The Importance of Independence for Online Merchants
This article was written by Nathalie Siegl and originally published in The Paypers.
About Nathalie: As Chief Executive and Financial Officer of the IXOLIT Group, Nathalie is a leading woman in tech. In 2014, she led the development and launch of the IXOPAY Payment Orchestration Platform, which addresses the global payment needs of merchants and licenced payment institutions. Contact Nathalie on LinkedIn.
Whether you are breaking into new markets or expanding nationally, attempting to ensure the best processing for your transactions will require you to work with multiple payment service providers (PSPs). The best way to do that is to use a payment orchestration layer, which connects you from just one API to multiple payment service providers and payment methods. In fact, more payment businesses are realising that payment orchestration is the future of online payments and are now adapting their services in order to offer a comparable experience.
A quick glance at the products available and you can see how much these companies vary in fee structure, transaction lifecycle, data availability, and granularity. But what else should merchants look out for?
Why is a multi-acquirer set up essential for online payments?
If a payment service provider is unavailable or not as secure as previously thought, it can cut off revenue streams and suddenly throw your business into a state of turmoil. eCommerce merchants need to make sure that they are protecting themselves. If for any reason a PSP is no longer operational, merchants need to be able to quickly pivot and integrate a new one. We can learn lessons from industries that are considered high-risk such as Crypto, iGaming, or Forex as often payment providers decide–without warning–that the risk involved with these industries is not worth it and cut ties with the company altogether. Because of this, high-risk companies generally have carefully structured their payment solutions in order to prepare for such eventualities. They are therefore connected to multiple PSPs and make use of payment orchestration platform features such as cascading, risk checks, and smart routing. This allows them to adapt when situations change.
Another issue which negatively impacts a business and the customer experience is that if your payment provider were to suddenly disappear, because they no longer wish to work with you or they are experiencing technical difficulties, you may not be able to access your customers’ payment data. This is not only the case for recurring/repeat payments, but for all your customers who have “securely” stored their payment data in their customer profile. In fact, businesses who store their payment data directly with the payment service provider are at risk of provider lock-in. This means that they will not be able to easily access their payment data and share this information with other providers, giving their users a streamlined experience, and benefiting themselves from higher acceptance rates and better processing fees.
To avoid this, it is advisable to store all payment data with a PCI certified payment management solution. By vaulting this information externally from the payment providers it makes it possible to route transactions to the most appropriate providers without customers having to re-enter their payment details. A multi-acquirer setup gives the merchant complete control over the transactions’ lifecycle.
Why is independence an important feature?
As more and more regulated financial institutions seek to profit from buying out payment technology providers. Merchants are being presented with one-stop-shops. This means the payment orchestration platform is also intertwined with an acquirer. Although it sounds convenient, it is not necessarily a good deal for the merchant.
If your payment orchestration platform is not acquirer agnostic, you are at risk of being limited with your connections. There may be a raft of payment methods you can choose from, but whether or not they will be the best for your business and your target group is another matter entirely. This topic is especially pertinent when you are considering expanding to new jurisdictions and markets. Being tied to the partnerships created by a financial institution can be detrimental to your growth by not providing access to the best products and services that are on the market.
Independence is key for a business if they are to have access to the best and most appropriate services and products available. An acquirer agnostic payment orchestration platform, like IXOPAY, has the one-stop-shop functionality without the limitations. As a pure technology company, IXOPAY has no vested interest in limiting or influencing the clients' choice of financial service providers. From one API, you can connect to any acquirer and payment service provider, allowing you to be completely in charge of your payments. You will also be able to implement smart routing, set risk rules, and run A/B tests across providers. Not only does this protect you and your revenue stream, it also provides unfiltered access to a world of payments, increasing your audience and enabling your company to further expand.
The payments industry is a complex and ever-growing jungle. Trying to figure out the best solution for your business can be like trying to paint a rainbow in the dark. An acquirer agnostic payment orchestration platform will give you the flexibility and independence you need.
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IXOPAY is a payments orchestration platform enabling independent, flexible and global payment processing. As a highly scalable and PCI-DSS certified “fintech enabler”, IXOPAY fulfills the needs of large merchants as well as those of “white label” clients: payment service providers (PSPs), acquirers and independent sales organizations (ISOs). The modern, easily extendable architecture offers smart transaction routing & cascading, state-of-the-art risk & fraud management, fully automated reconciliation and settlements processing, comprehensive reporting as well as plugin-based integration of acquirers, payment service providers and alternative payment methods (APMs).
IXOPAY is part of the IXOLIT Group, founded in Vienna, Austria in 2001. With local entities in Austria and the USA, IXOLIT supports national and international customers across various industry verticals. The owner-led and -financed company has grown from 2 to more than 80 employees and is focused on building innovative solutions for eCommerce.
Please find more information about IXOPAY here: https://www.ixopay.com