High Risk, or Underserved ?

Certain industry sectors are often considered as high-risk in the payments sector but this is often due to the nature of the services they offer, rather than the actual payment risk. Typically the risk arises from the controversial or regulated nature of the service itself. As a result, we consider these sectors underserved.

Regulatory Complexity
Some sectors can be heavily regulated, with the level of regulation varying by jurisdiction. This creates significant difficulty for processing payments and money transfer. So many in the payment space simply avoid these sectors.

Potential for Criminal Activity
Some industries are perceived to be more likely linked to criminal activity such as money laundering, given the potential anonymity of online transactions. These assumptions aren’t always valid – in reality it’s easier to buy a smart TV with a stolen credit card that can be re-sold via a secondary market.

Reputation and Ethical Concerns
Many institutions providing financial services are cautious about associating their brand with sectors that may carry a social stigma or negative public perception. There may be ethical or reputational concerns, so that even though legal, these sectors can attract media scrutiny. As a result, many payment providers make decisions not to work with certain sectors.

Typically, the reluctance for providers in the payments related services to work with certain sectors is misplaced, resulting in a lack of providers which results in an inflated cost of services.

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