Wouldn't it be great to have some magic wand that you could use to tweak every single aspect of your business operations and reach the highest success rates? Maybe, but we live in fantastic times when these goals are achievable without falling back on magic. Miracles aside, handy and tangible smart payment processing solutions are the answer.
Frictionless payment processing is frequently listed among the cornerstones of customer satisfaction. Done right, it can also spare your business many sorts of trouble.
In this article, we'll dive into what smart payment processing is, which tools it uses, and how such systems equip your business for growth.
What is smart payment processing?
The most common and basic definition of payment processing is settling an online transaction between the customer and the merchant, performed by a third-party digital service (payment processor). Depending on the payment method, this process consists of various steps and may involve different parties (banks, digital wallet providers, payment systems, etc.). The result of payment processing is a processed transaction, whether accepted or declined.
Today, offering just one or two traditional payment options is not enough. The payment industry becomes increasingly complex as new digital payment methods and technologies appear and change customers' preferences, requiring businesses to keep up. To stay afloat and make your way through the competition, you should grant a seamless and straightforward yet versatile shopping and payment experience. Efficient payment processing is one of its essential elements.
Smart payment processing is a set of solutions designed to make payment processing not only frictionless and optimised for the customer but also effortless, streamlined, and beneficial for the business.
The smart processing toolkit
The particular smart payment system offering varies from one payment software provider to another. Most of them offer intelligent payment routing, which is a great tool itself but comes in all its glory when paired with other instruments.
We at Corefy see our smart processing engine as a system comprising:
- Smart payment routing;
- Currency conversion;
- Anti-fraud tools.
Let's explore them to learn what they do and why they're worth integrating.
Smart payment routing
Routing is one of the crucial elements of payment processing. If you work with a single payment service provider, every issue on their side will result in your losses. For example, just a minute of downtime would cost Amazon more than $220K. To avoid situations like that, it's reasonable to integrate with multiple providers. This is when you need to route your payments in the best way possible.
One of our previous articles told you that payment routing can be static and dynamic and explained how they differ. With dynamic routing rules, all transactions can be instantly analysed and automatically routed to the optimal provider based on a variety of selected parameters, like card issuer (country, bank, INN/BIN), type, and brand; auth mode (CVV/3DS); store (commerce account); location; amount; currency, etc.
Another feature of our intelligent routing is the optimisation presets, allowing you to easily set up routing according to your goals. For instance, you can optimise costs by letting the smart payment system determine the optimal route for each transaction based on a fee value. Visit our product page to learn more about presets.
💡 MORE: Payment routing 101: the essentials you must know
Cascading is one more feature of the intelligent payment routing strategy. It helps to avoid the loss of sales caused by the provider's malfunctions. When a situation like that occurs, each transaction will be automatically rerouted to the active vendor. You can pre-define the alternative routes for cascading various transactions.
Even the most stable and trustworthy payment providers sometimes experience technical problems, making successful transaction processing impossible. If the company works with several providers, it always has a plan B if one provider faces downtime.
Denys Kyrychenko, Corefy Co-founder & CEO
It results in a dramatic decrease in the decline rates and, therefore, a revenue boost. By relying on cascading, you can increase conversion, making this tool very valuable to businesses.
Dynamic currency conversion
Effective currency conversion becomes an increasingly important part of your payment processing as your business grows.
With an intelligent payment processing system, you can save on conversion fees and earn money.
You don't need to maintain a balance in every currency. Multi-currency conversion allows you to display the prices in the preferred currencies and accept such payments even if you do not have a balance in all of those currencies. This way, your customers can pay in the currency of their choice without hidden charges. It positively affects their payment experience, while you can expand your business and mitigate the risks.
You can opt for dynamic currency conversion schemes to automatically set conversion rates for every currency pair based on the preferable source.
💡 MORE: Multicurrency payments acceptance: how to do it effectively
Online payments must be secure for both shoppers and sellers. That's why we created a toolkit for alleviating risks and fighting fraud.
For instance, you can selectively apply 3D Secure to certain filtered transactions, automatically cut off suspicious or undesirable traffic using blocking schemes with configurable dynamic rules, add payers to the blocklist after several failed attempts to complete a transaction, etc.
In his article for Hackernoon, our CTO Dmytro Dziubenko lists the following methods to fight fraud that payment providers use: configuring a rule engine, using scoring and AI, creating blocklists, passing PCI DSS compliance, reconciling transactions, and collecting interaction logs. Press here to learn about each one.
Rule engines, scoring services, artificial intelligence, and block lists based on a variety of attributes prevent businesses from processing suspicious transactions. Reconciliation, interaction logs, and high-quality infrastructure help minimise the possibility of problem cases and enable businesses to solve occurring issues quickly. PCI DSS compliance implies a set of security measures that a company working with payments has to implement to protect customers’ data and transactions.
Dmytro Dziubenko, Corefy Co-founder & CTO
Seven benefits of smart payment processing
The effect of intelligent processing boils down to these seven benefits every business wants and needs:
- Increased conversion. Some companies see up to a 40% increase in conversion rates as they choose smart processing systems. On average, businesses face a 10-20% increase.
- Lower fees. Finding the lowest-cost way for each transaction and selecting the exchange rates can save you up to 30% in payment fees.
- Protection. Fraud prevention and risk mitigation instruments reduce fraud losses by more than 20%.
- Fast processing. All the magic happens under the hood, instantly and seamlessly for the customer.
- Automation. Though all smart processing tools are highly configurable, you can sit back and enjoy once you've found what works best for your business.
- Customers satisfaction. Grant your customer what they're striving for — convenience, simplicity, security and versatility.
- Frictionless operations. Put yourself out of trouble and panic when something goes wrong and cash flow stumbles. A smart processing system is a kind of insurance policy helping to avoid lost transactions.
How to start using smart processing tools
If you work with multiple payment providers and feel an intelligent payment processing system is what your company needs, you can integrate and get on board with us. Contact us to get all the necessary information and help with getting started.