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Having a single payment provider may seem convenient, but it also creates a single point of failure that can be very damaging to businesses in the event of a disruption. Financial institutions of all sizes can suddenly fail, leaving their clients scrambling to find alternative payment solutions in a rush.
For businesses that rely heavily on digital payments, such disruptions can lead to significant financial losses and reputational damage. Especially if you rely on only one payment partner: If that provider experiences any technical issues or downtime, then you won’t be able to process any payments, leaving you with lost revenue and unhappy customers.
To ensure business continuity even in emergencies, you may want to consider integrating intelligent payment routing into your payment infrastructure.
What is payment routing?
Payment routing is a feature that allows businesses to intelligently direct payments to the most appropriate provider. You can set up your payment routing to consider certain factors, like the cost of processing fees, the purchase location, the transaction value, risk factors, and more. Payment routing significantly enhances efficiency and performance, leading to increased acceptance rates and minimized fraud.
Why payment routing is key for maintaining business continuity
Payment routing provides a vital safety net for businesses in case of unexpected disruptions. For instance, if a primary payment partner encounters downtime due to technical issues or network problems, a payment routing system can automatically redirect transactions to an alternative partner.
It is also possible to configure this manually if you prefer human intervention and additional approvals before key decisions, like where to route the transactions, are implemented. This adaptability enables e-commerce companies to safeguard their revenue streams and continue serving their customers without any interruptions.
How to choose payment service providers (PSP) for payment routing
Diversifying your payment system requires some initial investment, but it will pay off in the long run.
You should start by evaluating your current payment provider or providers to understand their capabilities and potential risks. Additionally, consider the types of payment methods your customers prefer to use and which new payment methods are emerging in the market, including alternative payment methods and instant payments.
To identify potential payment partners, start by researching payment providers that offer your desired payment methods and any other services or features your business requires. It helps also to consider which providers have the most experience in the industry and geography in which you are operating.
Factors businesses should always consider when choosing a payment service provider:
- Compliance
- Payment method and acquirer coverage
- Processing and transaction fees
Before selecting a payment partner, a comprehensive risk assessment should be performed, which includes evaluating the following:
- Network stability
- Failover mechanisms
- Security measures
- Disaster recovery
Integrate payment routing with Payrails
If you want to reduce your dependency on a single payment partner, Payrails can offer you a payment routing solution customized to your exact needs.
Our payment operating system allows digital platforms to take advantage of working with multiple payment partners, ensuring cost-effective and continuous payment processing, even when your primary partner faces network or technical issues. Accelerate the time to introduce new payment providers without significant in-house investments while keeping full flexibility in choosing your payment partners.
Contact us today, and let's work together to build your payment routing strategy and ensure that you have a reliable backup plan ready and implemented.
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