Important Features and Benefits of Payment Routing

A variety of factors are required for a buyer to have a purchasing process smooth. The one thing that people aren’t aware of is what happens “behind the scenes” to determine if a purchase is successful or rejected. The secret lies in intelligent payment routing, which involves routing the transaction in a way that is likely to succeed and get approved.

What Causes Payments to Not Work

There are numerous reasons for a payment to fail, but we can divide them into three categories:

1. Technical motives
2. The reason for the financial problem is due to the customer
3. Reasons for risk assessment

The economic reasons are usually the most straightforward to comprehend. In the majority of cases, the card’s limits are reached or the account of the cardholder does not have enough funds to fund the transaction.

However, the risk assessment and technical causes are more complex. Transactions can fail due to a technical glitch due to one of the major players in a transaction, however, it could be due to an insufficient connection between the bank and the acquirer or even fraudulent risk assessment-related reasons.

How Does Payment Routing Solutions Affect Businesses?

Payment routing is a part of existence when you accept cashless payments (e.g. debit and credit cards) or when you operate an online business.

The technology could be an advantage or a burden for payment processing.

On the other side, intelligent payment routing is much more secure and efficient than cash. It’s also the base technology that makes eCommerce possible.

 

However, the traditional payment route also restricts payments to only the bank that you are acquiring in your network of payment. If you restrict your primary market to a single country the payment routing option is still a good option.

 

If the world is calling and demands, you’re not able to meet their requirements. Any attempts to accept payment platforms result in declined transactions, angry customers, and the loss of growth.

 

Like its predecessor, intelligent payment routing is also revolutionary for merchants selling online.

Payment Routing Solutions allows your company to step confidently into the world stage. It lets you:

• Internationally reach out to a large audience, which includes the most valuable emerging markets
• Accept payments seamlessly to help customers to buy
• Be different from your competitors
• Reduce the cost of your sales and marketing efforts

What Is the Reason Routing Is Worth the Effort?

Global intelligent payment routing assists merchants who are part of multi-provider settings tackle three major issues:

• Enhance the Rate of Success

If you route each transaction to the payment gateway that has the highest rates of authorization for these types of transactions it is possible to significantly improve your acceptance rates. Routing engines allow merchants to set up retry methods to deal with “soft declined” transactions, to recoup sales otherwise lost.

• Reduce the Cost of Transactions

Utilizing multiple PSPs you can direct each transaction to the service which offers the most competitive cost. The ability to determine the most cost-effective method to complete each transaction could help you save 30 percent or more in payment fees.

• Keep the Redundancy of Payment Processes

The integration of a variety of payment gateways will enhance customer satisfaction and ensure that your operations are running smoothly whatever the circumstance through the routing process and cascading.

The Most Important Features of the Payment Routing Technology

1. Transaction Load Balancing: Split and Disperse the Volume of Payments

Utilize the Smart Routing Engine to distribute payment volume among your PSPs. The load balancing feature – which automatically switches transactions between multiple payment service providers, ensures that the most efficient providers manage the crucial parts that you conduct transactions.

It reduces the risk for high-risk merchants. Also, it stops the over-use of contractual volume.

2. Cascading

Create the cascaded processing of transactions to safeguard the flow of payment during the time of any technical difficulties such as outages or commercial disputes or other business issues.

If the transaction is unsuccessful at the first payment service provider and it will be processed by the smart routing engine automatically forwards the transaction to a different service provider, and then on. This increases the chances that the transaction will be successful.

3. Geo-Optimization and Cross-Border Payments

Geographical criteria are important to choosing the most affordable payment service provider as well as to reducing decline rates. The greater the distance between the issuer of the card with the purchaser, the greater the processing costs are likely to be. This also increases the chance of the transaction being rejected.

4. Risk-Based Routing

Make use of the risk classification for each transaction to determine the best route. Increase authorization rates and forward transactions to the top providers. Examine risk scores based on guidelines and send transactions to the best providers to increase the chances of authorization.

5. Transaction Fallback

The availability that your service providers have is crucial especially when processing batch transactions (e.g. to provide recurring service). The payment fallback routing occurs when a transaction cannot be completed in case of failed request (including false positives or payment provider outage/unavailability).

Fallback payment routing will automatically try to retry transactions in the event of errors, like failures, false-positive declines, and other system-related errors. It forwards the transaction to a different payment service provider if the primary one is not available.

This makes sure that transactions are completed, bottlenecks are eliminated as well as your financials are secured.