How cascading сan improve approval ratio and save your budget
Innovations in financial technology determine trends in online payments. By using advanced mechanisms, your project can always remain competitive and increase profits. A payment cascade is one of the most significant capabilities of modern payment systems, the main task of which is to reduce the number of declined payments and increase payment approval ratio. Let's take a closer look at what payment cascading is and how it can be used in payment flow of an online casino, dating website, or any online product.
What is cascading
Payment cascading is a processing feature that distributes already declined transactions among several payment channels so that the payment can still be completed. That is, if a transaction was declined by payment method that the payer initially used, it still has a chance to be successful if the merchant redirects it to another payment gateway on time.
In real world, many reasons may cause unsuccessful transaction: technical error of payment system, difficulties with accepting payments from a particular country, payer mistakes, and a host of other factors. Also, payment systems cannot operate maintaining 100% productivity. Unfortunately, this is impossible in reality, as much as we all want it. Therefore, cascading allows payment systems (or gateways within one system) to "help" each other and still hold the user after one unsuccessful payment attempt.
However, in a standard situation on most websites, cascading is not set up because of its technical complexity and required additional effort. Moreover, not all payment methods can be cascaded. Also, not everyone is aware of existence of this technology. A lot depends on the algorithm of payment systems operation and functionality of the merchant's software. Therefore, user has a choice after an unsuccessful payment attempt: enter their payment details again in another payment method, risking that payment will be declined a second time, or leave the deposit page and choose another website. Most are inclined to choose the second option and never return. Even the most persistent user may eventually abandon attempts to pay if nothing works out for him. As a result, declined transactions harm income growth and spoil the quality of service.
So how can cascading help in this situation? Thanks to the cascading setup of several identical payment methods, for example, card acquiring, after an unsuccessful first payment attempt, the user will immediately be offered a new gateway to repeat the payment attempt. Instantly in the same window and without re-entering payment details. All of them are saved in the cache, and only the CVV code will need to be entered again in this case. This setup allows to repeat attempt and the process is not separated from the initial attempt by a series of actions. And therefore, all process on the payment page do not lead to user confusion. For this approach to work, technical settings must allow several payment systems to perform payment processing one after another. There can be two, three, or even more of them. Of course, it is not recommended to make a cascade of 10 methods and expect the user to go through them all until he reaches the exact one. Therefore, cascading always works together with smart routing.
Routing and cascading: complementary technologies
It is important to understand that payment cascading comes into action only after a payment attempt has been made, but for some reason payment did not finalize successfully. Its main function is to automatically cascade (redirect) the current payment attempt to another payment solution for successful completion within one payment session. All happens without changing the payment method at the checkout, without additional complexity for the user of your website.
Smart routing, on the other hand, improves the process itself and assists cascading. Earlier, we published a more detailed article about what routing is and how it can be used to increase processing efficiency. Smart routing allows you to configure payment flows so that transaction gets to the most suitable payment solution. That is, initially, rules are set to manage payment processing on your website and are aimed at maximizing positive experience of the payer and higher approval ratio. At the same time, if the chosen route for the client's transaction turned out to be not the best in reality and the payment still did not go through, cascading comes into play and finalizes payment attempt.
To determine the best payment system for each transaction, technology goes through all providers according to several parameters so that each transaction can potentially be processed by several solutions meeting these parameters. Thus, if payment attempt was unsuccessful through one of the payment solutions, it is transferred to another one that also meets the selected criteria.
Benefits of using cascading
Based on a detailed examination of cascading technology nature, the main reasons why it should be used on your website can be highlighted. If you actively use card acquiring in many countries and want the processing work non-stop, the combination of routing and cascading is an indispensable tool for you. Depending on the technical capabilities of your software, you can make different settings and implement the necessary principles in different ways. But in the end, they should lead you to a result where you will get such benefits:
- Reducing the number of unsuccessful transactions: with the correct cascade setup, you can minimize the number of declines. An unsuccessful payment attempt is one of the main reasons why potential users say goodbye to the website. By distributing declined transactions among several channels and successfully processing them, you can negate this reason and achieve audience loyalty.
- High-quality user experience: cascading technology provides a seamless flow of payments and a user experience that you want to return to. The main advantage for users is the simplicity of the entire process — since there is no need to press additional buttons or look for other payment options. This is already done. For business owners, this can also be very convenient if payment system or aggregator takes over the entire process. With self-implementation, there may be more difficulties, but also a larger set of functions for modifications.
- Increased profit: approval rate of payments is one of the main factors in the growth of merchants' revenue. With the growth of successful transactions, most probably profit also grows. Moreover, there is an opportunity to save on the fees for declined transactions.
Thus, cascading is an important component of a successful payment strategy and a profitable infrastructure. By using new ideas and technologies, you can get rid of old problems and do it faster than competitors. In today's online business environment, payment systems can become a constant headache or a competitive advantage. What exactly they will be for you depends on how seriously you invest in your payment processes. Working with us will definitely be a successful investment. We at Monoup know the secret of a successful payment strategy and will develop it for you to cover your specific needs. Text us in the contact form here or my email.
