Balancing Cost, Security, and Usability in Payment and Banking Operations

Businesses are always seeking the best solution that balances cost, security, and technological innovations. This is crucial in payment and banking operations as well. Although this subject is less discussed, it is vital to strategize, plan for, and maintain a healthy cash flow. The operational efficiency around your payment and banking operations is the lifeline of your business, and paying attention to all aspects such as cost, security, compliance, technology, and other unique business needs is not only important but essential.

As a payment and banking consultant, I often see more negative examples than positive ones. Many businesses still do not understand that there is no such thing as a free lunch; these three factors—affordable, secure, and user-friendly—rarely coexist perfectly within a single payment provider or bank. Choosing the right payment and banking partner always involves making strategic compromises to match your specific business needs.

But how can we make the right decisions around what can be sacrificed?

If you prioritize a payment or banking channel that is easy to use, technologically innovative, easy to integrate, and secure, you'll likely pay for it dearly. Providers that offer seamless integration and robust security measures invest heavily in user experience and fraud prevention technologies. A good example is the well-known, ready-to-use payment processors, which are pre-integrated into multiple online platforms (Stripe, PayPal, etc.). These offers look very appealing at the beginning; however, as your business scales up, this decision translates into unnecessarily high transaction fees and service charges. Although the cost is justified by reduced integration time and enhanced protection against fraud at the beginning, it will impact your bottom line on the long term.

On the other hand, if you opt for a solution that is secure and cheap, be prepared for some user experience challenges. Providers that offer low transaction fees and strong security measures often do so by sacrificing customer service or technological sophistication. A good example of this is the hopeful and challenger applications, usually fintech startups, which can be a nightmare to integrate into your system, often have technical bugs, and typically provide limited or clueless customer service. Integration might be cumbersome, requiring significant technical expertise and resources. These systems can be less intuitive, leading to a steeper learning curve for your team. The initial savings on transaction fees might be offset by the costs associated with a prolonged and challenging implementation process, including potential disruptions to your operations, too.

Lastly, consider the scenario where a payment provider is both cheap and easy to use. While this combination might seem ideal, it often comes at the expense of security. Unfortunately, this is often seen with lesser-known or less regulated countries, such as offshore banks. These providers are usually regulated under looser financial licenses like money service businesses, wallet providers, brokerage, or exchange licenses. These licenses are significantly cheaper than tier-1 country licenses, and these low-cost, user-friendly solutions might be set up offshore to reduce costs further. These payment and banking partners may lack the rigorous security, AML, or data security protocols needed to protect your funds. Even though the financial provider itself might not do anything intentionally to harm your funds, they might onboard a customer who has fraudulent transactions, and if that comes to light, the regulator might hold the operation of the financial institution until thorough checks have been executed, which means that your funds might easily get stuck in this process. These loose setups could not only lead to frozen accounts but in worst-case scenarios, the provider might even disappear with your funds, since the setup is cheap and the provider has nothing to lose. The initial savings and convenience can quickly turn into significant financial and operational risks.

Understanding these dynamics is essential for making informed decisions about your payment and banking strategy. The goal is to achieve a balance that supports long-term stability and growth.

So, what can you do as a business to minimize risks and make the best decision possible?

Assess your priorities: Determine what is most critical for your business. Is it minimizing transaction costs, ensuring robust security, or having an easy-to-use system? Rank these priorities to guide your decision.

Evaluate providers carefully: Conduct thorough due diligence on potential providers. Look beyond the headline features and check their licences, company setups and owners.

Consider the trade-offs: Be realistic about what you might have to sacrifice. If security is non-negotiable, be prepared to invest more financially. If cost control is paramount, ensure you have the technical capability to handle a more complex integration.

Plan for the long term: Think about how your choice will impact your business not just today, but in the future. A solution that seems cost-effective now might incur higher costs later if it’s not scalable or secure.

Hire an expert: In the world of ever-changing technological and regulatory requirements, you will need a professional who can guide you. Planning ahead doesn’t cost much when done well, but it can save you significant costs and headaches. A payment and banking expert can help you set up the strategy and direct your attention to less obvious but very important issues because they approach payment and banking from all aspects, including compliance, technology, accounting, data security, and integration.

How can PSP Angels help

PSP Angels Group is an independent payment consulting firm.

We understand the payment market and have a huge network of different banks and financial providers, so we can give?our?clients an accurate picture of all the different payment and banking options.

We know the payments market’s ever-changing risk appetite and licensing requirements, as well as what fees are currently offered. We help?our?clients make informative decisions about the possible options, prices and risks.

Within?our personalized payment consulting services, we set up an overall payment plan, help to move funds between countries, reduce real banking and payment risks, re-negotiate current fees to match the lower market rates, optimize tax and cash flow, and assist with the overall payment/banking setup.

Helping?our?clients to take their business globally, we explain what country uses which types of payment options and we also refer them to local payment providers for safer and cheaper banking and financial products. We have several partners who offer payment solutions, alternative payment methods, mobile payments, wallets, open banking, vouchers, crypto payments, chargeback and fraud tools, cashiers, and correspondent banks, based on individual circumstances and needs.

Our Cyprus?branch offers?various?fiduciary, accounting, taxation and audit services, where we assist companies not only during their operation, but also from incorporation, including company setup, licensing (office and personal setups, executive and non-executive directors, AML officers, lawyers, software providers, correspondent banks etc.)

Our Malta?branch offers?banking and payment consulting, aimed specifically for the iGaming and Gambling industry.

Via?our new Greek?branch, we now offer in mergers and acquisitions of financial licensed companies such as brokerages, crypto exchanges, banks, E-money institutions, small payment institutions, money service businesses insurance, and remittance companies, etc. globally

We also specialize in payment and financial evaluations on different projects to assist.

In both 2023 and in 2024 PSP Angels won the Payment Consultants of the Year award by Acquisition International Magazine https://www.acquisition-international.com/winners/psp-angels-2/ and https://www.acquisition-international.com/winners/psp-angels-3/ . The company has also won the Most Insightful Payment Consultancy Firm 2023 award by Corporate Vision Magazine https://www.corporatevision-news.com/winners/psp-angels-2/ and the Best Blockchain Services of the Year 2023 by Crypto Expo Europe.

PSP Angels was at the TOP 10 startups from Cyprus by the Industry Outreach Magazine.