It is a truth universally acknowledged, that a direct selling company with ambitions of a good fortune, must be in want of an optimized payments strategy. The less acknowledged part of this truth is that payments are ever-changing, complex, and fragmented. The larger your business grows, the more complex payment challenges you will face.
It’s easy to fall in the trap of focusing on an immediate need. A “we’ll cross that bridge when we come to it” mentality can help you solve problems quickly; however, decisions you make today may limit your company’s options tomorrow. Thinking ahead is the first step in implementing payments strategically. Take a minute, grab a notepad and pen, and try to answer the following questions:
- What is the long-term vision and goal for your company?
- Will the payment solution you’re currently using (or considering) still work for your company at your next stage of growth? The stage after that?
- What will it cost to change to another provider if this solution can’t scale with your company? How long will the transition take?
If you struggled to answer these questions, you’re not alone. Most company executives (direct selling or otherwise) aren’t able to provide immediate answers either. However, finding these answers will help you understand how the decisions you make will impact your growth potential.
The 8 components of a strategic payment stack
Payments are not just a necessary aspect of day-to-day operations. They can be a major strategic asset. An optimized payment stack—that utilizes the right partners and technology—will minimize common growth blockers, quickly scale into new global and domestic markets, and empower you to maximize your potential revenue. The following eight components are essential to creating a future-proof payments strategy.
It’s somewhat paradoxical that providing customers with a simple, one-step payment option on the frontend requires multiple complex and fragmented systems on the backend. Trying to manage and maintain payment infrastructure yourself can get very expensive and time consuming. Instead, look for an orchestration platform that connects you, through a single point of integration, to payment tools and services that will help you expand into global markets when you’re ready. It will not only save you time and money, but it will also alleviate frustration.
Many payment gateways lock you into their service by maintaining ownership of your data and tokens. Look for payment orchestration platforms where you maintain control over your data assets. This gives you the freedom to adapt and change your strategy without disruption or the threat of losing customers.
Compliance and security is arguably the most important aspect of your payment stack. Blocking fraud not only protects your customers, but it also protects your bottom line. However, you have to be careful not to block legitimate sales. Statistics show that 25 percent of consumers do not complete a purchase if their initial payment transaction was declined. Look for platforms that help you find the balance between security and customer experience.
Just because a payment stack is functioning does not mean that it is optimized. Look for an orchestration platform that can make your transactions smart. The right technology can dynamically send transactions to the most effective gateways, enhance payment performance, and minimize fees.
Many failed payments are due to issues on the consumer’s end of the transaction (e.g. outdated payment information, credit limits, etc.). You want a payment recovery tool that automates and streamlines communication between you and your customers in order to help recover revenue that would otherwise be lost.
The cold, hard truth is nothing is 100 percent reliable. Servers go down, software gets hacked, and companies go out of business. The best way to minimize damage from unexpected disasters is to secure your data in multiple locations and formats. This allows you to implement new solutions quickly if one aspect of your payments system fails.
Technology is always advancing. You need an orchestration platform that not only allows you to adopt the latest advancements quickly, but also minimizes the development expense of new technology, compliances, and software.
Being locked into a particular service or software impedes your strategic future. Tomorrow is never guaranteed. Even the most educated and thought-out decisions may fall flat due to unforeseen events. The only way to overcome the unknown is ensuring you have multiple options now and in the future.
Finding the right payment service partners
The payments industry is an intricate mess of processes and systems. It requires years of experience in order to create a payment infrastructure with the eight components previously mentioned. Partnering with the right payment service providers will give you the experience you need to design a simplified, scalable, optimized, and competitive payment stack.
Don’t be afraid to ask direct questions to your current or prospective payment service partners. Ask about the specific components in this article. Tell them about your future ambitions and ask how they can help you reach them. If you do not take control of your commerce future, it will end up controlling you. Don’t limit your future potential.
Nexio’s unified payments orchestration platform is designed to make your commerce future strategic—because a strategic future means your options will never be limited by borders or technology. Find out more at nex.io/8-components.