Written by our partners at TokenEx.
A Multi-PSP Strategy paired with merchant account optimization can bring significant savings for some businesses.
For many large organizations, credit card processing fees constitute a top-5 expense … one which is incredibly difficult to manage and control. But there are numerous ways to make these expenses more manageable, and finding the right mix specific to your unique business can result in a significant cost reduction.
One approach that can be highly effective for large or complex organizations is to institute a Multi-PSP Strategy: working with more than one Payment Services Provider (PSP) in order to split transaction volume according to the best rates for each transaction type.
While this may not be a good fit for all businesses, it can generate sizable savings when done correctly, and when paired with individual account optimization to better control the various rates and the interchange fees.
Recently, Verisave and TokenEx partnered with Cloud Security Alliance (CSA) to talk about the importance of a multi-PSP strategy and the critical aspects of payment optimization.
John Noltensmeyer, CISO of TokenEx, emphasized the exponential growth in global ecommerce highlighted by Gartner’s report, advocating for strategic payment management over operational perspectives. In the webinar, The Importance of Payment Optimization and a Multi-PSP Strategy, John outlined key recommendations, including refining global payment strategies, managing fraud detection processes, and consolidating payment vendors. The discussion emphasized vendor selection criteria, including productized integrations, architecture models, customer base distributions, payment channel support, geographic coverage, supported payment methods, and overall product suites.
John also talked about the benefits of a multi-PSP strategy, citing redundancy, rate negotiation, and diverse payment options as crucial advantages. Some of the key recommendations for a successful multi-PSP strategy included leveraging independent tokenization providers, managing cardholder data effectively, optimizing transaction routing, and considering network tokens provided by card networks.
Later in the webinar, Jeremy Layton, CEO of Verisave, discussed the importance of a well-optimized Interchange Fee setup within each merchant account. Jeremy also provided some insight into why Interchange Fees are so complicated, how they work, and what is needed to optimize them.
Interchange Fees constitute the largest portion of a merchant’s credit card processing fees, and they ultimately go back to the issuing banks: the banks that originally issued the credit card to the cardholder. These fees, in part, fund cardholder reward programs. Many credit card processing vendors treat Interchange Fees as pass-through fees, and they are widely regarded as non-negotiable portions of the processing fee make-up. However, the truth is much more complex than that. Interchange Fees can be affected and optimized for lower cost, and it’s especially important to manage these well for high-volume or multi-account merchants.
Both John and Jeremy highlighted the importance of staying adaptable to industry changes, ensuring that payment strategies evolve alongside shifting landscapes. They underscored the necessity for businesses to embrace a strategic approach to managing payments to capitalize on opportunities, improve conversion rates, and minimize risks associated with payment processing.
Did you miss the live session? Watch a recording of the webinar to learn more about the complexities of modern payment systems, strategic insights, and recommendations for businesses navigating the dynamic landscape of payment optimization and multi-PSP strategies.
To learn more about TokenEx, Multi-PSP Strategies, and merchant account optimization, contact Verisave today.
Verisave is a third-party cost-reduction firm specializing in merchant accounts and credit card processing fees.
Verisave is not a payment processor, and is not affiliated with any processors, card brands, or banks.
Verisave has more than 20 years of experience optimizing and monitoring the credit card processing industry.