Risk culture in card payment acceptance: a case study

Abstract

There are not many published academic articles on risk culture in the financial services. This academic study seems to be the first to focus on risk culture in the unexplored area of the card payment acceptance industry. Financial sector risk management requires robust risk management practices underpinned by a strong risk culture, thereby assisting institutions that provide payment acceptance services to gain the trust and confidence of their stakeholders. In this project, we assessed the risk management culture at management and non-management levels of a merchant card acquiring bank ('the acquirer') in the card payment acceptance industry, using the Centre for Applied Risk Management Risk Culture Questionnaire (UARM RCQ-2016). The results indicated that a strong risk management culture is perceived to exist at this institution. In addition, we found significant differences in risk management culture perception between managers and non-managers of the organisation. This research project illustrated a practical method for assessing risk culture and obtaining suggestions for improving the maturity of risk culture in card payment acceptance and related organisations. The approach employed in this study provides valuable and real-world information, which may also be used to assess the risk culture of other segments in the card payment acceptance process, such as issuing banks and merchants.