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As businesses expand and sell globally, they may notice the costs of payments going up and their authorized transactions going down. This may cause worry — and it should. But global intelligent payment routing can help reverse those trends and increase your company’s profitability.
If you’d like to improve your authorization rates and reduce what you spend on payments, it is essential to understand global intelligent payment routing and the best way to bring it to your company.
What Is Global Intelligent Payment Routing?
Global intelligent payment routing is when a payment is routed to the bank most likely to approve the transaction at the lowest cost based on a number of aspects of the specific transaction. True global intelligent payment routing relies both on in-depth payment analytics accrued from thousands of transactions and a robust network of global banks with multiple options in each region. This powerful combination is key to payment optimization.
Unfortunately, many payment service providers connect each merchant account to one bank. Even if your payments are set up with multiple accounts through a single provider — perhaps one for each country you sell in — your transactions are most likely not being routed intelligently and are instead routed to the one bank that the account is boarded to.
In this situation, businesses that want the benefits of optimized payments with global intelligent payment routing (including higher authorization rates and lower costs) need to build the logic themselves.
Can You Build Your Own Payment Routing Logic?
Companies that possess internal payments expertise may attempt to build their own payment routing logic, allowing them to route transactions appropriately. For example, when, for example, a customer with a France-issued card makes a purchase on your American website, you could create logic to route the transaction to an acquiring bank in the same region (following card brand rules) and benefit from local card acquiring.
While developing this type of process is possible, it’s also complex. Here’s why:
- First, you would need to work with multiple payment service providers in every region you sell to increase your acceptance rates and have failover. You will probably need to commit to a certain amount of volume with each provider you contract with, and that will need to be worked into the logic.
- Once you’ve established your partnerships, you need to plan, build and launch the payment logic.
- Then, you’ll need to ensure your predetermined rules and decisions are regularly maintained. You’ll want to be sure to set the process up to handle rapid updates in response to how your routing is performing.
- Additionally, you will need to compile and standardize the reporting for all your payment processing to be able to analyze and feed information back to the business and your routing rules. There is no industry standard for payments reporting, making this a significant undertaking.
For many companies, managing their own global intelligent payment routing just isn’t feasible. Thankfully, there is a better way.
A Better Way: Global Intelligent Payment Routing from BlueSnap
Unlike other payment processors, BlueSnap is a Global Payment Orchestration Platform. This means that BlueSnap can:
- Help you increase your authorization rates while lowering costs
- Support multiple use cases
- Provide the value-added services needed to support your payments
- Reduce the technical debt associated with payments (like maintaining your own payment routing logic)
Our global intelligent payment routing has been shown to increase profit margins by up to 6% by analyzing transaction characteristics, including currency, issuing country, payment type and more. It helps you minimize your declines and maximize your revenue gains.
Global intelligent payment routing is just one tool BlueSnap uses to help you optimize payments. You can also benefit from:
- Local card acquiring in 47 countries
- Level 2 and 3 data processing
- Multiple levels of tokenization
- 3-D Secure
- Account updater for cards on file
The Global Payment Orchestration Platform gives you all the tools you need to support global payments and improve your bottom line.
Related Resources:
- 5 Ways to Improve Your Debit and Credit Card Authorization Rates
- Global Payment Orchestration: The Key to Getting the Most Value from Payments
- BlueSnap’s Ultimate Guide to Cross-Border Payments
Frequently Asked Questions
What is Intelligent Payment Routing?
Intelligent Payment Routing is automatic transaction routing between multiple acquiring banks to increase the success rates of payment conversions — including failovers and subscription retries.
How does Intelligent Payment Routing work?
As soon as a customer submits payment, after going through fraud checks, a payment service provider with Intelligent Payment Routing will consider all the transaction’s applicable criteria. The technology will instantly determine which acquiring bank has the highest possible success rate and will route the transaction appropriately.
What’s the difference between traditional payment routing and Intelligent Payment Routing?
Traditional payment routing is a static process that connects to a single, regional acquiring bank. Even larger businesses that have access to multiple acquiring banks are limited by traditional payment routing as it always follows the same logic for every transaction. This can result in a higher number of declines.
Smart or Intelligent Payment Routing addresses these issues by identifying the most efficient route between available banks. It sends transactions for approval in the most optimal manner based on selected parameters. It is an essential payment processing feature for any business.