As online business grows exponentially, finally fulfilling the internet’s promise of a ‘global village’ in which anyone can buy and sell anything from anywhere, CellPoint Digitalis providing merchants with the ability to increase conversions, reduce operational costs, and boost profits.
Typically, merchants retain long-term partnerships with a single acquirer that processes credit or debit payments on their behalf. However, leading merchants and payment services providers are increasingly finding that working with multiple acquirers can deliver compelling commercial benefits.
As a payment orchestration platform provider, CellPoint Digital connects merchants through an API to the acquirers they want, that will support them on their growth journey. This ensures they can offer customers anywhere in the world the seamless payments experience that is so desired.
While many merchants still opt for traditional payment services, others are learning that this one-size-fits-all approach is becoming incompatible with a more complex and international eCommerce landscape.
Here Mark Patrick, Head of Global Payments explores the concept of multi-acquirer strategies and touches upon the benefits to customers of CellPoint Digital’s solutions.
What is a multi-acquirer strategy?
A multi-acquirer strategy is one in which a merchant holds accounts with more than one acquirer which processes credit, debit or alternative payment methods. According to a recent study by ACI, over 60% of merchants already have such a strategy. Factors such as the sector they operate in, their size, and the regions they cover all contribute to a merchant’s decision to diversify the number of acquirers they work with, but others are more universal.
Though introducing multiple players might at first appear to be a complication of a merchant’s payments ecosystem, the advantages of a multi-acquirer strategy are significant.
Increased conversion rates
Increasing the completed number of sales is essential for achieving growth objectives, yet is impeded by the likes of declined transactions, abandoned carts and unsatisfactory customer experiences.
With increased payments acceptance – facilitated by more intelligent routing – coupled with an ability to accept a wider range of payment methods, merchants are able to provide their customers with a greater mix of both domestic and international payment options.
Reduced operating costs
For merchants who accept payments in one currency while accepting settlement in another, the cost of processing those transactions can be prohibitively high. In many cases, processing transactions cross-border can result in incremental costs of as much as 1%. Intelligent routing of transactions using a combination of payment types and processors can also drive the overall transaction cost down, while increasing the likelihood of obtaining an authorization.
Maintaining technical connections to more than one processing partner also carries significant cost, particularly if there is no automated failover capability that enables transactions to flow – regardless of system downtime. Use of a payment orchestration platform allows merchants to have greater uptime, flexibility, and transparency in their payment ecosystem.
Accepting the payments consumers want
Today’s merchants need to be able to take various forms of payments to maximise sales.
It has been found that when online shoppers cannot pay with their preferred method, they are not just more likely to abandon their carts but 56% may never return to the site. Furthermore, 40% of shoppers would feel more comfortable purchasing from a merchant that offers a wide range of payment options over one that can only offer a single payment method. –
Of course, the risk is that merchants over-compensate, attempt to offer customers every payment method available and create an experience that is overwhelming. By instead combining a regional strategy with intelligent routing, diverse customer demands can still be satisfied as part of an efficient and streamlined payments ecosystem.
The transaction speeds and success rates of payment gateways can vary considerably depending on payment methods used and consumer location.
Smart routing offers a solution through the use of advanced data analytics and technologies such as artificial intelligence (AI) and machine learning (ML). By analysing large datasets according to payment method and location, it can be determined which payment gateways will generate optimum returns per transaction. It means merchants can more effectively process payments, enhance revenues, or save on cross border transaction fees.
Merchants across the globe are now implementing these dynamic routing techniques on a much broader scale and boosting their transaction success rates both domestically and across borders.
With a greater online presence, more and more merchants are offering their services globally. However, meeting regulatory mandates as part of a global operation is complex.
With a Payment Orchestration Platform forming the bedrock of a multi-acquirer strategy, merchants use a custom-designed solution designed to not only manage multiple PSPs but also achieve jurisdiction-based compliance.
The Platform provides the merchant with PCI compliance using flexible tokenisation of personal data and streamlines KYC and PSD2 management, helping the merchant ensure compliance while reducing compliance costs.
Less is not always more
The deeper we get into the digital age and the greater the emphasis is placed on the simplicity of technological solutions, the easier it becomes to assume that the same applies to the third parties we work with. If one partner can provide the services we need, why use two?
In many cases this is a sensible, even prudent position to take. But the rule does not apply to acquirers. As each can offer different services depending on its size, location, and pricing structure, connecting to as many acquirers as possible is how optimal returns can be leveraged.
By developing a multi-acquirer strategy, merchants can plug into different acquirers across the globe, helping them to expand cross border and avoid the need to navigate relationships with individual acquirers. And, with intelligent routing, each payment is processed in a way that works best for both merchants and customers alike.