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Discover top business tactics for boosting your authorization rates capabilities, so you can meet—and maybe even exceed—your business goals.
In the ever-competitive realm of commerce, one metric stands out amongst merchants: improving authorization rates. However, the pursuit of maximizing revenue sometimes leads businesses down the path of default strategies that may secure the bottom line, but ultimately limit the potential for authorization rate optimization.
Businesses who focus on optimizing authorization rates may better adapt to changing economic environments, meet customers evolving preferences, and more.
In the eBook Winning at checkout: Help improve your authorization ratets with PayPal, you’ll find four strategies merchants can consider to help boost revenue and customer trust. Find tips such as:
In the world of commerce, not all businesses or industries are created equal. Transaction amounts of a few dollars will be seen as a very different risk to ones in the hundreds or even thousands. Every business aims to streamline sales, yet specific factors fluctuate across industries. For instance, a couch company might have a lower tolerance for chargebacks, whereas a fashion retailer might tolerate a slightly higher rate.
Surprisingly, many businesses overlook the impact of industry-specific payment
strategies on authorization rates. Currently, only 32% tailor their strategy to their specific industry’s needs potentially missing valuable insights1.
PayPal’s relationship with issuers and card brands across more than 200 markets means we have deep insight into payment trends, industry-specific factors and customer needs. PayPal also offers custom configurations that match your business’s specific payment needs.
Take declines, for example. By identifying the source of the decline, such as insufficient funds or administrative declines, you can offer helpful information to the customer, or alternative payment methods. Armed with this information, you can make informed decision that help you reduce declines and improve the checkout process.
An authorization might fail for any number of reasons, but not all of them necessarily mean the transaction will ultimately fail. A declined transaction may result in an unhappy customer and abandoned carts. There is plenty of opportunity to use routing optimization and retry logic to recover a transaction, helping complete more orders and get ahead of the competition.
Learning powers, a new era of customer insights and can be leveraged to help optimize payment processing—particularly to determine how and when to retry failed transactions. Retrying transaction too many times can drive up operating costs. PayPal’s retry logic means PayPal enterprise business customers can intelligently determine which transactions to retry and way to retries, such as through a wide range of alternative acquiring networks, e.g. Skip AVS, FPAN, and more. The means a second chance for a successfully complete the transaction, helping to avoid lost opportunities.
Integrating machine learning into our retry strategies significantly enhances the potential for successful transactions. Using PayPal's transaction routing across global acquirers and networks ensures a quick, reliable, and cost-effective method for completing sales. This intelligent routing optimization, empowered by machine learning, can further boosts transaction recovery rates, helping to maximize your sales potential.
Today’s market leaders may be more likely than others to use routing optimization and retry logic strategies. By optimizing routing and retry logic, you can send each transaction to the best payment gateway, enhancing authorization rates and avoiding unnecessary fees.
Businesses look to offer secure payment transactions that drive authorization rates, minimize fraud, reduce friction for customers, and help maximize sales. Network tokenization helps brands move away from less-secure account-based methods to a more secure way to share data in a centralized vault.
Network tokenization can be a powerful tool to help mitigate fraud and risk and drive authorization performance. Network tokens can be continually updated. When card data changes between use, for example, if a credentials expire, or the credit card is lost or stolen, the token can still be used and is updated in real time. Which means transactions are less likely to be declined.
Network tokenization is a way of improving protection against fraud while also removing friction for the customer when they come to pay. Issuers may also be more likely to approve transactions using network tokens because they consider them to be more secure.
One way to combat fraudsters is to leverage network tokenization. PayPal has been one of the early Network Token Service Providers. 92% of Braintree users say that Braintree’s network tokenization feature has met or exceeded their expectations2. This means we can innovate and work with global card networks to progress the technology and boost our merchants’ authorization rates1.
Nearly half of all respondents to our survey (48%) agreed they used network tokenization to improve their authorization rates1.
While businesses are always keen to make checkout as simple and seamless as possible, the customer may be willing to complete a few extra steps if it means their transaction is secure. Customers are increasingly valuing authentication as an important part of the payments process.
Globally, emerging security requirements are shaping new standards and tools, prompting the evolution of the authentication process. This progression extends from conventional one-time password requests to more resilient authentication solutions. Notably, intelligent strong customer authentication (SCA) is gaining widespread recognition as a means of validating legitimate transactions.
Amidst this landscape, the prominence of 3D Secure 2 as an authentication tool is undeniable, yet it's merely one among several options. In this dynamic, payment service providers (PSPs) play a pivotal role, guiding businesses in selecting the most fitting authentication approach for a variety of transactions.
Furthermore, PSPs can harness the power of machine learning to discern reliable customers from those needing more stringent authentication protocols. This strategy contributes significantly to businesses refining their authentication pathways, thereby constructing a robust and effective "authentication system."
PayPal enterprise business customers benefit from significant experience in authorization strategies and a wealth of rich data. This information fuels machine learning technology and real-time risk assessments, bolstering the process of authenticating legitimate transactions and helping to maintain transaction security.
PayPal Braintree is like your all-in-one payment partner, crafted with your business's growth in mind. Our toolbox of global commerce solutions help ensure smooth and hassle-free checkout experiences on a big scale, fine-tuned with insights from PayPal’s network.
The trust that both businesses and regular folks put in our brand says a lot about how reliable we are.
Beyond just authorization rates and our popular payments wallet, PayPal offers a full range of payment processing services that cover everything from end-to-end. We've polished these services to make sure every bit of your online journey is optimized.
We're here to make payment processing easy, from refining tools to tapping into PayPal's worldwide connections, PayPal Braintree is all set to boost your business with a strong, connected processing setup. To give your customers a top-notch experience on the front, you need a backend that's just right for your needs.
And we're all about making things smart and secure. Our tools are carefully designed to make sure your authorization rates shine. They'll keep card info up to date and even use machine learning to intelligently give declined transactions a second shot, so you can recover more of them.
We take fraud seriously. Our kit of fraud tools—which you can customize to fit your needs—comes with innovative features like Fraud Protection and Dispute Automation, all geared toward helping you keep your business safe and sound.
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