Where do you see yourself in five years? It’s a question many of us ponder but I wonder how many card programme owners hear it from prospective payment processors.
It’s a question that matters. Payment platform contracts are typically multi-year agreements. Make no mistake, any growth ambitions that involve multiple product launches, additional functionality or establishing a presence in new markets, depend on a processor’s ability to bend to your needs without disruption to payments.
Nowadays, card programme owners have access to a seemingly competitive payment market on the issuing side, with a decent range of providers to choose from. But there are pitfalls with this diversity. For example, it’s not uncommon to see head-turning claims about platform uptime with little in the way of case study evidence to back them up. The hook for the unsuspecting is usually a tempting commercial arrangement.
My advice is to take your time and choose an issuer processing partner carefully. Here are three good reasons why:
1: Your business could lose revenue
The most basic requirement of a processor is to be available and capable of processing transactions. But this can be challenging for those operators who are new to the demands of processing high volume card programmes, not fully appreciating the stresses this will place upon their platform. Just think about this: a card issuer who achieves 99% uptime experiences outages totalling 87 hours per year. Can you afford to be offline for this long? Can your customers?
Whether outages last for minutes or hours, they are likely to result in customer pain and cardholder loss of confidence. Not to mention a damaging commercial blow to you through stand-in processing fees and missed interchange revenues.
2: Your reputation amongst cardholders will suffer
Whilst customers hate being disappointed, they absolutely detest being embarrassed. Is there anything more belittling than a transaction being rejected at a supermarket checkout? And what about that infuriating experience of repeatedly trying – and failing – to complete an online purchase? Consumers are unforgiving and if they feel that a card is a source of friction in their retail experience, then expect to be replaced by a more reliable alternative.
3: Your business ambitions will be sapped
The last thing you want when you’re attempting to grow a card portfolio or digital wallet is your team being distracted by poor performance from that fundamental pillar of your operation, the payment processor. Suffering from an intermittent service, whilst trying to manage the cardholder experience and endlessly reviewing your processor’s performance, will pull you away from your ambitions. On top of this, competitors will be targeting your proposition and walking away with your valued customers.
So how do you protect yourself when negotiating a processor contract?
Don’t be afraid to delve and seek guarantees. These are the sorts of critical questions I think should you be asking a prospective payment processing partner:
Firstly, I think it’s essential to understand the SLA. These can be challenging and laborious documents to read but it’s vital that you do – the devil is in the detail. Study the SLA carefully and ensure you understand the implications beyond the obvious starting points of what the platform uptime guarantee is and what kind of response is given to platform problems. Also, check if your provider is offering service credits, which reflects a confidence in their platform.
Secondly, it’s important to have full sight of the platform’s performance record. How has it performed over the past 12 or 24 months and what number of clients is it currently supporting, are two key questions to ask. You’ll also want to know the maximum number of transactions the platform is capable of processing at peak throughput times and what peak volume at present looks like.
The next most important consideration, in my opinion, are platform changes. Ask the prospective processor how they will ensure stability whilst implementing changes and what their test process is prior to any changes. Get them to be upfront with you about any forthcoming significant changes and show you how they intend to mitigate risks to stability.
Finally, don’t be shy about asking to speak to references. Any processor who is confident about their product will not be afraid to put you in touch with its clients. They also won’t mind telling you what their retention rate for the previous 24 months is or explaining any significant losses. When you do make contact with references, get them to vouch for quoted reliability and scalability claims.
And if you sense any pushback against these questions, then make sure this isn’t the only prospective processor you talk to before making a procurement decision.
If you secure the right answers, you should end up with something like this
A robust in-house-built, single integration platform like Marqeta’s.
I perhaps would say that but it’s a fact that we’re consistently delivering beyond 99.99% uptime, efficiencies of scale and common processes to innovators in Europe, the US, Canada and Asia. This is possible because our platform boasts built-in redundancy, disaster recovery and failover. It sits on modern cloud infrastructure and doesn’t require on-site installation. Marqeta’s clients are free to create payment products or services and retain full control over authorisations using Gateway Just-in-Time Funding.
For these reasons, I believe Marqeta is setting the standard for performance in modern card issuing and payment processing. Additionally, our innovation-boosting fully-documented Open APIs and user-friendly instant-issue sandbox technology are empowering fintechs and challenger banks to deliver game-changing products.
Card programmes who join us today can be confident that during the next five years, our technology will support their innovation plans, no matter how ambitious.
If you are looking for a trusted, reliable and forward-thinking modern card issuing platform to assist with your growth aspirations, talk to Marqeta.