The research-backed advantages of using multiple payment gateways

As 2019 begins to wind down, and businesses plan for 2020, using multiple payment gateways should be on the list of planned payments infrastructure improvements for any company with plans to expand.

Innovative companies constantly push the boundaries of their infrastructure - including payment gateways - to expand into new geographies, markets, and business lines. Yet, the demands they place on their business are often constrained by the limitations of their infrastructures.

Some payments solutions may adapt well to the specific needs of merchants and marketplaces. But what happens when it’s time for a merchant to expand? Our Accelerating Revenue eBook explores how innovative, fast-growing companies rely on multiple payment gateways to support their unique and changing payments requirements.

Merchants and marketplaces that need to transact in new geographies, or in different currencies, may find that their current gateway limits their expansion. By offering their new customers a chance to pay in their local currency, merchants can ensure their expansion will be off to a good start.

Payments influence a great customer experience

It’s no secret: fast-growing companies succeed by delivering a great customer experience. A vital part of that customer experience is the process of accepting payments. Declined transactions and long latency times for approvals can damage goodwill and reduce customers lifetime value.

Plus, the inability to accept payments in the way customers demand — or in the markets that customers are in — can lead to long latency times for approvals, damaging the customer experience.

To deliver a great customer experience requires improving success rates, cutting latency, and ensuring that customers can pay as they prefer. As well see in this eBook, that isnt always simple with a single provider.

For example: when there are bursts of transactions, like purchasing tickets when they go on sale, it’s important to have alternative gateways available if a single gateway can’t handle the volume of sales.

Key business advantages of using multiple payment gateways

As a result of these challenges, fast-growth companies connect their applications to multiple gateways to facilitate both business and technical innovation. Let’s explore some key advantages of using multiple payment gateways. We explore these and the data behind our conclusions, in detail in our eBook.

Advantage 1: Business innovation

Ecommerce continues to grow at a staggering pace. As this growth rises, more and more businesses will grow into new markets and build new business models.The flexibility to connect into multiple payment services lets development teams focus on building these new, innovative ecommerce experiences.

Advantage 2: Increased geographic coverage

The need for more than one gateway is clear when your business expands abroad. As you sell across countries, youll notice varying levels of support. Some gateways may cite support for a particular country, but their support may cover only certain payment methods and currencies. Adopting a multi-gateway strategy enables your payments to grow globally, with less friction.

Advantage 3: Business flexibility

As you work with a gateway in a particular region, you may discover that fees, contract requirements, and other business issues degrade the value you get from your relationship. By working with multiple gateways, you can readily shift your transactions to another partner as needed.

What does the data tell us about the advantages of using multiple payment gateways?

At Spreedly, we collect rich data on the success of transactions, payment methods, and gateways. We use the insight generated from that data to help our customers provide an even better customer experience. Our data science team analysed tens of millions of transactions processed in conjunction with the Spreedly platform over a six month period — and compiled it in this engaging eBook.

First, we looked at general attributes of the data collected. 30% of the analysed transactions were authorisations, while 70% were purchases. 90% of the transactions were domestic purchases and authorisations combined, with remaining 10%, international across all currencies. To be clear, a cardholder in Argentina transacting in Argentine Pesos would be classified as a domestic transaction for our analysis. Included in the assessment were a total of 114 gateways and 106 currencies, so a strong cross-section of global transactions. Across all of these transactions, we wanted to assess how well multiple gateways help to drive lower decline rates and latency. To do so, our team compared the metrics for decline rates and latency across:

Different currencies;

International versus domestic transactions;

Authorisation and Purchase transaction types;

Different gateways in various geographies.

As part of the analysis, we assessed the results to determine confidence levels. Statistically speaking, we are reporting these results in a 1% significance level. These confidence levels are for our comparison of popular gateways with those with the lowest declines.

To see the conclusions of our analysis, plus expanded versions of the key business advantages of using multiple payment gateways, download the eBook.

About Peter Mollins

Peter Mollins is Spreedlys vice president of marketing and success. He has over 20 years of experience building go-to-market teams at fast-growth, venture backed B2B software companies. He holds a masters in international management from Thunderbird.

About Spreedly

Build best-in-market payment systems by connecting to any payment service. Enable, optimise, and analyse online revenue with Spreedly’s flexible payments platform.