09/09/2021

The benefits of Smart Routing

By Mariana Almeida Marques

Seamless payment experiences are key in ensuring customer satisfaction. Unsurprisingly, there is a large number of payment tools that enable companies to optimise their payment processes and deliver fast and reliable checkout experiences to their customers. Smart routing is a particularly valuable tool for businesses that operate globally and deal with multiple payment providers. Imburse provides you with smart routing capabilities, so you can continue to exceed customer expectations and effectively leverage transactions.

What is payment routing?

The basis of card transactions lie on payment routing that connects the Issuing bank to the Acquiring bank. For instance, when you insert your card details on an online checkout page, the merchant’s bank (acquirer) will route this set of numbers to the Issuing bank (customer’s bank), ensuring that the payment is taken from the correct bank account.

If the card details are wrong, or the bank is unable to route these details to the right bank account, the payment is unsuccessful. Declined payments can really have a negative impact on any business. Not only is the business losing sales, it is also potentially losing customers that may be purchasing from somewhere else in the next time.

What is a routing number?

The routing number is a number used to identify your bank. In the US, this number is composed of 9 digits and may also be called Routing Transit Number (RTN) or American Bankers Association (ABA) routing number. This number isn’t confidential, so you may find it on your bank’s website or, alternatively, by logging in to your account portal online. In the UK, routing numbers are called sort codes and contain only 6 digits. Note that the routing number only identifies the bank- not your personal account, so you will need to provide more details, such as your account number, for the payment to be processed.

You can add a payment reference when paying bills or transferring money online.

What is smart routing?

Small businesses may have just one gateway and processor to process all of their payments. However, when businesses expand their services internationally, they need to make sure that their gateway covers all the countries they operate in, from currencies to payment methods, card types to issuing banks. They also need to make sure that each transaction is directed to the right gateway to prevent technical issues and declined payments.

Smart routing is particularly beneficial for large businesses who, due to their sales size and geographical reach, have to deal with multiple gateways and processors to accommodate customers’ needs. Having more than one processor naturally makes their payments system more complex and harder to navigate. Functionalities such as smart routing play a huge role in facilitating transactions, ensuring that customers can choose however they want to pay and that their transactions will be routed to the most suitable gateway.

This technology accesses each transaction and routes it to the best gateway, based on multiple factors such as currency, payment type, card issuer, location or amount. By using smart routing, merchants are ensuring transactions have the highest chances of success. Smart routing can be incredibly helpful not only for businesses that operate internationally, but for those that have very large sales volumes, as some gateways may experience technical failures when sales are particularly high (think Black Friday, for example, for ecommerce businesses).

payment routing can be helpful for businesses with high sales volumes

Benefits of smart routing

  • Higher success rates

As mentioned previously, smart routing enables each transaction to be routed to the gateway that has the highest authorisation rates. In case the transaction is declined by one gateway, it will automatically be routed to the second best gateway. This prevents payments from being declined and prevents your company from losing potential sales.

  • Lower transaction costs

Each gateway has its own transaction fees. By routing each transaction to its most suitable gateway, companies can better leverage transactions to lower costs. Think of currency exchanges, for instance. If your company is based in the UK and your customer is based in Portugal, choosing a gateway that accepts Euros will avoid extra currency exchange costs.

  • Customer satisfaction

Customers are expecting a fast and seamless payment experience. If a transaction is declined, they are naturally more likely to leave the checkout page and look for other companies to purchase from. Providing your customers with a wide variety of payment options and a fast and reliable checkout process can increase customer satisfaction and, potentially, customer loyalty- a highly important metric for any business.

payment processors are key for every business.

How Imburse can help

Imburse enables companies to connect to any payment provider or technology available in any market. By connecting to our platform, you will be able to quickly and easily deploy any payment technology you want. Aside from simplifying integrations and saving you time, money and resources, the Imburse platform comes packed with all the tools and functionalities you need to fully optimise your payments system.

We provide you access to all the latest technologies at all times, including smart routing tools to enhance your customers’ payments experiences. If you would like to know more about how Imburse can help your business, drop us a message below. Our team will be happy to guide you through our solution and offer you a free demo.

Author

Mariana Marques

Mariana is a content writer at Imburse, specialising in Finance and Technology topics.

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