How to choose an e-money programme manager?
You’ve read our previous article about the benefits for your company of having its own e-money programme, and now you want to get one. You know it’s complex and don’t know where to start, so the best option is probably to leave it to a specialist and look for a programme manager; but how do you choose one?
In the next few paragraphs we provide a few pointers on what to look for.
Choosing a business-critical supplier is always hard. You’re likely going to receive a number of promises, but will they deliver? You’ll receive great service during the sales process, but will that continue after you’ve signed on the dotted line?
The first thing that struck me, when I first looked for a provider, was the pricing complexity. There are literally dozens of different fees. It is difficult to understand what you are paying, for what, and to whom as a lot of fees are passed through to underlying providers.
Take the time to get all those fees explained to you, understand in what circumstances they apply, and don’t make any assumptions as this could end up costing you more than you think.
When discussing fees, you need to understand which fees – or portion of fees - are kept by your provider to run its service and which ones are passed on to underlying suppliers. You want to know where your provider gets its own revenues as this will give you an indication on how they will see and value your project.
Getting a clear picture of the programme manager’s own fees will allow you to get an idea of the level of support they will be able to provide. And of course, it will also help you to know where you can negotiate a better price.
Fraud is an obvious risk when working in the payment industry, and you’re likely going to need help from your provider in mitigating that risk, and also in resolving fraud cases. It is in your interest to understand early who is responsible for what and what level of support you will get if a problem arises.
It is common to be asked for prefund before going live, and sometimes for an invoice reserve. Raise those subjects early and understand how those are going to be set to avoid any nasty last-minute surprises.
As you start, you might not have enough volume to command good pricing, so make sure a genuine and fair review is included in the contract, maybe every 12 months or whenever you think your business will need it. Try to agree what criteria you need to meet to allow for a price reduction, and what that reduction might be. Discuss what your options will be if you cannot agree on a fair price with your provider at that point.
Technology is a key component of any payment provider’s service.
Will their platform scale with your volumes – and that from other customers? What new features are planned on the platform’s development roadmap? Is your provider going to add new functionality and allow you to expand your own offering as time passes?
If you need it, will you be able to get new development done as your business grows? How will you be able to influence their development plans and would any of those changes be chargeable to you?
Ask about their feature roadmap, their performance testing plans, their approach to development and to the development of new features for their customers. Try to understand the trajectory of travel for their technology and make sure it aligns with your own plans.
In this environment, operational support is probably even more critical, than technology support.
How much operational support is your provider ready to give you? Can they provide training in key areas? Will they keep you informed of regulatory changes? Will they help you comply with those?
Have you discussed what happens if you can’t go live (yes, it does happen)? As with many regulated areas, approval can’t be taken for granted. How will your provider help in those situations? Will they abandon the project, or do they have alternatives? What will happen to any fees already paid?
I am often surprised to see how little attention new programmes give to operational flexibility. To me this is the most crucial part of any business-critical supplier: if I need to evolve my business, how will those providers respond?
As you start any new initiative - payments or others - you have a clear plan; but things rarely go to plan. You’ll need to be able to navigate changes in direction without being completely locked by your underlying contract with your provider. You’ll need a provider flexible enough – both with its technology and its operational model – to be able to adjust to those changes.
Will the underlying contract and technology allow you to evolve your business? How about changes of directions? How about complete pivots?
It might be difficult for the provider to give you a concrete answer on those, but can they at least commit to best endeavours? Can they explain what their approach would be if you entered such discussions.
I love customer referrals; they are a great measure of who a provider is and it is probably to easiest way to see (1) whether they value customer service and (2) what they can actually deliver for you.
At Lerex, we are proud that 94% of our customers would be happy to refer us to other clients.
As mentioned previously, knowing exactly what you’re stepping into is always a challenge. For that reason, I sometimes go with my instincts, but make sure to have a way to quickly exit a relationship if the promised service isn’t delivered.
With payment services, you will usually go through a few weeks of set-up and onboarding. This can give you great measure for who your provider is. Having a get-out clause during that period will help you move before you are locked into the wrong relationship.
Launching an e-money programme can be expensive, and moving provider is difficult. So make sure you’re making the right decision.
Whether you decide to engage Lerex or not, our team will always be available to answer any question you might have so feel free to contact us for advice.