Manage Your Payments Smartly
Your business’ payments are probably quite complex due to the increase in the types and number of payment options that have popped up in recent years. As your enterprise grows across geographies you are forced to deal with multiple payment methods in different countries while trying to cut related costs and increase efficiency. You have probably already discovered that declines are a costly headache, especially if you handle vast amounts of payments as a matter of course. And there so many forms of payments to deal with: Countless credit cards, e-wallets, and debit cards from all over the world, to mention just a few. As you expand, you experience more frequent declines which incur customer frustration, increased costs and avoidable delays.
An Intelligent Approach to payments management
Global payment methods vary at different locations. A payment option widely used in one geographical location is not necessarily suitable at another. Here are some tips on how smart management of the payment methods you offer can increase approval rates:
1) Avoid Processing Downtime
Downtime is a bane that can cause a PSP or banking institution to decline a legitimate payment. Frustrated customers may turn their back on your brand if this happens too often. You can avoid downtimes by rerouting transactions to a different processor in real time. You can even use decline rate data collected by a payment management system to create rules that anticipate when and where certain credit cards will be declined in advance.
2) Offer More Payment Options
It pays to study the payment methods at various localities and understand what the local population prefers (for example debit cards or e-wallets as opposed to credit cards). Not only does this put your customers at ease, but it also ensures greater approval rates. The use of familiar local payment methods ensures much lower fees and decreases the risk of downtime. In many cases, if you choose to stick to payment methods or credit cards that are unpopular in new regions, you are risking costly declines and customer alienation.
3) Detect Fraud in Advance
Detect fraud at an early stage by integrating data tools that learn customer behavior, detect anomalies, and flag transactions as potentially fraudulent. For example, if a loyal customer has always shopped with the brand from an IP address in Florida, but suddenly is paying from an IP address somewhere in China, the payment technology can either decline the transaction or flag it for manual review = by a company fraud expert. The same applies if the customer is logging in at a different time or radically changing their shopping habits.
4) Prevent False Declines
Significant losses from fraud have resulted in a super-cautious trend of declining legitimate transactions. US card issuers falsely declined $264 billion in 2016 and this number is expected to rise to $331 billion by the end of this year. Throwing the baby out with the bath water comes to mind. By being over cautious, you may lose irate customers whose payments have been rejected while the issuer’s card automatically becomes less popular. A smart payment management platform enables you to create risk scores and filters to resolve the problem of false declines. You can use technological means such as multi-layered authentication, 3D Secure and biometrics to ensure a higher acceptance rate without risk.
5) Work with Multiple Local Acquirers
By connecting with local acquirers in each region rather than international ones you can optimize payment acceptances. At one time, working with multiple financial institutions was very complex and required demanding infrastructural changes. Today you can effortlessly connect to multiple local acquirers in real time, switching from one to another at each site in order to increase approval rate and lower fees.
6) Smart Route Your Payments using Data
Today, newly developed technologies can perform in-depth analysis of your enterprise’s payment data, providing you with greater understanding of trends and anomalies in your payment processes. By creating business rules based on these insights, you can not only increase acceptances, but also reduce fraud, boost conversions, generate customer loyalty and cut costs. For example, use one provider with higher AMEX specific approval rates to process AMEX transactions and another provider to process VISA transactions. This way, you can benefit from the plethora of payment providers available today.
In conclusion, even if your current approval rate is not staggering, rest assured there are many ways to improve. Since its your business revenue on the line, an even slightly higher approval rate could mean the world. We hope this helps!