If we have learned anything from the turmoil in the payments industry, it is the importance of separating the payment processing from the acquiring bank. Although this may not seem like the ideal time to think of payment processing setup, recent events have forced airlines to prioritize strategies and review the situation with acquirers. To minimize potential risks, an acquirer agnostic approach may well be worth a second look when implementing a payments strategy.
Advantages of following an acquirer agnostic strategy
When considering a payments strategy, an acquirer agnostic solution that connects with local and global acquirers can ensure flexibility, help retain control and facilitate significant cost reductions that an acquirer specific solution cannot offer.
There are many reasons to consider a multi acquirer approach. These include the need to avoid business dependence, the ongoing maintenance of favorable terms and the need to secure access to the appropriate lines of credit, among others. The following are the key drivers to consider a multi acquirer strategy:
Maintaining one single acquirer can create bottlenecks to be prevented when possible. Following an acquirer agnostic strategy provides freedom and avoids the constraints of being tied to one single financial institution, which is especially important after having seen the results of recent events.
The ability to switch acquirers provides the opportunity to better negotiate a competitive cost of acceptance. We calculate that the cost savings could add up to 50 basis points (0.5%) on transaction fees, resulting in higher value from each ticket sold.
A multi acquirer strategy will also enable to load-balance the credit to each acquiring bank, allowing to free-up cash when the credit line reaches the limit with one specific entity.
Higher acceptance rates
Smart routing will enable to route a transaction to a specific acquirer based on pre-defined business rules. This feature will help reach the highest acceptance rates by routing the transaction to the acquiring bank that is more likely to approve it. Alternatively, having the option to reach the issuer directly removes intermediaries and creates a cleaner and faster process, which results in higher acceptance rates and a better customer experience.
Choosing a Payment Gateway
When implementing a multi acquirer strategy, the first thing to consider is the payment gateway’s capabilities. An independent payment gateway can act as a single connection to multiple acquirers, FOPs and provide further independence.
It’s also important to consider pros and cons of working with more than one single provider. Relying on more than one payment platform provides even more flexibility to shift the transactions to a different partner as needed, for example, when the volume of transactions is high enough or to avoid the risk of a payment gateway going down.
On the other hand, having more than one payment gateway can make the reconciliation process more complicated and time consuming. It’s important that a payment solution covers reconciliation from sale to banked at a transaction level.
As evidenced by the recent demise of a major payments processor, it’s crucial to have the possibility to move to a new payment system as quickly and smoothly as possible. It is also important to take a holistic approach to effectively address the whole systems flow and not only the front-end or back-end needs. For this, an industry specific payment provider would be essential.
By combining the payment gateway processing with the credit card billing, reconciliation and accounting interface functions in one platform, airlines will have much greater visibility and control of each payment.
Accelya Payment Gateway is a payment gateway created specifically for the airline industry, combining the payment acceptance expertise of Mastercard Payment Gateway Services with Accelya’s airline back office know-how. An acquirer agnostic platform linked to systems and third parties and connecting front and back end. Our trusted partner Mastercard is at the forefront of evolving data compliance and security regulations in the payments ecosystem and the same gets reflected in their platform, with the highest data security standards and system availability.
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