avoid card payment outage

Mitigating Card Payment Outages by Leveraging a Payments Orchestration Partner

It’s virtually impossible to predict when card payment outages may occur. Payment processing outages are typically a matter of “when,” not “if,” and as the complexity of electronic payment transactions has increased, so too have potential failure points along the transaction flow. Network issues, third-party systems latency, processor outages, and a myriad of other scenarios can all lead to the same result, POS interactions grinding to a halt, leaving frustrated customers and abandoned carts in their wake.

Businesses should consider turning towards offline processing as a convenient backup method to mitigate or eliminate the adverse effects of these card payment outages. Offline processing allows companies to continue to take payments when one or more connections within the transaction flow are unavailable. A payments orchestration partner like OLS can help businesses alleviate the harmful effects of these occurrences by utilizing offline processing. 

How can you manage a payment outage?

 Payment processing outages are inevitable, but merchants can manage these outages by utilizing offline processing. A payments orchestration partner like OLS can help merchants with various offline processing options, including stand-in processing, store and forward, and smart routing of transactions to redundant service providers or processors. 

What is a Card Payment Outage?

For businesses of all sizes, the ability to process credit card payments is essential. Yet, card processing outages can occur without notice and for any number of issues. Some of the most common causes of payment outages include:

  • Network issues
  • Third-party systems latency
  • Processor failures 
  • Power outages
  • Internet service disruptions
  • Hardware malfunctions

No matter the cause, these outages can potentially harm your business. Given the volume of electronic transactions that many companies handle daily, an interruption in processing could result in lost revenues. The experience may impact the perception of your business among customers. 

Why Businesses Need Stand-In Processing

Businesses can mitigate or eliminate the harmful effects of card payment outages by utilizing offline processing. Offline processing options, which include stand-in processing and store and forward, allow merchants to continue to process electronic transactions even while one or more points along the process flow are not available, preventing the standard processing of the transaction.

Consider this scenario: over a 5-day holiday period, one merchant activated 8.9 million gift cards. Of those gift cards, 0.15% needed stand-in processing, accounting for approximately 13,700 activations. Without offline processing, that’s more than 13,000 opportunities for abandoned transactions and frustrated customers. However, utilizing the OLS stand-in process, this outage was invisible to the customers, and more than 60% of the activations were cleared within 10 minutes and all of them were cleared within 15 minutes.  Without stand-in processing, the merchant would have missed out on that revenue. 

Remember that some transaction types are more suitable for stand-in processing, while other transaction types make poor candidates for stand-in. Some of the most suitable transactions for stand-in processing include:

  • Gift Card//SV Pre Auth
  • Gift Card//SV Activation
  • Credit Card Purchase//with dollar limits

Gift cards, in particular, make good candidates for offline processing because they are products that a customer will most likely use in the future. They are often purchased as gifts for someone else, meaning there will be a lapse before the card is redeemed. Conversely, a pay-by-the-minute phone card is generally a poor candidate for offline processing because it is likely to be used immediately, meaning it can increase the risk for the merchant. 

A Payments Orchestration Partner Can Help Businesses Implement Offline Processing Solutions

To better prepare for card payment outages, businesses can work with a payment orchestration partner who can help them navigate the complexities of stand-in processing. For example, companies must ensure that stand-in queues are run in sequence to avoid confusion or errors when the system goes back online. Otherwise, if the transaction is processed improperly or in the wrong order, it can cause an error in the system. 

While one transaction done out of order may seem relatively minor, there are times when merchants may be dealing with extreme events where a large volume of stores and transactions are affected by processing outages. In these cases, merchants may be doing offline processing for hundreds or thousands of transactions, causing real consequences if done incorrectly. 

Too often, businesses don’t understand how their stand-in queues look. OLS understands that merchants need visibility into the stand-in queue, which is why OLS provides merchants with real-time reporting via a complete dashboard. This gives merchants access to key metrics, including: 

  • Transaction velocity
  • Number of transactions still in the queue
  • Dollar exposure of queue

Mitigate Card Payment Outages With OLS Payments

The rising complexity of the payments environment represents an increased risk for merchants with a growing number of potential failure points along the transaction flow. OLS can help businesses by tailoring solutions that allow offline processing, permitting merchants to complete transactions even when one or more points along the process flow are unavailable.

OLS also makes sure that merchants can limit their exposure when it comes to stand-in processing. This includes identifying and setting limits for purchase transactions during stand-in. Various factors, including card type and dollar amount, can limit exposure.

Contact us today to learn how OLS Payments can help you manage your offline processing challenges. 

Key Takeaways

  • Credit card processing outages can occur without notice and for any number of issues. 
  • Offline processing allows businesses to continue to process transactions when they experience a payment processing outage.
  • Businesses should consider turning towards offline processing as a convenient backup method to mitigate or eliminate adverse effects of these card payment outages, 
  • OLS can help businesses understand the complexities of stand-in processing, provide queue visibility, and help them limit exposure and risk.