All You Should Know About Payment Routing
With international online payments, businesses must ensure the payments follow the right route and the right payment providers process them.
Successful payment routing is possible when a merchant makes proper payment connections and leverages technical know-how. Payment routing starts when a customer makes a non-cash payment such as online purchases or payments through credit and debit cards.
Processing a transaction requires all the payment system components to be in sync. These include issues, acquirers, and payment providers among others to ensure payment processing takes the path of least resistance.
So, what seems to be a simple and fast process for shoppers demands complex connections and powerful technology. Running an online business makes the process more complex.
Payment routing is popular in multi-provider setups since it offers flexible payment processing. Multiple payment providers give merchants more control over the flow of payment.
Besides, multiple providers result in freedom and increase the negotiation power of merchants as they route payments through various providers. This results in high payment acceptance rates.
Today, smart routing enhances the traditional method of payment routing. Smart routing brought special payment partners like Payment Orchestration Providers (POP) that are revolutionizing payment processing.
The new routing approach relies on collecting and evaluating payment data. This helps establish the success and failure rates associated with various payment combinations. It allows merchants to select a routing strategy that suits them.
Smart routing transcends shifting to or combining various payment providers for smooth routing of international transactions. It works in collaboration with acquirers and issuers across the world.
Through innovative functionality referred to as BIN (Bank Identification Number) Routing on POPs. It is an advanced mechanism way of routing payments through BIN information.
The goal of using BIN Routing to improve the payment acceptance rate while decreasing the cost of each transaction. Usually, international transactions cost more since they pose more risks if both acquirer and issuer in different countries.
With BIN Routing, merchants can create specific BIN lists to route transactions within those BINs via a specific payment provider. This ensures that the acquiring and issuing banks that partake in the processing are in the same country or coincide.
As a result, it increases both transaction speed and success rate while attracting the least possible per-transaction cost. With smart routing, merchants have a flexible atmosphere for processing payments.
Thanks to POPs, merchants can connect to various providers that provide them with routing options they probably won’t access. Through access to smart routing via POPs, merchants have remarkable customization opportunities.
They can even fine-tune their own payment strategy. Payment routing benefits both customers and merchants. Customers have an experience of uninterrupted payment. On the other hand, merchants benefit from low transaction costs and a high payment success rate.
Regardless of whether a business handles local or international business, payment routing is still relevant. Like the predecessor, smart routing is transforming eCommerce.
Smart payment routing allows businesses to confidently venture into the global marketplace.
This article has been published in accordance with Socialnomics’ disclosure policy.