Orchestrator and PSP: complementarity accelerated by BIN Routing

Until a few years ago, payment orchestration was a new, little-known profession. Today, it has become a key subject at the heart of the concerns of retailers and e-retailers.
The observation is clear: more than 60% of merchants choose to connect to several payment providers.

It has become strategic for e-retailers to be supported by a payment orchestrator in order to:

• Improve the performance of your payment process
• Offer a better shopping experience to your customers
• Optimize your costs related to payment solutions
• Support your growth

The various Payment Service Providers (PSPs) have understood this and are making significant transformations to meet the needs of merchants and offer efficient solutions, in particular through BIN Routing.

Naturally, BIN routing is part of the orchestration strategy to optimize the purchasing process and accelerate growth.

The concept of BIN Routing can be applied in the context of in-store and online payment, this article focuses on online payment.

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1. What is BIN routing?

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To understand its definition and importance in the complex world of payments, let's start by breaking this term down.

The term “BIN” refers to the first six digits of a payment card, also known as a Bank Identification Number. Each set of six numbers is unique and identifies the bank issuing the card as well as the type of card (credit, debit, prepaid, etc.). These numbers are the key to understanding where a card comes from and how it should be handled during a transaction.

Now, “routing” refers to the path a transaction takes when it is processed. In the context of online payments, this means determining which payment provider should handle the transaction and with which acquirer.

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So what happens when you combine these two elements?

BIN routing consists of using the first six digits of a card to determine the payment provider best suited to process the transaction.

But why is it so important?

When your customer makes their purchase and finalizes it by clicking on the pay button. In the background, your transaction needs to be sent to the right payment provider to be processed. That's where BIN routing comes in.

Using the first six digits of your card, the BIN routing system identifies the bank issuing the card and the type of card used and will be able to determine the payment provider that offers the best conditions to process the transaction according to criteria that you have predefined. This can include factors such as acceptance performance, transaction cost, trade agreements, and even geographic considerations.

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The result?

A faster, smoother transaction for customers and more economical for retailers. BIN routing makes it possible to optimize each transaction by ensuring that it is processed by the most suitable payment provider, which contributes to reducing processing costs and improving the overall efficiency of the payment process.

It is a powerful tool made possible by the orchestration of online payment. By understanding how it works and working with an orchestrator like Purse, you can improve transaction efficiency, optimize costs, and provide a better customer experience.

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2. What are the benefits?

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BIN routing offers a multitude of benefits for both e-retailers and end customers.

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1. Optimization of transaction processing costs:

By routing transactions to the most efficient PSPs for each type of card, BIN routing allows retailers to identify the route with the most favorable Performance/Price ratio.

2. Improving acceptance rates:

By ensuring that each transaction is directed to the most appropriate PSP, BIN routing helps to reduce payment denials and maximize successful authorizations, resulting in increased acceptance rates for merchants.

3. Flexibility and adaptation:

BIN routing allows retailers to respect their commitments to PSPs (volumes, card types, etc.) by sending them the agreed types of cards. It also allows volumes to be distributed between PSPs from different geographies.

4. Reducing the risk of fraud: 

By using the information provided by BIN routing to assess the potential risk of each transaction, merchants can put in place additional security measures to prevent fraud and protect their businesses from financial loss.

5. A payment”Frictionless”: the Holy Grail of Bin Routing to improve the payment experience

A frictionless journey is one that allows the payer not to go through the tedious process of strong authentication.

By sending the payment to the purchaser adapted to the issuing bank, it is possible not to go through the mandatory 3DS box. This feature is offered by some PSPs. Thus, BIN routing contributes to offering end customers a smooth payment experience, in which they feel valued, which reinforces their trust and satisfaction, while leaving the payment more likely to succeed.

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In summary, BIN routing offers a multitude of benefits for retailers, ranging from optimizing processing costs to improving the customer experience. By understanding and effectively using this feature, merchants can maximize revenue, reduce risks, and provide a seamless checkout experience for their customers.

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3. Who is BIN routing for?

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BIN routing is aimed at all types of merchants. This solution is particularly effective for the following profiles:

• Merchants with an international presence and end customers from different countries: in this case routing rules based on the country in which the card was issued are relevant.

• Merchants in control of their fraud rate and with average baskets < €250: the routing rules will be based on the bearer's issuing bank to streamline customer journeys with the frictionless.

• Merchants with an international presence who have an interest in also routing to local PSPs, in order to guarantee lower commissions (the merchant then obtains local network and interchange commissions).

• Merchants who have contractual commitments with their PSPs and who have a tool to honor them (volumes, card types).

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4. Conclusion: Purse x Payplug example

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As a European payment service provider and purchaser, Payplug benefits from a unique position on the market: thanks to its membership in the BPCE Group and its direct connection to the Cartes Bancaires (CB) network, it allows its customers to visibly increase their acceptance rates in France and Europe.

By integrating this solution into your orchestration strategy, you will be able to take advantage of its numerous advantages:

• As a local purchaser, Payplug allows you to reduce your interchange costs and service fees in France.
• Payplug integrates the emitter vision into its approach and technology, for maximized payment performance. Its Fastpass program, for example, guarantees you up to 98% of frictionless requests accepted on bank cards issued by Groupe BPCE or 20% of French traffic.
• Payplug executes 100% of CB authentications with 3-D Secure. Coupled with robust fraud analysis, this approach allows it to achieve payment performance above the market average: +7 points of frictionless and +1.8 points of successful authentication on credit card transactions.
• As a major member of Cartes Bancaires, Payplug can give you access to the service Safe'R by CB, which makes it possible to reach up to 99% of frictionless requests accepted from French banks (excluding Groupe BPCE) on transactions under €250.

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These combined advantages pave the way for smoother payment processes and a maximized acceptance rate with Payplug and Purse, especially in France. If you want to know more about how Payplug can support you in your growth strategy in France and Europe, do not hesitate to contact their teams.

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Purse is the payment ecosystem orchestrator, designed to enrich online payment experiences while simplifying its implementation. With its SaaS technology supported by experts and connected directly to more than 80 international and local payment partners, it maximizes conversion and guarantees the optimal acceptance of transactions from a single interface.

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Based on the card BIN entered in the form on the checkout page, Purse allows you to analyze and route to the PSP of the merchant's choice, according to the rules that the merchant has defined beforehand.

BIN Routing is a feature developed by Purse, in addition to others, which allows us to honor our commitments to you, e-retailers:

• A single technical integration
• Improving conversion and acceptance rates
• Optimize the customer journey and secure turnover

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In a nutshell, by recognizing your customers and their banks, you improve the acceptance rate of your payments, you reduce your fraud rate and you boost your conversion rate! What else?