Smart Routing: Smoothing the Way to Business Expansion

Relationships are the core of every business. That’s certainly true when it comes to processing payments, whether you’re a merchant working with payment service providers (PSPs) or a PSP working with acquirers.

While it’s good to have a PSP you trust, it pays to partner with multiple PSPs to ensure you can accept consumers’ preferred methods of payment across different countries. Unsurprisingly, 69 percent of eCommerce merchants prefer to partner with multiple PSPs to optimize their payments operations. Diversifying payment risk across PSPs helps provide failover routing so that your payments are accepted even if there are issues processing with your default PSP.

Most PSPs use multiple acquirers

What’s true for a merchant is even more important for a PSP. According to an Edgar, Dunn & Company survey conducted on behalf of ACI Worldwide, over 70 percent of PSPs work with two or more acquirers. Three main reasons are behind PSPs preference for working with multiple acquirers: resilience, flexibility and cost control. 

Having multiple acquirers enables PSPs to maintain continuity of business operations in the face of a service failure on the acquirer side or acquirer bankruptcy.  In the event of any issues, a transaction can be rerouted to an alternative acquirer.

A multi-acquirer strategy also provides flexibility to route transactions in a manner that maximizes payment acceptance and increases the variety of alternative payment methods accepted. This is crucial as cross-border eCommerce booms, with it anticipated to reach $500 billion by 2025. The ability to process local payment methods like boleto, PostePay WeChat and more will be crucial for merchants seeking to capture a share of this growing pie and the PSPs that serve them. No wonder some 45 percent of PSPs see flexibility as the primary benefit of being acquirer-agnostic, according to the Edgar, Dunn & Company survey.

From a cost control perspective, higher acceptance rates for payments due to greater flexibility in routing translates into less money spent on processing payments. In addition, using multiple acquirers provides the PSP with greater negotiating leverage in establishing commercial terms with individual acquirers. In both cases, these savings can be passed on by PSPs to their merchant customers.

The payoff at the end of the day is that multi-acquirer PSPs have acceptance rates 16 percent higher than those that work with a single acquirer.

Addressing the downside of a multi-acquirer strategy

For merchants and PSPs working with multiple PSPs and acquirers, respectively, is not without its challenges. A more fragmented payments environment can have a variety of negative impacts, such as added management costs and difficulties in extracting and aggregating payment data.

As just one example, keeping up to date on chargeback deadlines and representment performance can be more difficult for merchants when payments are spread across multiple PSPs. This is where Justt comes in handy.  Our Optimus tool gives merchants clarity on their chargeback data, using dashboards and reports, and if needed, also perform actions on chargeback cases.

By connecting us to your PSP accounts, you will automatically receive your chargeback data in an easy to view format on a centralized Optimus dashboard.  You will be able to sort your chargebacks by ARN, PSP name, date and more. If your PSP has a partnership with Justt you will see this information displayed along with the option to have Justt fight your chargebacks for you.

Leveraging the Justt solution

Justt is a hands-off solution that lets you focus on your core business, while providing industry leading success rates in fighting chargebacks. Because of our success fee model, we don’t add any built-in costs to your operations. You just share with us a percentage of the revenue recovered.

Already a substantial number of merchants say that their current payment acceptance infrastructure has become a significant inhibitor to the growth of their business. Consider smart routing for your payments in conjunction with Justt’s solution as a means to removing that obstacle.