How Checkout.com unlocks revenue through issuer collaboration

Nothing matters more to us at Checkout.com than payment performance. We analyze every stage of the payment process to see where we can make improvements that drive revenue for our merchants. That includes tackling card issuer decline, which we address through direct human partnerships as well as advanced machine learning technology. 

We understand that merchants generally lack direct communication with issuers (such as banks and other financial institutions) to resolve payment declines and fraud concerns. That’s where we come in. We’re building relationships with issuers around the world as part of our efforts to boost acceptance rates. 

In addition, we support issuers on fraud reduction – you can read more about this, below. Such activity is not common in the world of payments; most payment service providers (PSPs) do not dedicate resources specifically to issuer partnerships. 

The results are significant: we often achieve acceptance rate uplift of between 5% and 45% for a merchant’s traffic with a specific issuer. This figure is the increase in attempted payments which lead to successful revenue capture – it directly translates to more revenue. The additional revenue our issuer partnership team has gained for our merchants is in the millions of dollars.

If you’re curious about how we work for our merchants’ success, this article lifts the lid. We’ll explain how and why we build stronger connections between ourselves, our merchants, and issuers.

Conducting a fact-finding internal investigation 

None of our teams work in isolation. The issuer partnership team works closely with our data analysts and engineers to understand decline patterns in merchant traffic. This ensures we can identify the most relevant factors behind a particular payment challenge. 

Before we approach the issuer, we work together as a team to figure out:

• The impact of the situation (who is affected, and by how much)
• The timeline (when this began, exactly)
• The scope of the challenge (deciding which parameters are relevant)
• Ideas on possible solutions (what we can do and what the issuer could do)

The next step is to arrange a conversation with the issuer in question, making use of our network of existing relationships.

Constructive issuer collaboration

We present the findings of our investigation in a dialogue with the relevant issuer. This can help the issuer to understand how urgent and important the current challenges are. For example, if a certain issuer is experiencing difficulties with certain tokenized payments, we can offer perspective on whether or not similar issuers are facing the same.

Why? It’s extremely important to us that we’re delivering the best possible payment experience to our merchants. Our core value, Customer First, drives us to advocate on our merchants’ behalf as we speak to issuers. We are positive and proactive, presenting potential solutions, and listening to feedback the issuer provides.

Focusing on merchant success

We’re committed to keeping your interests front and center. When we take action, we take into account the issuer’s recommendations as well as your business’s specific goals and priorities. Next steps can involve requests for additional data, specific tweaks to payment request submissions, or other options.

Which issuer decline reasons do we collaborate on?

There’s a surprisingly wide range of potential issues that can crop up with issuer acceptance – too many to detail here. However, we’d like to share some of the main ways in which we resolve rejected payment authorization requests by collaborating with the issuer and merchant.

Payment data

Transaction requests can contain many different data fields. And issuers usually have a preference of which combination of data fields they want to see. You can imagine the complexity is too much for most merchants to spend time on. Luckily we’re experts at keeping track of everyone’s expectations. 

Sometimes we discover the issuer wants to see the customer’s email address or their CVV, for example. Then we can inform our merchants of the need to include that data for the relevant transaction types, and generate an acceptance rate uplift. We make it a priority to assist merchants improving payment request data. This strengthens the quality of fraud detection, and reduces false positives, as well as increasing payment capture rates. In one instance, we advised a fintech merchant to make a change to their integration which would amend the way the CVV data was sent. Once they did so, their acceptance rates improved by 1.2%.

We highlighted how changing your payment data collection can increase acceptance rates in the third chapter of our guide 7 ways to boost payments performance. Check out the full guide to learn more:

Transaction type

An issuer may decline certain payment requests because it doesn’t support the transaction type. For example, we identified an issuer in the Asia Pacific region which did not support incremental authorisations. Working with the issuer to resolve this, we achieved a 19.05% acceptance rate uplift for one of our global merchants for that issuer. 

Another example is when a member of our team noticed a problem with account funding transactions (AFTs) at a particular issuer branch in Europe. This was causing difficulties for a fintech merchant, so we engaged the issuer to see if we could solve the puzzle. Thanks to the collaboration of the issuing partner, the merchant saw a 42% acceptance rate increase with this issuer.

Tokenized payments

Card schemes issue mandates on all sorts of payment protocols, but a major theme in recent years is the push towards tokenization. Sometimes we find certain issuers have scope to improve token approval rates and improve their lifecycle management, leading to false declines on tokenized payments. When this happens, we work with issuers to implement technological updates. For instance, we saw success with acceptance rate uplift in MENA last year, thanks to issuer collaboration on tokenization.

Blocking fraud

Issuers can be liable for fraudulent payments if the cardholder disputes a payment authorization. For that reason, it’s in the issuer’s interests to be cautious about accepting payments which seem suspicious. 

When our issuer partnership team notices a sudden or drastic drop in acceptance rates, this can indicate a block due to suspected fraud. At this point, we would open dialogue with the issuer’s fraud team to see what the reasons are for suspecting fraudulent activity. From there, we can work towards a resolution that benefits all parties.

Sometimes issuers’ fraud detection technology is not always optimized, and can result in false declines. We partner with issuers to fine-tune fraud prevention efforts to ensure fraud is minimal and well managed. This improves trust between all parties. In addition, responsibly adjusting fraud rules for one of our merchants recently resulted in an up to 20% acceptance rate uplift with an issuer. 

Sometimes the identification of fraud is legitimate, and we collaborated on an investigation into a rogue merchant. This helps to keep businesses, financial services providers, and cardholders safe from scams and monetary loss.

ACS declines

The Access Control Server is the 3DS authentication technology which an issuer uses to ensure a payment request is valid. Issuers typically use a local ACS, and sometimes there’s only one covering a large geographical region. Occasionally, the ACS presents challenges in payment acceptance. This has the potential to affect several issuers. When this happens, we’ll reach out to the ACS, as well as affected issuers to see how we can resolve the roadblocks together.

Read more: How and when to retry SCA-related soft-declined transactions 

Merchant blocks

Occasionally, an issuer will block a merchant’s traffic due to a range of reasons, such as the merchant’s line of business, previous transaction history, concerns over fraud, or simply because the merchant doesn’t meet the issuer’s requirements. In a situation like this, we are the go-between that ensures the merchant and issuer can process payments again.

For example, we helped a gaming merchant in Sweden overcome an issuer block and achieve 70% acceptance rate uplift with that issuer. To accomplish this, we told the merchant about the additional information the issuer needed to meet its whitelisting criteria.

The network effect: Scaling improvements for our merchants

The way we approach issuer partnership is to achieve a win-win-win scenario, where all parties benefit from the outcomes of investigations. When we uncover beneficial payment traffic improvements, we can strategically apply these across our network. This ensures all of our merchants and issuer partners can benefit from individual acceptance rate investigations.