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15 Nov
2023

How to maximize your payment authorization rate

How to maximize your payment authorization rate

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Every great business aims for a seamless online payment experience with a high acceptance rate. But there are factors like technical issues, inefficient workflows or fraud prevention measures that can get in the way of your payment success.

Luckily thereโ€™s a fix. By implementing a smart payment operating system customized to your business needs, you can maximize your payment authorization rates to the fullest while minimizing your engineering efforts.

Why businesses need a customizable payment solution

Customization is the name of the game when it comes to any kind of digital experience, and payment flows are no exception. For businesses this means having a payment infrastructure that can be easily configured to meet their specific business needs, which in turn will give their customers the best possible payment experience โ€“ and which will then result in increased payment acceptance rates.

An effective payment setup will allow you to create efficient and cost-effective payment flows. For instance, you could configure the system to automatically route transactions through a payment gateway that offers the most favorable terms for a given type of transaction, thereby reducing costs and improving acceptance rates.

A successful payment system will also allow you to make quick adjustments to your payment process, which is crucial in the rapidly changing eCommerce landscape where speed and adaptability can make or break a business. Whether it's integrating a new payment method that's gaining popularity in a key market or enhancing fraud detection measures in response to emerging threats, a customizable payment platform allows you to respond promptly to changing circumstances, resulting in improved payment success rates.

How to set up your payment flows for increased payment authorization rates

Optimizing payment flows means going beyond just integrating Payment Service Providers (PSPs). It involves managing all transactions and fine-tuning the whole payment process. The goal is to increase the success rate of transactions, reduce friction for customers, improve security, and contribute to your business's growth.

So how can you do this? Consider implementing these six key features into your payment setup.ย 

โ€๐Ÿ’กTip: Payrails combines all of these features in our unified payment operating platform. Learn more at the end of this article!

  1. Workflows: In a payment process, workflows are critical for synchronizing various internal applications and third-party services that interact with the payment flow. This might include refund management, reconciliation, dispute resolution, and customer notifications.ย 
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    For instance, when a customer requests a refund, the request travels through several stages: After the initial acceptance of the request, it interacts with the payment gateway, after which the funds are transferred, ending with the customer being notified about the refund. Implementing automated workflows in your payment platform ensures these steps occur seamlessly and consistently, reducing the chance for error and improving overall efficiency.
  1. Ledgers: Ledgers act as a financial source of truth, keeping a record of every transaction, including payments, refunds, chargebacks and fees. Since digital payments can include different currencies, payment methods and geographical regions, maintaining a real-time, accurate ledger is crucial for effective cash management and reducing complexity. It helps in avoiding discrepancies, spotting fraud, and ensuring regulatory compliance. Moreover, it facilitates financial auditing and reporting, which is key to making informed strategic decisions.
  1. Dynamic routing: Dynamic routing can help maximize transaction success rates by taking factors such as geographical location, transaction value, card type, and even the time of day into account when routing transactions through the vast array of available payment processors and gateways. A rule engine is used to define the criteria for routing transactions based on these factors.ย 
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    For example, if a certain gateway demonstrates better authorization rates for high-value transactions from Europe during evening hours, similar transactions would be directed through this gateway according to the rules defined in the rule engine. Such optimization can significantly improve authorization rates and ensure cost-effectiveness.
  1. Fallback & retry: An important functionality built into payment operating systems like Payrails is the automatic fallback and retry mechanism. This functionality comes into play if a transaction fails with one payment processor, the platform will automatically retry it with another. This approach not only increases the chances of transaction success but also minimizes customer friction by avoiding the need for manual re-attempt or switching to a different payment method. Over time, this can contribute significantly to reducing churn and increasing sales.
  1. Token vault: Security is paramount in any payment process, especially considering the high risks of data breaches. To ensure security, consider incorporating token vaults. These vaults replace sensitive payment data with unique identifiers, also known as tokens, which make the data useless for potential hackers. This strategy not only significantly enhances data security but also simplifies compliance with data protection regulations.
  1. Customizable SDKs: Payment operating systems offer customizable Software Development Kits (SDKs) that empower businesses to tailor their checkout interface according to their brand aesthetics and customer expectations. The range of customization options can include everything from the arrangement of payment options to the inclusion of preferred languages or currencies. This allows businesses to ensure a user-friendly checkout experience, significantly reducing cart abandonment as well as boosting customer engagement and conversion rates.

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Increase your payment success rate with Payrails

Creating smart, revenue-boosting payment flows is easy thanks to Payrails. Our modular, plug-and-play payment operating system empowers you to design workflows and leverage features that make sense for you. Build checkout experiences that your customers will love โ€“ chat with a Payrails team member today to learn more.

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Start optimizing your payments today