Addressing High-Risk Businesses' Challenges via Payment Orchestration - Akurateco
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Akurateco

Payment Orchestration for High-Risk Businesses: Addressing Industry-Specific Challenges

Aug 16, 2023
5 min
Table of Contents

    Partnering with a reliable payment software vendor is essential for every merchant. Yet, it is particularly true for high-risk industries. When running a high-risk business, you’re most likely to encounter high decline rates, increased fraud risk, costly interchange fees, and poor relations with banks, to name a few. Luckily, that’s precisely what payment software for high-risk industries is designed to resolve.

    In this article, we’ll explore how a payment orchestration platform tailored to high-risk businesses can help you mitigate fraud, optimize payment flow, increase approval rate, and much more.

    Payment orchestration platform for high-risk industries: What is it?

    When choosing payment software for your business, looking for vendors that specialize in high-risk industries is essential. The difference between payment software that caters to high-risk and low-risk companies is based on several factors. Here are some key points to consider:

    1. High-risk industries focus and relevant experience

    A payment platform vendor that caters to high-risk businesses would highlight it on its website, marketing materials, or other channels. Additionally, you’d like to ensure that your payment software vendor has a relevant experience in your industry. To discover more about the vendor’s expertise, you can research its reviews, ratings, and business cases.

    1. Advanced fraud prevention technologies

    Payment software that caters to high-risk industries should be equipped with advanced fraud prevention technologies that are more efficient than standard ones. Third-party risk-scoring providers must also be part of the vendor’s risk mitigation strategy.

    1. Multiple integrated banks and payment providers

    As high-risk payment industries often have substantial transaction loads and a diverse geographical clientele, they need to have a variety of integrated global and local banks and payment providers capable of handling high-risk transactions.

    Another catch is that acquirers processing high-risk transactions are at a greater risk of closing Merchant Identification Numbers (MIDs) or experiencing other processing issues. That is why a diversity of acquirers is essential for your business to be viable and operate seamlessly.

    1. Alternative payment methods 

    Considering the specifics of high-risk businesses, you should be able to offer your customers alternative payment methods, such as crypto-payments and electronic wallets, to meet their payment needs.

    1. Intelligent payment routing and cascading

    Payment routing is a vital technology for high-risk businesses as it automatically transfers each transaction to the most relevant payment provider, reducing decline rates and saving on processing costs. Payment cascading is another crucial technology for high-risk companies that distributes declined transactions between multiple payment channels to complete the payment successfully within one payment attempt.

    Top 4 payment challenges that payment software for high-risk industries addresses

    Based on the above criteria, a payment orchestration platform tailored to the needs of high risk is among the most efficient solutions for businesses. It is customizable white-label software equipped with the latest digital payment technologies and multiple integrations.

    Now, let’s take a look at the main issues it addresses for high-risk companies.

    Inefficient payment flow

    The number one problem multiple high-risk merchants encounter is inefficient payment flow which refers to cumbersome, time-consuming, or error-prone transaction processing. It can occur if a high-risk merchant leverages a payment system that lacks modern technologies or requires routine processes like billing or chargeback management to be handled manually. Ultimately, inefficient payment flow causes errors or delays in processing payments and results in lost revenue. 

    One of the leading technologies in payment flow optimization that payment orchestration provides to address this issue is intelligent payment routing, which allows you to configure routing parameters for different types of transactions independently. For instance, transactions can be routed to payment providers with the lowest processing fees. Given that high-risk businesses incur substantial interchange fees, implementing effective payment routing strategies is a way to mitigate these costs and optimize their revenue streams.

    Likewise, transactions can be routed by white lists. Payment routing by white lists refers to a strategy in which trustworthy payment transactions are directed to specified payment providers based on predefined criteria or lists of trusted users. Leveraging payment routing by white lists, a high-risk business can send trusted traffic to a particular bank or payment processor, reducing its interchange fees. Also, in this way, untrusted traffic will not go to the MID that works only with white lists; accordingly, this MID will have a low chargeback ratio, preventing it from closing. 

    To learn more about intelligent payment routing and all its parameters, check out the article below:

    Payment Routing: The Ultimate Guide

    Few integrations with banks and payment providers

    What often keeps high-risk businesses from reaching more customers and enhancing their payment experience is a small number of integrations with banks and payment providers. Aiming to serve a large, diverse audience, high-risk businesses should offer their customers a variety of payment methods, which may differ from region to region. Also, having a diverse range of payment integrations is essential not just to meet clients’ requirements but also to establish backup options if a certain provider becomes unresponsive or unavailable.

    It can be accomplished with a payment orchestration platform for high-risk businesses. At Akurateco, we offer 270+ integrated banks and payment providers available via one integration to the platform. They include global and local ones that provide traditional and alternative payment methods (APMs), including cryptocurrencies, e-wallets, mobile payments, and many others. We can also develop new integrations at your request, saving you time and effort.

    High decline rate

    Another eternal companion of high-risk businesses is a high decline rate due to the elevated risk level associated with their operations. Yet, unsuccessful payment attempts not only lead to lost revenue. They also cause customers to leave for good. Luckily, a reliable payment software provider can help you find a viable solution to this issue.

    Akurateco system offers the ability to balance transaction load between different Merchant Identification Numbers through intelligent payment routing technology. Load balancing helps prevent overloading on a single MID with too many transactions, which can lead to delays, processing errors, or increased risk. Further, as high transaction volumes concentrated on a single MID can trigger suspicion from banks or processors, potentially leading to transaction declines, load balancing helps mitigate this risk by distributing the load evenly, thus reducing the likelihood of transaction rejections.

    Payment cascading comes into play if a transaction is declined due to payment processor internal issues. This technology automatically cascades the payment to another MID or acquiring bank to process the transaction successfully within one payment attempt, seamlessly for the customer. By distributing declined transactions between integrated banks and payment providers and processing them successfully, payment cascading technology significantly reduces the rate of declines, becoming a game-changer for high-risk industries. Yet, there is more to it than that.

    Cutting-edge payment software providers like Akurateco offer advanced cascading technology for 3D Secure (3DS) MIDs. In this case, if one MID declines the transaction that requires a 3DS code, it will automatically be cascaded to another one, with a user only re-entering the 3DS password, not their whole payment information from scratch. Ultimately, successful, hassle-free 3DS transaction processing will enhance customers’ payment experience, increasing their return likelihood.

    To explore payment cascading technology in detail, read the article below:

    The Power of Cascading Payments: Boosting Your Revenue Growth

    Poor bank relations

    Bank relations directly impact the operation of a high-risk business, its future growth potential, and the interchange+ and interchange++ fees the company will pay. However, many high-risk merchants struggle with poor bank relations due to their industry specifics, high decline rate, and increased likelihood of fraud. That is another issue that payment software for high-risk industries can assist you with. 

    The best way to ensure improved relations with banks is to avoid sending them potentially declined or fraudulent transactions in the first place. This can be achieved through an efficient combination of payment fraud prevention, routing, and cascading technologies.

    In the Akurateco system, fraudulent transactions are detected and declined before processing via advanced in-house anti-fraud filters and third-party risk-scoring providers like Fraudio, MaxMind, AcuityTec, Sift Science, etc. This approach reduces the number of fraudulent transactions, improving the company’s credibility and trustworthiness in the eyes of the bank.

    To explore payment fraud prevention technology’s possibilities, read the article below:

    Payment Fraud Prevention: Enhancing Online Payment Security with Modern Technologies

    In addition, banks may have internal limitations on processing certain payment types, such as from users whose countries are blocked or payments exceeding a certain amount. If a high-risk company does not use payment routing, such transactions can be sent to banks with restrictions, resulting in declines and compromised bank relations. But, leveraging intelligent payment routing technology, you can set up parameters to route such transactions only to banks that do not have such a limitation, enhancing your approval rate and relations with them. Plus, payment cascading that reduces decline rates will also contribute to your reputation among banks.

    Business Case

    To explore how payment software for high-risk industries can benefit businesses in real life, let’s delve into a recent business case of our Forex client. In this case study, we provide a comprehensive list of the challenges our client faced, implemented solutions, and the results the company achieved in 8 months of the platform’s usage.

    How Akurateco’s Payment Software Cut $420K in Costs for a Forex Client

    Wrapping it up

    High-risk businesses encounter multiple payment challenges tied to the specific nature of their industries on a daily basis. Nevertheless, aligning with a payment software provider offering a platform tailored to the needs of high-risk companies can mitigate them to a minimum. If you are looking for a reliable payment partner that comprehends your unique requirements, feel free to book a Free Demo of Akurateco’s platform and get to know the system firsthand.

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