Starting 2025 with Smarter Payment Goals

When setting New Year’s resolutions, experts stress the importance of being specific. While goals like “improve authorization rates” or “reduce payment costs” may sound appealing as payment goals, they are often too broad to lead to measurable progress. 

As you define your payment goals for 2025, the key question is: how will you turn aspirations of higher authorization rates and lower costs into actionable steps that deliver real results?

Let’s dive into six resolutions that should be on your radar as you map out your New Year’s resolutions for payments. Which ones will you prioritize this year? 

Unlock Flexibility by Adding a New Processor

Relying on just one payment processor might seem like the easiest option, but it can actually hold you back from getting the most out of your payments. Switching to a multiprocessor setup unlocks some big advantages that can make a real difference.

With multiprocessors, you can route transactions to the best-fit processor based on authorization rates or costs, giving you more leverage in negotiations. Retrying declined transactions with other processors also helps you capture more revenue. Most importantly, a multiprocessor setup ensures operational resilience so that payments continue to flow even if one processor goes down.

In today’s competitive landscape, this level of flexibility and reliability is essential for maximizing payment success and driving business growth.

Reduce Revenue Loss by Deflecting First-Party Fraud

According to the Merchant Risk Council’s (MRC) 2024 Global Payments & Fraud Report, 63% of merchants reported increased first-party fraud over the past 12 months. For many businesses, first-party fraud has become a persistent leaky bucket of revenue loss that is challenging to identify and address. 

To address this resolution, merchants should consider strategically applying 3DS authentication to high-risk transactions or those where the issuer supports frictionless authentication. This approach allows merchants to shift chargeback liability for more transactions to issuing banks without introducing unnecessary friction for all customers. 

Merchants can further strengthen their defenses by leveraging chargeback recovery solutions capable of identifying first-party fraud and providing actionable cyber-intelligence to improve win rates for these chargebacks. With this data, merchants can also take advantage of Visa’s Compelling Evidence 3.0 or Mastercard’s First-Party Trust Program, which helps prevent first-party fraud chargebacks for eligible transactions.

Reduce Cost Per Payment with Least Cost Routing

Card network rails are the infrastructure and systems that facilitate electronic card transactions such as credit, debit, and prepaid card payments. Most card transactions are processed via traditional card network rails, such as Visa, Mastercard, American Express, and Discover. 

In certain countries, alternative card processing networks are available, often called regional or domestic networks. In the U.S., for instance, the PINless debit networks offer an alternative way of accepting a transaction that involves routing the payment through a regional debit card network — such as Accel, Pulse, NYCE, and Star — rather than the major card network rails mentioned above. In France, card transactions can often be routed down the Cartes Bancaire regional network, and in Australia, merchants can leverage the EftPOS alternative network for processing.

Alternative networks can be very useful for merchants because they often offer lower processing fees. There are drawbacks, however; for example, alternative networks do not support 3DS or network tokenization, can sometimes have lower authorization rates, and chargebacks can be difficult to dispute should they occur. 

To optimize your network strategy, you must determine which rail to send each transaction while balancing these tradeoffs.  

Lean Into AI to Improve Authorizations

Managing transactions today involves navigating an increasing number of decisions. Questions like, “Which processor should I use?”, “Is frictionless 3DS an option?”, and “Should I use network tokens?” are now central to payment strategies. However, these decisions are often guided by static, manual rulesets that struggle to adapt to variations among issuers, geographies, or the potential impact on authorization rates.

Fortunately, advancements in ML and AI over the past few years are empowering merchants to make more informed, dynamic decisions for each of these challenges. Merchants should consider implementing these advancements to improve their authorization rates. 

Broaden Issuer Partnership Reach to Reduce False Declines

Merchants often perceive issuers as a black box — difficult to communicate with and challenging to understand when it comes to their authorization decisions. For your top five issuers, consider making it a priority to establish a relationship with them. Building these connections can provide valuable insights into why certain transactions are being declined and offer clarity on their credit risk appetite. With this understanding, you can optimize your transaction payloads to align with issuer preferences, ultimately improving your authorization rates.

Add a New Payment Method

A recent Forbes report shared that 53% of consumers now use digital wallets more often than traditional payment methods. To meet the growing demand for this payment option, merchants should assess whether integrating digital wallets into their mobile apps or websites aligns with customer preferences and business goals.

Merchants should also monitor pay-by-bank. Although it is still in its early stages in the U.S., it is a growing trend worth tracking. 

The new year is a great time to evaluate your strategy and place your bets for 2025. When making your resolutions, remember to be specific and consider trends that have the most influence on your business.