If you’re an e-commerce merchant selling across border, you’ve got to answer a few questions:
- What methods of payment should you support in each country you sell in? Not every country is as infatuated with cards as is the U.S.
- And even if customers in those countries are using cards, how do you optimize your authorization rate? If you’re not sophisticated about this, your decline rate could exceed 40%, a huge hit. It turns out routing transactions via local acquiring banks is one answer. But how do you do that?
- Subscription services store card numbers or a tokenized version to initiate periodic payment transactions. They never want to have a card declined because they, honestly, don’t want to have to contact customers to request they update their card account info because some portion of those customers are going to decide to cancel little used subscriptions. How does a merchant mitigate those lost payments?
Serving the e-commerce needs of merchants operating across borders is a primary focus of payments service provider BlueSnap. In this conversation with BlueSnap CEO Ralph Dangelmaier and Payments on Fire® host George Peabody, you’ll hear how multiple discrete steps combine to keep AUTH rates high and costs in line.
Frictionless is not a Differentiator
Ralph is a well respected payments industry veteran. He shares his views on fintech and the opportunities available to new players in payments. He makes the point that, with 30% of users using wallets, cached payment credentials, and one-click payments, the frictionless checkout is no longer the differentiator. It’s cost control and AUTH optimization
AUTH Optimization is the Priority
He also discusses the needs of his primary customers: mid-tier e-commerce merchants doing $1B in sales but needing help around the particular challenges of operating internationally.
Ralph makes the point that revenue optimization results from doing multiple smaller things right. Card authorization rate optimization requires multiple steps.
1. Use local acquiring banks to route transactions into the card networks.
2. If a merchant wants to use fewer acquirers overall, then send those acquirers more data to help them make a better decision.
3. Looking at the BIN data from individual banks, determine which acquirers have the highest AUTH rate against a given issuer. Perform A/B tests with local acquirers against each issuer in order to determine the best path for a card transaction.
4. Adjust fraud settings to match local conditions
5. And plan to adjust these parameters on a regular basis. Things change so “set and forget” is not an option.
In other words, small things, in aggregate, really matter. And make each step, as Ralph says, “local, local, local.”
