How a Multiprocessor Strategy Can Improve Third-Party Payments
Making payments easier and more secure is a key goal of any business. To facilitate this, many businesses employ third-party payment processors to handle payments through methods like credit and debit cards. Authorization rate is a metric used to measure the success of these payment processes, and it can be improved by leveraging multiprocessor solutions.
In this article, we’ll discuss what an authorization rate in payments is and the potential limitations of using one payment processor, as well as the benefits of multi-processor solutions and how they can increase your business’s value.
What Is a Payment Authorization Rate?
A payment authorization rate is the percentage of payments that are successfully processed and accepted by a payment processor. This figure is one of the most important measures of success for any business, as it’s the primary indicator of how well your payment processes are running. A high authorization rate means customers are able to make payments quickly and securely with minimal delays or errors. A low authorization rate indicates issues with either merchant account or gateway issues as well as problems with merchant software and systems.
Why Is It Important to Have a Good Authorization Rate?
A good authorization rate is essential for any business, as it can directly affect your bottom line. A high authorization rate means that customers are able to make payments efficiently and securely, while a low rate could lead to a poor customer experience and lost sales.
What Are Payment Processors?
A payment processor, also referred to as a financial company or third-party processor, is an organization that acts as an intermediary between businesses and customers for the purpose of securely processing payments. Payment processors are responsible for transferring funds from customers to businesses and handling transactions such as refunds, discounts and coupons. Payment processors can serve a variety of purposes, including selling gift cards, providing banking services and processing credit card payments. Examples of popular payment processors include PayPal, Stripe and Worldpay.
What Are The Limitations of Using One Payment Processor?
Using a single payment processor can lead to a number of potential limitations, such as:
- A limited range of payment methods that customers can use
- A slower processing rate for payments
- Higher fees for certain types of payments
- Difficulties in setting up multiple accounts for different currencies or geographical regions
- Lack of flexibility when it comes to changing payment providers
What Is a Multiprocessor Strategy?
A multiprocessor strategy is a way of managing payments by using multiple payment processors. This allows businesses to have more flexibility when it comes to accepting different payment methods and currencies as well as reducing the risk of being over-reliant on one payment processor.
The Benefits of a Multiprocessor Strategy
By using multiple third-party payment processors, businesses can benefit in the following ways:
Higher authorization rate for payments: As each payment processor is independently authorized and approved, the chances of a customer’s payment going through are much higher. If a customer pays using a card or another type of payment method processed by one of your third-party processors and that specific payment method is approved, then there is a high probability that the whole payment will go through. This means customers will face fewer payment processing issues when trying to pay for goods or services at your business.
Wider range of payment options for customers: By accepting payments from a wide range of processing companies, businesses can give their customers more choices when it comes to making payments and can increase their customer satisfaction levels in the process. A business may be able to accept a variety of payment methods such as credit cards, debit cards, PayPal, Apple Pay, and more depending on how many third-party processors they use and which ones they choose.
Improved security and fraud prevention: Using multiple payment processors can help a business stay ahead of the curve when it comes to fraud prevention. Each processor may have their own set of security protocols and fraud detection tools, providing an extra layer of protection for customers’ data. When these services are combined together through multiple third-party processors, it creates an extra defense against fraud that a single processor cannot offer on its own.
How Improved Authorization Increases Your Business's Value
One of the main benefits of a multiprocessor strategy is the higher authorization rates that come with it. Read on to learn how those improved authorization rates could boost your business’s value.
Enhanced Customer Experience
One of the key benefits of improved authorization is that it can help improve the customer experience. By providing customers with more payment options, it gives them a wider range of products and services to choose from, allowing them to find the most suitable option for their needs. This ultimately leads to better satisfaction levels with the business and its services. Customers appreciate being able to pay using a range of different methods, which can make businesses more attractive to those looking for an online purchase.
Improved Security
Using multiple payment processors also has a few other benefits that have nothing to do with the processors themselves. By using more than one, you will help improve security and reduce fraud for your business. Every processor has its own set of security protocols and measures it uses to protect both the customer and the business from any potential fraudulent activity or data breaches. By using multiple processors, you can be sure that your business is adequately protected against any of these things happening.
Learn More About Increasing Your Transaction Security
Minimized Card Declines
Having multiple payment processors can be especially helpful in cases where one processor might have a lower authorization rate than another. Every processor uses a different authorization rate which dictates the percentage of transactions that it will approve. If your business is only using one processor, then you are limited to just that processor’s authorization rate, and it may be lower than rates from other processors. However, by using multiple processors, you can increase the overall authorization rate and reduce the number of declined transactions. This can be especially helpful during periods of high merchant chargebacks, such as the holiday season.
Increased Value
Using a multi-processor solution can also help to increase the value that your business provides. By having multiple processors, you can provide customers with more payment options and increased flexibility. This can lead to increased customer satisfaction and loyalty, resulting in higher revenues for your business.
Improved Speed to Market
Multi-processor solutions help to keep your time-to-market as fast as possible. You can quickly test different methods using multiple payment processors and find the most efficient one for your business. The increased availability and redundancy of multiple payment processors means that all your customers should see their payments processed, even if one processor is having technical issues. This greatly improves the customer experience and ensures that your customers don’t have to wait long periods of time for their payments to be processed.
Extra Revenue and Profitability
Multi-processor solutions can also increase your business’s revenue and profitability. By having multiple payment options, customers are more likely to choose the one that best suits their needs. This can lead to increased sales, as customers don’t have to go through the hassle of finding a different payment processor when they encounter problems with one.
Improve Your Payment Processes: Partner With PCI Booking
At PCI Booking, we understand the importance of having a reliable payment processor and payment service provider in order to keep your business running smoothly. That’s why we offer numerous payment gateways and customized software solutions that can help you increase your authorization rate. Plus, our team of experts will work with you to ensure that your payments are secure and that your customers have a positive experience every time they use our services. Contact us today to learn more about how we can help you improve your payment processes.