Credit Card Vaulting: Direct Merchants vs Cloud Platforms

Written by
Justin Benson
Publication Date
March 24, 2014
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Modern payment gateways allow you to tokenize a card and stay outside of PCI compliance scope. Spreedly is unique in that we allow you to tokenize the card and then pass the underlying PAN to the payment gateway of your choice. The card never gets locked in or tokenized at any one particular gateway. 

Why not just try and use a single global payment gateway? Great question. If you can, you should. For one, you'll save on Spreedly's fees. However, if you want to benefit from in-country transactions which are generally superior to cross border, then Spreedly can be a great choice. 

There's a couple of reasons why you might want to consider this approach: 1decline rates tend to be lower within a country and processing costs are also much often lower. It also provides you with the additional benefit of being able to easily charge customers in their local currency and manage foreign exchange and remittance challenges separate from the payment gateway - this is an area where gateways tend to be feature-lite and fall outside their core area of expertise. 

Spreedly customers such as Cabify initially collect and store a card from their customer and run that payment information against a Spanish payment gateway when that person orders a black car locally. But when that customer gets off the plane in Mexico and takes a car to their hotel, Spreedly gives Cabify the ability to then also run that same card against a Mexican payment gateway with no additional information or action required on the customer's part. The process is seamless and provides a superior customer experience, while also significantly lowering the processing cost incurred by Cabify by eliminating the need for a cross-border transaction (which tend to be riskier and incur higher decline rates). 

From an App/developer perspective, Cabify has a single point of integration and one secure location for all their data. That doesn't change whether they're supporting 2 countries or 20. From the business side, they can quickly add a new payment gateway when they enter a new region. If the gateway doesn't perform as expected, or after being in the country for a while they realize there is a better option, they can easily switch. This dramatically reduces due diligence when selecting your payment gateway. 

Let's say you come at the market from a slightly different angle. You have a mobile app that allows customers to quickly and easily book a taxi. So you want to securely store that card, get a token and stay out of PCI compliance scope. However, in your model you pass the final charge through to the participating taxi company. In this model, you have the payment gateway credentials for each taxi company set up in Spreedly. Now you're passing the final charge against the payment gateway of the particular taxi they booked. 

Here again you want the retain that card and never have it locked in to a gateway. However, you also want to work with a range of payment gateways. Yaxi is a Spreedly customer doing exactly that right now, but we have many others doing something similar. 

Another interesting mobile example is BusBud. They take the hard work out of booking a bus ticket by integrating with multiple bus companies behind the scenes. So they go out and buy the segments against the different payment gateways for their participating bus company partners. 

Now, we have some really cool things planned for bus and other travel companies that will expose a booking API rather than being limited to solely transact against a payment gateway as is currently the case. But more on that soon - we're still in beta.

Now you can see why we talk about creating a Stripe/Braintree type experience but *across* multiple payment gateways. 

You know who you are and now you know that we're here for you - we love hearing about new user cases we haven't even thought of yet!

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