When you own a business, getting funds from your customers in full and on time is one of your most important concerns. Of course, establishing a full set of infrastructure, procedures, and customer service is key to making this happen. 

But did you know that you can also change the way your payments are routed to further optimize your chances of internal and competitive success?

Intelligent payment routing defined.

Intelligent payment routing transforms how payments are processed. It uses advanced methods to analyze each separate transaction, sending it to the optimal gateway or processor.

Simply put, intelligent payment routing gives you a way to increase the efficiency and success of your entire payment infrastructure. When the process is running smoothly at all touchpoints, the instances of failed payments that you encounter will be reduced, augmenting cash flow, budgeting, and marketing. 

As a result, you will be able to rise above your competitors.

Integral to smart payment routing techniques is the dynamic selection in real time of payment gateways based on predefined criteria. The system employs algorithms and technologies to examine each transaction. It then employs these details to select the best gateway or processor.

Factors to be figured into the equation include historical data, provider details, geographic information, and card type. 

All of these considerations are automatically fed into the system’s sophisticated algorithms and technology, which determine in an instant where the payment should be sent for the greatest likelihood of success.

The steps involved in smart payments.

Intelligent payment routing involves five major steps. They include payment initiation, routing decision, dynamic routing, transaction processing, and feedback and optimization.

Although intelligent payment routing takes place in the blink of an eye, there are actually several components that must occur. It starts when the customer initiates a payment and provides vital details such as card type, geographic location, currency, and payment method. 

With this data at its disposal, the smart payment routing solution determines the best way to channel the transaction. Once the decision has been made by the system, the payment is dynamically routed, sometimes to more than one channel in order to maximize the chances of success and keep fees low.

Now that the routing has occurred, the payment gateway or processor completes the traditional steps with which you are probably already familiar: authorization, authentication, and settlement via communications with the issuing bank and card networks. 

On an ongoing basis, transaction performance is monitored and analyzed. With the feedback gathered, systems can be improved and adjusted to ensure that payments continue to be channeled optimally.

Benefits of intelligent payment routing.

Intelligent payment routing brings numerous benefits to modern businesses. These include affordability, increased payment success rates, expanded global reach, boosted security, streamlined processes, improved customer experience, and keener insights.

Affordability and success rates. 

When you improve the way your payments are routed, your business will immediately reap the rewards. Fees and transaction costs, which can often be onerous, can be reduced when transactions are channeled to the most affordable providers. 

Payment success rates rise, reducing instances of declinations and shopping cart abandonment as your revenue rises.

Expanded global reach. 

Smart payment routing allows you to process payments in multiple regions and currencies. When you use it, you can appeal to a broader customer base and get the word out about your brand far beyond your own borders. 

All the while, the system is routing transactions through trusted providers who implement and constantly update anti-fraud and other security measures to protect the data from endpoint to endpoint. As a result, chargebacks and declinations will be reduced, and your brand reputation will flourish.

Streamlined processes. 

Automated, dynamic payment routing drastically reduces the amount of manual labor you will need to do, streamlining your processes and allowing you to use your resources to their best effect. 

As your internal operations improve in scope and efficiency, you will see an uptick in the experiences your customers report. When their transactions are faster with fewer failures, their purchasing journey will go from frustrating to flawless, increasing the likelihood that they will come back to shop with you in the future.

Better insights. 

Your system will keep track of each transaction, making it possible for you to create actionable reports that examine payment performance metrics, customer shopping behaviors, and transaction patterns. 

The insights that you gain can help you forge your next pricing strategies, marketing tactics, and engagement mechanisms.

Gain an advantage over your competitors.

When you implement smart payment routing techniques, you can rise above your rivals. These methods give you everything you need to enhance the payment experience, personalize each shopper’s journey, and keep your information safe.

Setting your business above your many competitors is one of the most challenging aspects of running a successful company. 

More than furnishing products and services that people want at a price they can afford, marketing success means shoring up all of the internal mechanisms and procedures that work behind the scenes to turn a lackluster purchase into a memorable one that a customer is eager to repeat.

Although smart payment routing might be undetectable by the customer, its effects certainly are palpable. Buyers might not know why it has happened, but they recognize that they can complete checkout seamlessly with no interruptions or declinations. 

Many are all too aware that this streamlined experience cannot be found with every company, and will then be more likely to choose yours because of its trouble-free, security-forward payment systems.

What’s more, your intelligent payments routing system keeps track of a slew of data points that reflect buying behaviors, transaction patterns, and payment performance details. 

The insights that you gain from analyzing this information can enable you to create the gold standard in customer experience that serves to elevate you above your peers and furnish you with the keys to success.

At one time, payment processing was linear. Sellers had no choice as to how funding transactions were channeled. Now, thanks to innovative smart payment processing, each transaction can be guided toward the most efficient and affordable outcome. 

If you have not already implemented intelligent payment routing in your operations, talk to your merchant account provider today to take the first steps. Your customers – and your bank account – will thank you.