No matter how good your payments performance, there’s always room for improvement. Here are four ideas to help your business boost authorisation rates.
Payments is never done. Recognising that is what sets the world’s leading companies apart from the rest. They adopt a continuous improvement mindset, because they realise that even the slightest improvement in their payments performance can significantly impact revenues.
Here are four ways for businesses to improve payments performance:
- Mine payments data for insights
- Utilise the knowledge and expertise of your payments partner
- Leverage strong customer authentication
- Use the right merchant category codes (MCCs)
Mine payments data for insights
A vast amount of data is generated around each payment and may be sent in the issuer’s authorisation response. However, the frustration is that it often remains tantalisingly out of reach.
This could be because it’s trapped in the web of interconnected systems and silos that make up legacy payment infrastructures. Or it’s eroded as it moves through systems up to 30 years old and unable to retain and pass the data – a data set may be up to 90% diluted this way. Or it’s consolidated and oversimplified by providers who are focused on serving the needs of smaller businesses.
Research shows that 65% of businesses don’t receive detailed raw response codes on failed payments. This ranges from them receiving no response codes at all to grouped response codes that only provide a generic overview of why payments have failed. Either way, they are not enough for businesses to proactively take action to improve authorisation rates.
At Checkout.com, they provide over 150 different response codes, giving businesses complete visibility into why issuers reject their payments. Their expert teams also work with every business to develop strategies to improve their overall payments performance.
Utilise the knowledge and expertise of your payments partner
Leading companies may have a global vision for their business and brand. But they realise that a global template must come with all-important local flexibility to succeed in international markets.
They also realise that interpreting payment data is as much an art as a science. That’s why they’re increasingly leaning on their payment partners to help explain the data they have and how they can use it to drive payments performance.
Authorisation requests in the issuer’s currency are more likely to be successful than requests in foreign currencies. So, offer local currency pricing, either with a multi-currency solution or via dynamic currency conversion to customers when they checkout.
Similarly, requests from domestic acquirers may be approved more readily than those from international acquirers. It pays to take advantage of smart routing and domestic acquiring in some markets to ensure more payments are successfully authorised.
An understanding of local market nuances also helps hone retry strategies for failed payments. For example, authorisation requests are more likely to be approved during business hours in the customer’s time zone. And when funds are on hand after customers receive their salary. Naturally, this differs from market to market.
Businesses should question whether their payments partner has the resources, knowledge and in-country expertise to provide this insight and support. By working with the right payments provider, businesses can unlock a world of possibilities sooner than they think.
Leverage strong customer authentication
The arrival of strong customer authentication (SCA) requirements in the UK and European Economic Area (EEA) is leading to more stringent checks on a payer’s identity. As a result, more transactions are being ‘soft declined’. This is when the issuer asks for step-up authentication from the cardholder before approving or declining the transaction.
Make SCA work for your business by adopting 3DS2 protocols. This revised standard complies with SCA requirements and allows over 100 data points to be exchanged between you and the card issuer. This is around ten times more information than 3DS1, enabling quicker, more accurate decision-making.
This in turn translates into more first-time approvals and fewer step-up authentication requests. It’s a win-win-win situation for you, the card issuer and your mutual customer.
Bear in mind that not every transaction requires SCA; there are exemptions. Develop an exemption strategy tailored to your business and customers. This defines the route a transaction takes to maximise chances of a frictionless flow and approval by the issuer.
For example, if a transaction is low risk and within your own risk appetite, you may want to signal to the issuer that you’ve performed Transaction Risk Analysis (TRA) and only share data via the 3DS2 frictionless flow. This will contribute towards higher issuer trust and approval rates.
Use the right merchant category codes (MCCs)
Merchant category codes, sometimes known as MCCs for short or card acceptor business codes, are four-digit numbers assigned to a merchant. They classify the merchant’s nature of business or sector within the card schemes. And allow issuing banks to block transactions from certain sectors (e.g. gambling) and otherwise manage their risk exposure.
Each issuer has its own fraud detection systems. These are fallible as they sometimes reject legitimate transactions, also known as false positives. If your business receives declines with the reason code ‘blocked for fraud’, maybe your MCC is not optimal or flagged by the issuer.
To resolve this, businesses should speak with that issuer, either directly or through their payment service provider. At Checkout.com, their issuer outreach solution automates this process for businesses to eliminate this issue as soon as it’s identified.
Optimised payments gives access to revenue
Optimising payment performance is an untapped opportunity for revenue growth in many organisations. Find out how to get onto the path to performance with Checkout.com’s new guide.
This article has been republished with permission from Checkout.com.
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