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What makes the perfect payment partner?

Banking Circle insight report reveals the pain points PSPs need to overcome to retain merchant loyalty

London, 6th February 2023 – A new insight report – The perfect payment partner? What merchants are looking for from their PSPs – from Banking Circle, the next generation technology-led Payments Bank, suggests that the services currently offered by Payment Service Providers aren’t going far enough to support the shift to e-commerce. The report, based on a survey of 900 merchants in the UK, Germany and Holland plus in-depth interviews with five C-suite officers from leading European and International PSPs, reveals that merchants are switching providers frequently to manage risk, access specialist services and get better pricing.

Livia Benisty, Chief Business Officer, Banking Circle, commented: “The rapid development of e-commerce that we have witnessed in the past few years has been exciting and inspirational. Digitalisation has removed many of the barriers to financial services for individuals and businesses around the world. However, the cost and speed of cross-border payments still bring challenges for many banks and PSPs which hold them back from meeting the evolving needs of their merchant customers.”

Banking Circle’s latest insight report provides a snapshot of how merchants interact with PSPs today and what PSPs and banks could be doing to serve them better. The research found that Europe’s SME merchants are most concerned about risk and transaction security when it comes to their PSP relationships.  One in three (33%) cited these as major pain points in working with PSPs. Other frequently mentioned difficulties include access to support services, mentioned by 31% of all merchants as a major pain point, and transaction settlement times, cited by 29.5% of merchants.

To enable smooth online purchases, 62% of merchants work with two or three PSPs, and two in three switch PSP once every two to three years. A quarter change provider every year. And the root causes of the use of multiple providers – despite the additional cost and management burden – appear to be centred around the need to work across borders.


But multi-country and currency capabilities aren’t the only important factors for merchants in choosing their PSP partners.  Underlining the significance of the ‘always on’ customer expectation at the heart of e-commerce, 31% of merchants said that having access to 24/7 technical support was the most important criteria.  Ability to handle multiple currencies and speed of settlement came close second at 27% each.



Adding value is also critical in the merchant-PSP relationship. A third of merchants surveyed said that marketing support was a popular service provided by PSPs. The capacity to handle direct debit payments from consumer accounts and discounts on POS devices were also additional services valued by merchants at 31% each.

“Customer expectations and the needs of merchants are clearly evolving and escalating as rapidly as the revolution in digitalisation is taking place,” added Livia Benisty. “No bank or FinTech can solve all the cross-border payment challenges alone, so it is time to come together within the financial ecosystem to offer customers access to the most relevant, familiar and convenient payment solutions to meet their needs.

“By collaborating with non-competing platforms, innovations can be delivered that create customer value and enhance competitive edge. And we look forward to working together to overcome today’s blockers to realise the promise of digitalisation, delivering a fairer and more inclusive economic future for all.”

Download the full report here.

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