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A Case Study of the Unexpected Reality of Single-PSP Reliance
On January 2nd, Marika Beindorff, COO of Talk360, opened her inbox for the first time of the new year, only to find an unexpected email.
"Happy New Year! Due to a global business decision, we have unfortunately decided to close our business in Kenya. Therefore, we regret to inform you that we will be terminating our Services with you 30 days from the date of the attached notice."
This chilling message wasn't from a disgruntled customer, it was from their primary Payment Service Provider (PSP), PayU.
PayU announced they would be ceasing operations in Kenya citing a global business decision. While legally within their rights, the abrupt termination left Talk360 facing the critical challenge of how to ensure uninterrupted service for their growing Kenyan user base. This was particularly concerning given their significant growth in Kenya in 2024—a 400% increase—achieved by transitioning from Flutterwave directly to NjiaPay in July.
This incident starkly illustrates the common yet often overlooked risk for businesses of over-reliance on a single PSP. For many merchants, especially those operating in emerging markets, the consequences of such a disruption can be severe:
- Operational disruption - Scrambling to find a replacement PSP and retraining entire teams on new systems and procedures is a lot of work. This consumes valuable time and resources diverting attention from core business activities and potentially impacting customer experience.
- Developer roadblocks - Integrating a new PSP requires significant developer time and effort. This disrupts development timelines for new features and increases the risk of unforeseen technical issues.
- Financial uncertainty - The transition to a new PSP often involves renegotiating contracts, potentially leading to increased processing fees or unfavourable terms. This significantly impacts profitability, especially for businesses operating on tight margins.
- Reputational damage - Service interruptions and payment failures directly impact customer satisfaction. Inability to process domestic payment methods can severely damage a company's reputation and erode customer trust.
Beyond the technical and operational hurdles, legal and regulatory challenges add another layer of complexity, further highlighting the scale of effort that is needed to enable seamless payments across the continent.
This scenario is not unique to Talk360
Just a few weeks ago, a prominent company shared on LinkedIn that they were experiencing a significant outage due to their primary payment processor, Stripe, being unavailable for over 30 hours. While less frequent in mature markets like Europe and the US, such incidents highlight the inherent risk of single-PSP dependence.
A Multi-PSP Strategy for Mitigating the Risk
The key to mitigating this risk lies in a multi-PSP strategy. This means diversifying your payment processing infrastructure by partnering with multiple providers. This redundancy ensures business continuity in case of unforeseen circumstances like service disruptions or even the exit of a specific PSP from the market.
While implementing a multi-PSP strategy may seem complex, the benefits significantly outweigh the initial investment:
Enhanced resilience - Businesses minimize the impact of unexpected events by working with multiple PSPs ensuring uninterrupted service for their customers.
Improved performance - Businesses optimize processing speeds and reduce overall costs when routing transactions through the most efficient and cost-effective PSP for each specific transaction.
Access to diverse payment methods - Partnering with multiple PSPs provides access to a wider range of payment methods enabling businesses to cater to the diverse needs of their customer base.
Implementing a multi-PSP strategy is challenging for many businesses, particularly smaller companies with limited resources.
This is where NjiaPay plays a crucial role.
Businesses gain access to a robust and diversified payment network when they integrate with NjiaPay. We act as a single point of integration connecting merchants to multiple PSPs and intelligently routing transactions to the most optimal provider based on factors such as transaction type, location and real-time performance data.
This eliminates the need for businesses to manage multiple integrations and navigate the complexities of working with multiple providers. NjiaPay simplifies the entire process allowing businesses to focus on their core operations while ensuring seamless and reliable payment processing.
Businesses mitigate the risks associated with single-PSP reliance and unlock significant opportunities for growth and efficiency by embracing a multi-PSP approach and leveraging the power of NjiaPay.
We offer an initial free one-hour consultation where we conduct a thorough assessment of a merchant's existing payment infrastructure, identifying potential vulnerabilities and recommending a customized solution to optimize their payment processing strategy.
Disclaimer: This text is for informational purposes only and should not be considered financial or legal advice.
I hope this expanded version effectively conveys the importance of a multi-PSP strategy and highlights the value proposition of NjiaPay.
