By Garth Bevan
Global expansion goals necessitate reducing payment provider outages, boosting revenue by increasing authorization approval rates and increasing market penetration by offering local payment methods in key areas. Flexible access to the world’s payment networks is required to safely achieve that expansion. Payment Switch is a self-contained entity that permits communication between different service providers. To process payments, the payment gateway communicates directly with the switch.
Payment Switch has developed a close relationship with the businesses in today’s developing card-based payment sector for a variety of reasons. It facilitates the processing of real payments between providers by accepting payment requests, determining which providers it needs to work with, formatting the message for that provider and sending it to them, receiving a response, changing the response to a generic format, and returning the response to the caller.
Benefits Of A Payment Switch
- Processing Cost Service
Processor neutrality: Merchants have the most choice when it comes to analyzing their payment processing partnerships because they are separated from the POS and the issuer.
Eliminating the middleman: Some businesses employ a middleman processor or a payment gateway to cut costs. Using a payment switch to route transactions directly to processing endpoints can avoid intermediary processing arrangements and associated processing costs.
Batch settlement: By merging settlement records into a single settlement file at the payment switch level before transmission to the processor, merchants adopting store-based batch settlement can reduce settlement processing costs.
Consolidating multiple channels: Businesses frequently employ various payment systems and processors across their transaction channels, such as retail, restaurant, gasoline, e-commerce, catalogue. By unifying these channels through a payment switch and transferring all transactions to the same processor, these businesses can benefit from bulk discounts.
- Interchange savings
Intelligent PIN prompting: Payment switches enable businesses to embrace PIN debit, and merchants can maximize conversion of high interchange credit/signature debit transactions to lower-interchange PIN debit transactions. PIN debit transactions can have interchange rates that are up to 50% lower than credit/signature debit purchases.
Specification changes: Processors and card associations make changes to their payment processing specifications on a regular basis. From the POS terminal, Payment Switch makes this apparent.
- Revenue Generation Opportunities
Accepting its consumers’ payment choices, adopting a new payment option, and floating a merchant-branded gift/prepaid card presents many revenue potentials.
- Administrative Efficiencies
Centralised operating: A payment switch allows a merchant to centralize the entire settlement process, removing the burden of batch settlement and the related reconciliation problems from in-store workers.
Integrated POS: Without integration, the card information is entered twice at the payment terminal once via a card swipe and again manually into the POS system. A payment switch connects payment terminals to point-of-sale systems, removing the need for double-entry transactions.
To Conclude
The main reason for a payment switch is that merchants are still subject to acquirer failures, despite all of their technological redundancies. Having numerous acquirers serving their core markets might help merchants avoid losing sales.
BPCBT assists you in choosing the right payment switch and ensures that the payment switch routes and processes of all payments are in real-time between the point of client interaction, such as ATMs and payment terminals, and the bank’s processing system.
