There are very good use cases for connecting to multiple payment gateways, and likewise there are use cases for simply connecting to a single gateway. As a merchant, how do I know if my specific business needs could be better met by a multi-provider strategy? The answer comes down to your need for Reach, Redundancy, Resiliency, Regulation, and ROI.
Reach is the the need to ensure no market segment is left behind as your business grows. Online merchants processing international payments have been aware for a long time that gateways operate differently across regions. Support for local payment methods and currencies is a critical requirement for businesses looking to expand to new markets.
Transaction fees can vary by gateway with respect to geographic regions and currencies. When you consider this variance, it becomes clear that optimizing for a multi-provider solution can have a direct impact on your bottom line. A single-provider solution works well while operating in a single market, but as you expand into new countries it will become essential to adopt multiple payment gateways.
In addition to multiple geographies and currencies, platforms and online marketplaces also sometimes support payment processing for third-party sellers and sub-contractors who connect to their own gateways. If you are not able to support the payment provider of your underlying platform participants you will either need to take on payment processing yourself or request your participants to adapt to your single-provider solution.
By connecting with multiple endpoints, these merchants are able to easily onboard and attract new participants in their marketplace who already have an established payment gateway relationship.
Redundancy is the need to ensure critical payments data is accessible through multiple channels and backed up in multiple places, not just at a single point of failure.
Scaling enterprises can no longer afford for payment methods to be isolated in a single-provider vault — due to limitations of scale and risks of outage. When storing payment methods and processing with a single-provider, you become locked in to their solution and limited to the global footprint of that gateway. Because all of your payment methods are stored in the gateway’s vault, your entire payment network is limited to the transactions that single gateway is able to process.
Imagine a platform that collects customer payment information to process transactions in US dollars, and as soon as that customer wishes to make a purchase in Euros must collect payment information again. The friction of this experience leads to high shopping cart abandonment and a poor customer experience.
Spreedly offers a neutral, third-party vault that can send any stored payment method to any supported endpoint. No longer would you be required to lock each payment method into each individual gateway.
A redundant payment solution ensures that an outage at any single point will not prevent you from transacting. With a multiple-gateway solution and third-party vaulting, payment methods can be duplicated between Spreedly and a gateway’s vault. After creating a payment method with Spreedly, you have the option to store that payment method with the gateway as well. This way, whether transacting through Spreedly or with the gateway directly, you ensure a single point of failure will not prevent you from processing critical payments.
Resiliency is the need to optimize transaction success through fault tolerance across multiple endpoints. At large enough scale, a small percentage of payment failures could result in thousands or millions in lost revenue. Once connected to multiple endpoints, you can develop rules to increase the probability of success for each transaction.
Spreedly provides a fault tolerant solution that will not attempt to send transactions to an endpoint where an outage has been detected. You can also develop rules for routing transactions during times of peak volume. For merchants who process large volumes of time sensitive payments, such as event tickets or holiday shopping deals, you must ensure the volume is not going to overwhelm your gateway provider and impact your ability to complete transactions.
Regulation is the need to meet standards and requirements to be allowed to operate in specific geographies, types of transactions, and industry segments. Innovation in the payments industry evolves not only from merchant and consumer driven needs but also those of governments and other regulatory bodies.
Spreedly provides the infrastructure to meet regulatory requirements so that you do not have to worry about doing it yourself. From the very beginning, offering PCI DSS compliance as a service has enabled merchants to greatly reduce infrastructure costs by reducing compliance scope. As regulations evolve, Spreedly is also evolving to ensure merchants are able to meet compliance requirements such as the Payment Services Directive and Card Network Stored Credentials Mandates across their multiple payment service providers.
ROI is the objective impact you see when adopting Spreedly to enable a multi-provider solution. All of the first four or five R’s could be accomplished individually, but Spreedly combines all of them together on a single platform and provides additional services on top to increase both top- and bottom-line figures.
Services like Account Updater create a tangible impact on top-line revenue. As a merchant who processes recurring payments, out-of-date stored card accounts are a segment of transactions that will always fail. These transactions are low-hanging fruit to be resolved, and by applying the Account Updater service to your vault you can easily capture this otherwise lost revenue segment.
Adopting a multi-provider strategy through Spreedly also helps merchants optimize their bottom-line. Payment gateways understand the complexity of developing a payment solution and know once you are hooked in to their system it is difficult to leave. With a single point of integration to access any payment service, Spreedly customers are able to negotiate and reduce transaction processing fees to make a quantifiable impact on their bottom line.
Whether looking to extend your reach into new marketplaces, ensure redundancy in your payment solutions, build in resiliency to optimize transaction success rates, comply with industry regulations, or enhance your opportunities to optimize ROI, a multiple-provider solution for payment gateways through the Spreedly platform should be a consideration as you scale your business.