Optimization of Credit Cards Batch Processing

Credit Cards Batch Processing

What are the options for a merchant when a batch of transactions gets declined? How can a business improve transaction approval rates? How can a merchant avoid unnecessary per-transaction processing costs? Why is it preferable to aggregate charges coming from the same merchant on a customer’s bank statement?

The article on credit card batch processing optimization provides answers to these (and other) questions. The article describes several approaches meant to boost transaction approval rates. These approaches are particularly relevant for the types of payment where batch transaction processing is preferable:  recurring billing and bill payment. Credit card batch processing optimization techniques explained in the article are account number aggregation and transaction optimization.

Account number aggregation concept is as follows: if an incoming batch of transactions includes several transactions bearing the same account number, these transactions are united into a single transaction. Firstly, aggregation is done in order to reduce per-transaction processing fees the merchant has to pay. Secondly, aggregation allows to consolidate respective charges on cardholder’s statement.

Account number aggregation reduces the probability of collecting on some accounts. That is why the approach is more frequently used on files containing original (and not repeated) collection attempts.

To ensure higher chances of collecting another credit card batch processing optimization approach is used. It is, sometimes, called transaction optimization or account number optimization. The concept is as follows: if an incoming batch of transactions (which have been declined) includes several transactions bearing the same account number, the transaction with the smallest amount is resubmitted first. If it comes through, all other transactions with this account number can be reattempted. In the case when the smallest-amount transaction doesn’t get approved, no further reattempts for this account number are performed.

Under the second approach, the merchant can avoid unnecessary per-transaction processing costs resulting from pointless resubmissions. Transaction optimization is more frequently used on files, containing previously declined transactions.