There’s a lot of money in garbage!

That’s the old saying… there’s a lot of money in the things we throw away. This is why every consumer facing business needs a robust reauthorization strategy. 

Maybe like a lot of Merchants you don’t have the people, time or data you need to sift through the garbage to find the opportunities within your declined transactions. If so, you’re likely unknowingly throwing away A LOT of money. Fortunately, there are services that can help you make the most out of what you’re discarding. 

In general, there are three types of services you can leverage to settle more of your declined transactions. (We call this… “Increasing Your Yield”).

1. Decline Salvage Services – These services rely on extremely large transactional datasets to develop insights and heuristics to determine the optimal time (day, hour, minute) to re-attempt your transactions. These services, in general, don’t provide additional payment processing avenues, but instead, try to optimize your current processors/MIDs. You can find standalone companies that provide decline salvage services. In addition, many of the larger commerce engines have decline salvage logic built into their platforms… either their own or a white-labeled version of a 3^rd party service.
2. Factoring – While factoring has been around for a long time, it seems to have found new life recently in the world of reauthorizations. Factoring is different from standard decline salvage services in that, with factoring, you are selling your declined transactions to a third party. They are now the merchant of record for your transactions. This third party will then attempt to settle the transactions through their own processing venues/MIDs on a revenue share basis. In addition, factoring companies usually append additional data to your declines to boost auth rates.
3. Payment Orchestration – Payment orchestration, while not specifically designed to manage declined transactions, should still be a part of your reauthorization strategy. Payment orchestration can sometimes help by getting the FIRST attempt and subsequent reattempts to settle, reducing the pile of declines you’ll have to work. Besides applying general statistical modeling to the problem, payment orchestration platforms use multiple processing venues and tools like MID cascading to increase overall yields.

Each one of these services comes with differing costs/benefits and none will be a silver bullet for your declined transactions. But finding an additional three to five percentage points of margin can make a difference in the success of a campaign.

Time to get into that dumpster!

September 26, 2024