If you’re looking for a payment processing solution, you probably want to find the best one, which uses the latest technologies. Many payment processing companies use Smart Routing for transactions and mention it as one the benefits for businesses. But do you really understand what is Smart Routing technology and why it so important?
First of all, we have to determine, what is Smart Routing? Smart Routing is a technology, which helps to optimize the transaction flow by routing payments to the most suitable acquirer.
4 ways your business can benefit from Smart Routing Technology:
1) Lower costs
Smart Routing technology sends a transaction to the most suitable acquiring bank depending on the currency of the payment and the country, where the card was emitted. This lowers the cost of payment. For example, your company is based in the UK and you accept payments in pounds. But your customer lives in the Czech Republic and his currency is the Czech koruna. This technology will route the payment for your goods to the Czech acquirer to lower the transaction fee. And this is one way of how businesses can benefit from Smart Routing Technology.
2) Loyalty of customers
There is one more issue connected with online processing – transaction failure. One acquirer can reject payments for a special group of products or services. But another one has already accepted several transactions. Based on prior transactions this technology will route, for example, the payment for natural oils to the acquirer, which will accept it with the most probability. It will increase the approval rate and the loyalty of customers. The latest research states that 42% of customers would stop purchases if their payments were to be declined. This means that your customers are not likely to return. The Smart Routing technology can help lower the transaction failure and, as a result, grow the loyalty of your customers. This is another way of how your business can benefit from this technology. According to Marketing Metrics, “The probability of selling to an existing customer is 60 to 70 percent. The probability of selling to a new prospect is 5 to 20 percent.” That’s why businesses should pay attention to growing the loyalty.
3) More profit
The higher the approval rate, the more profit you will get. Online payments are declined nearly four times more than payments made though POS-terminals. This means that online businesses should pay attention to payment gateway technologies 4 times more carefully than others to keep their profit at a high level. Smart Routing can help to reduce transaction failures and help your business grow sales.
4) Higher monthly sales
As a result, from all the mentioned factors, your business can grow your monthly sales as well. Loyal customers will come to you more often. Increasing customer retention rates by 5% increases profits by 25% to 95%. That’s why any investment in customer retention, including improvements with a payment system, will pay off. Another important reason to pay attention to loyal customers is that they will recommend your company to others. About 30% of consumers refer after a positive experience. Why is it important for your business? Because people trust the recommendations of their friends. That’s why the lifetime value for new referral customer is 16% higher than non-referrals.
Payment processing is usually taken for granted as something that was once implemented and doesn’t need any further updates. But in fact, a high transaction failure on your website may cause you a significant decrease in the company revenue. Add to this a high churn rate and your company will end up with profit losses. UniversePay uses Smart Routing Technology for payment processing and can help you implement it on your website. Just send us an application and our specialists will contact you.