💼 2/3 The Wave of Scams in P2P Payouts Is Not News — It Is a Systemic Market Risk

💼 2/3 The Wave of Scams in P2P Payouts Is Not News — It Is a Systemic Market Risk

What should PSPs do?

There are two key areas to consider: how you deal with merchants and how you deal with account operators.

What to do with merchants

To begin with: yes, you may choose not to reimburse merchants. But remember that your business is built around ensuring that the money actually reaches their customers. Every partner will remember how you treated them when something went wrong and assess whether your explanations were reasonable.

If you want to retain good partners for the long term, simply accept that you will occasionally have to take a loss. That is part of doing business.

You were already operating at a loss when you first launched your endeavor, developed the technical infrastructure and hired employees before receiving any traffic. That is not the real danger. The real danger is losing clients or failing to acquire them in the first place. Make sure you maintain a financial reserve so that you are not caught unprepared in front of your merchants.

Washing your hands of responsibility may not destroy your business, but people will remember it. PSPs that stand behind their obligations to merchants, regardless of the circumstances, tend to earn several times more over the long term.

And before we move on to account operators: do not offer merchants solutions where you know there is an elevated risk of being scammed.

What to do with account operators

Continuing the same point: do not rush to offer payout services. Even if merchants are pushing you to do so. Even if an operator performs well on pay-ins. If you cannot afford the risk of losing some of the funds, it is better to stay away from payouts altogether.

There are two separate areas that ideally need to be developed independently: operator selection and a reliable technical solution.

Operator selection is an entire subject in itself. You will not be able to distinguish a reliable trader from an unreliable one quickly or entirely online.
When trust has not yet been established, first observe how the person handles pay-ins: how well they operate and how deeply they understand the business. If they work consistently, demonstrate genuine expertise and have been cooperating with you for a long time, they are less likely to scam you.

Nevertheless, in an ideal scenario, considerable weight should still be given to personal proximity, aka "intimacy". This includes your assessment of the person’s character (sincerity, reliability, intelligence and so on) as well as more practical considerations: you know where they live, where they work, whether you know their friends or relatives, and what actual leverage you have if something goes wrong.

There is not much we can add regarding the technical side. Fake-receipt makers are constantly competing with receipt-verification systems. In many cases, all you can do is rely on the end customer to report quickly that the money never arrived. Although that raises a separate question: how honest can a casino player be when dealing with the casino itself?

Next week, we will look more closely at the position of account operators who struggle to gain trust because of the overall situation in the market.

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