In today's competitive market, it's standard practice for merchants to build redundancy into their payment ecosystems by integrating multiple payment options or acquirers. This approach not only shields your business from the ever-changing appetites of individual acquirers but also allows you to operate seamlessly across multiple markets. By leveraging a range of acquirers, you can maximise new capabilities and ensure continuity.

Depending on your payment service provider, you can further enhance this strategy by utilising payment cascading. This method can significantly improve your approval ratios, boosting revenue and enhancing customer satisfaction.

How Does Payment Cascading Work?

When a customer initiates a payment, the transaction is first routed to your primary payment provider. If the transaction is declined or fails, the system analyses the decline in real-time. Common reasons might include technical issues, gateway downtime, or the card not being accepted by the primary provider. The transaction is then automatically redirected to the next payment provider in the sequence, seamlessly and without disrupting the customer’s experience.
This process continues until the transaction is approved or all available payment providers have been tried.

Benefits of Cascading

• Increased Success Rate: One of the most significant advantages of payment cascading is the higher success rate for transactions. By providing multiple opportunities for a payment to be processed, merchants can minimise the chances of losing sales due to failed transactions.
• Enhanced Customer Experience: A smooth checkout process is crucial for customer satisfaction. Payment failures can lead to customer frustration and even abandoned purchases. Cascading gateways reduce the likelihood of these issues, ensuring a frictionless payment experience.
• International Payments: For businesses operating globally, cascading payment providers enable the use of local processors that may offer better acceptance rates for local cards or payment methods. This geographical flexibility ensures that transactions from different regions are handled optimally.

Frequently Asked Questions

Does the consumer have to complete multiple 3DS verifications?
If your payment provider handles 3DS verification at the gateway level, this typically prevents the need for customers to complete a new 3DS verification.

Why would my payment decline with one provider but be approved by another?
This can occur for various reasons, such as technical setups, velocity limits, or downtime. Genuine declines, however, are not passed through for retries.

How much can this typically improve our approval ratios?
The improvement can vary depending on factors like sector and connected payment providers, but we estimate an increase of up to 10%.

What is a genuine decline?
In certain instances, cascading cannot improve approval ratios, depending on the decline reason code. Genuine declines include reasons such as insufficient funds, 3DS failure, or incorrect card details. These declines are assessed in real-time and are not passed through the cascading sequence.

If you’d like to discuss how Axcess can help your business improve its approval ratios, book a call with one of our payment consultants using the link below.