Resilience is Key as Payments Acceptance becomes Mission-Critical

These changes in consumer payment preferences and behaviours mean that accepting digital payments has become a mission-critical service for all retailers, as they would be unable to trade if anything fails anywhere within the payment processing infrastructure. This is why enterprise merchants are increasingly focused on improving the levels of resilience to address connectivity problems, system issues, hardware failures, software bugs, cyber-attacks or other limitations that could prevent successful transaction handling.

If a retailer is unable to accept a digital payment, it can result in revenue loss, customer dissatisfaction, damage to brand reputation, and potentially regulatory intervention – which is why resilience is so crucial.

How to increase resilience?

A multilayered strategy should be taken to increase resilience and protect the business from any transaction processing downtime. This involved building resilience into each individual product and layer, while also considering it from an end-to-end perspective. Resilience is achieved by incorporating multiple communication networks, dual acquirers, active-active gateways, smart transaction flows and routing, payment orchestration concepts, and accepting alternative payment methods.

Starting at the POS acceptance device

High availability starts by selecting POS models that have been manufactured to high-quality standards, incorporating reliable processors and components, and capable of communicating via store telecommunication links or fast wireless data networks. Equally the terminal app should also be designed to support alternative processing flows. Battery-powered wireless payment terminals add an extra layer of resilience in the event of a power cut or broadband connection failures. 

Introducing ‘Tap on Mobile’ devices

One new way for merchants to enhance resilience is by adding a secure ‘Tap on Mobile’ (SoftPOS) payment app to Tablets and Smartphones already deployed in-store. This provides a cost-effective back-up POS terminal, allowing payments still to be accepted even if the main terminal is down, avoiding long wait times for an engineer visit or replacement device. When well-designed, this new acceptance option can address communication, gateway or acquirer failure scenarios.

Store-level resilience

Connectivity issues are often the primary cause of processing failures. Higher resilience can be achieved by using dual networks and multiple communication providers. While dedicated lines deliver higher reliability, they come at a higher a cost. Uninterrupted Power Supplies (UPS) and generators are valuable for boosting resilience, especially if trading in locations that experience regular electricity power-cuts.

Each sales channel (till, self-checkout, queue busting, customer service desk) can be designed to use different communication methods and processing paths, ensuring that a single failure won’t disable all in-store payment options.

Deferred Authorisation

To address processing disruptions, international payment brands have expanded the option to delay card authorisation by up to 24 hours for more merchant category codes. This requires an indicator flag within the authorisation message, but merchants must agree to accepting the increased risk of trading off-line. Changes to operational procedures may also be needed such as enforcing Chip & PIN transactions rather than the use of contactless.

Resilient Gateway

Gateway providers are essential for ensuring uninterrupted transaction processing. This can be achieved through dual data centres operating in an active-active architecture with auto redundancy built in. Gateways also provide connectivity to multiple acquirers, and automated smart routing logic can step-in when needed.

Payments Orchestration

Adding a payment orchestration layer is another effective way to improve eCommerce payment processing resilience. This layer brings more sophisticated payment processing logic and enhanced smart routing and retry options.  Payment orchestration simplifies the use of multiple acquirers as these links are always ready to receive transactions. 

Alternative Payment Methods (APMs)

Customers often can pay through a range of payment methods and so supporting alternative payment options adds greater resilience in the event of disruption to Visa/Mastercard card acceptance. APMs, including Dynamic Currency Conversion, can be processed by different processors or acquirers, such as Worldline, providing an alternative processing route if the connection to the primary acquirer fails. Bank transfer schemes offer additional resilience options to European retailers, and Open Banking will extend these options to UK retailers.

Strong Customer Authentication (SCA)

Due to recent regulations, customers must now be authenticated in addition to having their funds authorised. From an in-store perspective this relies on the acceptance equipment correctly responding to the issuer’s response to a contactless authorisation request and forcing a Chip and PIN transaction when the SCA contactless thresholds have been reached. Most SCA issues come with eCommerce transactions and that is why a new resilience flag (indicator) has been defined within the EMV 3DS protocols to prevent transactions from being unnecessarily declined when an unexpected processing issue occurs. Retailers are encouraged to ensure their gateway and acquirer support this resilience capability.

Cash as the ultimate fallback

If all digital payments are unavailable, cash acceptance remains the final option to prevent the sale being lost. Retailers should be aware of the locations of nearby ATMs, and some may want to consider contracting with an independent ATM deployer for a cash dispenser to be installed at their outlet.

As discussed, there are many ways to enhance payment acceptance resilience. However, resilience does not just occur automatically; it needs to be considered at an architectural level and built-in at every stage of the transaction processing flow. A multi layered, end-to-end approach is essential. More attention and investment are required in order to protect the business from revenue loss, customer dissatisfaction, and damage to brand reputation. Therefore, partnering with a merchant services provider that has the experience, know-how and product capabilities you need is crucial to ensuring your business is protected by maximum resilience options.

Sources:

1. UK.Finance- Summary UK Payments Market 2024
2. Link – Cash usage report