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What are Reserves, and How Do Payment Facilitators Use Them to Mitigate Risk?

Payment facilitators have a number of tools they can use to reduce their exposure to risk. To mitigate against credit risk, PFs will sometimes hold back funds from the submerchant – known as a reserve – to guard against possible future losses. When are reserves typically used, and is now – as many businesses are experiencing financial hardship because of the coronavirus – a time to implement them?

Beneficial Ownership: How Does It Affect Payment Facilitators’ Underwriting Process?

If payment facilitators were a fast food chain, the merchant experience might be their secret sauce – that special component that sets them apart from their competitors. The model is known for simplifying merchant applications and reducing unnecessary paperwork. There is a balance, however, between reducing friction and protecting the payments system from bad actors.

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Beneficial Ownership: How Does It Affect Payment Facilitators’ Underwriting Process?

If payment facilitators were a fast food chain, the merchant experience might be their secret sauce – that special component that sets them apart from their competitors. The model is known for simplifying merchant applications and reducing unnecessary paperwork. There is a balance, however, between reducing friction and protecting the payments system from bad actors.

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