefining what the minimum requirements are for their partners.
With the right choice of payment processing partner, MVNOs have the chance to mitigate fraud risks, reduce chargeback costs, boost sales conversions, and even improve their customer experience.
How some payment processing partners are catering to MVNOs specifically
Vesta has been operating for around 30 years, but has mostly served MNOs with fraud protection and payment processing, until recently.
However, when Todd joined Vesta in 2023, he recognised an opportunity for payment partners to create more value for MVNOs through technological advancements and added value solutions.
A key reason for this shift is because Todd recognised much of payment fraud tends to be focused on MVNOs, rather than MNOs. That fraud protection should therefore be an area of focus for all MVNOs, and of course for your payment processing partners.
Todd believes that all payment partners should be able to reduce fraud, drive costs down, and improve acceptance rates for MVNOs.
An example raised by Todd in his session at the MVNO Nation USA event was:
“If an MVNO has 100,000 subscribers, payment processing partners should be able to save you $100,000 a year on your processing. If it’s 200,000 subscribers, $200,000 a year, and so on.”
It’s a bold claim, but one Todd went on to explain as completely true in the case of Vesta.
He added, “We believe that the default choices that a lot of MVNOs make when starting out become higher cost partners than they really should have.”
A new relationship between MVNOs and your payment partners
Todd went on to explain how modern payment partners like Vesta are working with MVNOs to deliver even more advantages than cost reductions.
In the grand scheme of things, payment processing is rarely given as much thought or attention by MVNOs when compared with brand building, network costs, and so on.
However, taking more care in the selection of your payment partners, and the benefits they can deliver to the business, has become a way for MVNOs to gain a new competitive edge.
Todd said, “Often we hear MVNOs say their tech team picked the payment solution because they had a great API and it was super easy to integrate with them.”
Easy integration is one of the metrics that you should think about when selecting a payment processing partner, but Todd argued that should simply be “table stakes” for all solutions. Making the selection of a partner based on that alone is overlooking opportunities for more advantages.
Todd listed several key points of criteria to look out for these days:
- Easy integration
- Clear rates
- Fraud detection
- Payment processing
- Simple billing and reconciliation.
A final feature of payment solutions Todd raised, which very few partners today provide, is an arrangement where rates begin dropping as volume grows for MVNOs.
Todd said, “As MVNOs working with some of these payment partners, your rates don’t drop as your volume grows, but why not? You’re a more stable company. If you’ve got a strong processor working with you, why wouldn’t they drop your rates as you grow?”
The purpose of this model is to help MVNOs save more, which can then be reinvested back into growing the business and building the brand.
“We understand fully that every dollar we save you here allows you to plough it back into customer acquisition,” said Todd. “So we believe that by doing our job, we’re helping you to grow.”
With that in mind, Todd also noted a key misconception among MVNOs, which is that switching payment processors is something they should never consider.
Todd debunked that myth, as he told the audience, “It’s okay to switch payment processors.”
Fraud prevention and other points of added value
Other differences between traditional payment partner offerings and new, more innovative approaches include fraud detection.
“With fraud detection, most MVNOs pay for mistakes, and that’s shocking,” said Todd. “Payment processing partners should pay for their own mistakes.”
“If we make a mistake in saying that a transaction is good when it’s actually fraudulent, we eat the cost. We’ve had a model for 30 years, which is the world’s fastest decision engine. It makes a decision in under one millisecond, and we’ll stand behind it 100% so you don’t eat those charge-back costs associated with our mistakes.”
And, of course, as your MVNO business grows, these challenges and risks will increase. Your payment partner should be able to grow with you, providing intelligent tools and tailored support to develop your fraud protection, revenue orchestration, and payments operations at scale.
MVNOs could also benefit from thinking outside the box to gain more ROI on their payment solutions by working with multiple processors. By choosing a partner who works with more than one, that partner can provide you with optimisation and selection based on highest authorisation rates, which results in more revenue for the MVNO business.
Key take-aways and guidance for MVNOs
As an MVNO, you should be looking for modern payment processing solution providers in a more dynamic partnership, who can:
- Integrate easily
- Mitigate risks
- Prevent fraud
- Reduce rates based on volume
- Convert as many payments as possible, even with scenarios like insufficient funds
- Use intelligent analytics, especially on the fraud side.
Todd said, “We see so much fraud in other places before it lands on your website. We do money transfer fraud protection, for example. Fraudsters usually start with the money transfer sites, so we see fraudsters circling there. We see the blooms and the patterns, and we then know who to protect against across our entire network. This allows us to turn them away, and do so at scale.”
