Credit card payments involve multiple parties, including credit card schemes like Visa or Mastercard, the Issuer who issued the credit card, and the Acquirer who accepts the credit card payment on behalf of merchants. In certain instances, a distinct Payment Service Provider may also be involved.
Pay. operates as both a Payment Service Provider and a self-acquirer of credit cards, resulting in more efficient transaction handling and increased conversions. By handling credit card transactions in-house, Pay. can ensure better handling and increased conversion rates. Additionally, Pay. utilizes credit card cascading, which means that if a credit card transaction is not accepted by Pay., it is automatically sent to 2nd and 3rd backup acquirers to increase the chances of approval. This process occurs within a fraction of a second and leads to even higher conversion rates.
The term "cascade" refers to a waterfall. Credit card cascading is a method that involves routing a credit card payment through different acquirers to increase the likelihood of success. In case an online payment is not accepted by one acquirer, it will be automatically offered to another acquirer to improve the chances of approval. Each credit card acquirer has its unique systems, processes, and criteria, which may result in the rejection of a payment by one acquirer but approval by another.
The process of cascading is particularly useful in situations where a specific acquirer is difficult to reach or there are issues with the connection between the checkout and the credit card provider's systems. As a result, credit card cascading can lead to a higher conversion rate.
It's important to note that credit card cascading doesn't make fraudulent transactions more likely. If a payment is vulnerable to fraud, it will be declined by all acquirers. Credit card cascading actually aids in preventing technical malfunctions and delays, as well as preventing the unnecessary cancellation of payments.
If, however, fraudulent payments are made using a credit card, a consumer can request a chargeback. This is something entrepreneurs should avoid because it harms their reputation.
Credit card cascading and smart routing enhance the probability of successful online payments: customers may abandon their purchase if a primary means of paying is denied and credit card cascading is not applied. When it is, a payment is presented in multiple locations, and success is more likely to occur.