In the dynamic world of digital payments, leveraging multiple processors continues to be a strategic approach for merchants aiming to increase resilience, reduce costs, and maintain control over payment processing. According to the 2024 Global Payments and Fraud Report by the MRC, merchants are utilizing an average of four processors.
To maximize the impact of a multiprocessor strategy, merchants should consider two key areas: using agnostic, third-party providers for key services and leveraging intelligent payment routing. Learn how layering these two areas into your multiprocessor strategy can improve payment outcomes, including increasing conversions and reducing costs.
Using Agnostic, Third-Party Services
Utilizing multiple processors necessitates using agnostic services in critical areas such as fraud decisions, 3DS, tokenization, chargeback recovery, and analytics. While many processors offer some or all of these services, centralizing them with an external agnostic provider can:
Ensure Requirements are Met
Agnostic solutions often have the resources and investment to provide higher quality solutions that meet specific requirements, particularly in critical areas like fraud detection. Disparate fraud models from different processors can complicate a unified approach to fraud prevention and open the door to fraud risk. Centralizing these services with an agnostic vendor that meets merchant-specified requirements can ensure the right solution for each critical service is in place.
Improve Efficiency
Managing various portals, flows, and interfaces across multiple processors can lead to inefficiency. This is especially prevalent for services that require frequent interaction or management, such as chargeback recovery or analytics. Each processor has a unique interface or process of disputing chargebacks that teams need to learn, which can lead to inefficiency — especially when onboarding new employees. In addition, processors may calculate key metrics differently, complicating the overall management and ability to generate holistic business insights. By centralizing these services, merchants can unify their workflows and gain key insights across all of their processors — boosting efficiency.
Reduce Costs
Purchasing similar services from multiple processors often leads to duplicative costs. This is especially evident in tokenization, where processor-specific tokens can often not be leveraged with other processors. Thus, merchants may need to maintain an updated card vault with each processor. Employing agnostic tokens can prevent this issue by ensuring tokens are not bound to a single processor, thus facilitating easier transitions between services and reducing unnecessary duplicative expenditures.
Intelligent Payment Routing
Many merchants currently rely on manual rules for processor routing, which can be labor-intensive and error-prone. Leveraging AI in intelligent routing can revolutionize this process by automating the selection of the optimal processor for each transaction based on criteria like cost, success rate, or geographical location. This not only reduces the overhead associated with manual adjustments but also minimizes error risks, ensuring that each transaction is processed in the most efficient way possible.
Maximizing your multiprocessor strategy requires thoughtful consideration and strategic planning. Merchants can significantly enhance their payment processing capabilities by centralizing key services with agnostic solution providers and leveraging AI for intelligent routing, leading to cost savings and higher conversion rates.
As the payment landscape continues to evolve, adopting such forward-thinking strategies will be crucial for staying competitive and meeting the ever-changing demands of consumers.