By Whitney Troxel
Many payment facilitators — like Shopify and Stripe — relied heavily on Silicon Valley Bank (SVB) as a banking partner. When the news hit that SVB was closing its doors, these payment facilitators were left scrambling. Fortunately, they have been given a second chance. But not every business gets the same opportunity.
No one likes to face a sudden and unexpected setback, but it provides an opportunity to learn, grow, and be better prepared for the future. In the wake of the SVB crisis, we’d like to explore eight foundational components of a payments strategy that will help you weather any storm.
1. Connectivity
While providing customers with an effortless, single-step payment method on the frontend may appear to require little effort, it is only possible through numerous intricate and disconnected systems behind the scenes. Making sure you have the right tools and software for each step of a payment transaction (and ensuring those tools are compatible with each other) is expensive and time consuming. This is why most businesses utilize a payment processor or platform that handles the entire payment lifecycle.
However, not all payment platforms are created equal. You want a payment platform that connects you — via a single point of integration — to multiple payment tools and services. This will help you minimize common growth blockers, quickly scale into new global and domestic markets, and empower you to maximize your potential revenue.
2. Control
Numerous payment processors and gateways trap you into using their services by maintaining ownership of your data and tokens — which makes it difficult to transition away from them. Instead, you should seek out payment platforms that give you ownership of your data assets. This offers you the freedom to adjust and modify your strategy with no interruption or fear of losing customers.
3. Security
Security and compliance is the paramount priority when dealing with payment processing. Not only are businesses legally obligated to comply with standards, but staying compliant also shows customers that the business is trustworthy. This sets companies up for long-term success.
However, you must ensure that legitimate transactions aren’t blocked. Studies have suggested that 25% of customers won’t continue if their first attempt at a purchase was denied. Finding an optimal balance between customer experience and safety should be one of your top targets. Make sure to search for platforms which guarantee both.
4. Optimization
A functioning payment process is not the same as an optimized payment process. You need the right technology to ensure maximum financial performance. Smart payments platforms can instantly route transactions through the most beneficial gateways, improve transaction success rates, and decrease processing fees. Utilizing such a platform will make your business more efficient and cost-effective than ever before!
5. Recovery
Payment failure is frequently due to user error. To ensure you don’t lose out on potential revenue, it’s essential that your payment platform has a reliable tool for recovering payments. Something as simple as automated communication about account information to your customers can recover substantial amounts of revenue that would have been lost.
6. Redundancy
The cold, hard truth is nothing is 100 percent reliable. Servers can shut down, software can be hacked, and businesses may close their doors unexpectedly (as we saw with SVB). The best way to mitigate damage from unforeseen disasters is to secure your data in multiple locations and formats. This provides superior security against loss or corruption of information and you’re able to easily transition into a new system if one facet of your payment setup begins malfunctioning.
7. Adaptability
To keep up with the breakneck speed of technological advancement, you’ll need a payment platform that not only permits rapid adoption of new technology, but also reduces the cost and effort required to develop software and meet compliance standards. Doing so will streamline the entire process and allow you to quickly capitalize on new opportunities.
8. Optionality
Knowing you are stuck with a certain service or platform puts the future of your payments strategy in jeopardy. As tomorrow is uncertain, even the most carefully considered decisions may fall short when faced with unexpected circumstances. To ensure success under any situation, it’s essential to make sure that you have a variety of processor and gateway options available both now and for the future.
Develop your future-proof payment strategy
The SVB crisis revealed the importance of having a payments strategy that is prepared to handle any obstacles. After all, it’s not IF but WHEN that matters most when it comes to the security of your sales and customers. Having a strategy that encompasses the components listed above can provide businesses with the ability to remain resilient and position them for success no matter what circumstances they might face.
Make Nexio your payments partner
When you choose Nexio, you gain more than just a technology platform to facilitate payments. You also join forces with an experienced team of professionals who are dedicated to helping your business reach its goals. Our experts will be by your side throughout the process, providing advice and support on when it is best for you to make changes in order to optimize operations and maximize value from our tools. Contact us today to start developing your payments strategy.