Unlocking Substantial Payments Budget Savings for a Top Digital Merchant

Client Challenges

Rising Costs

Increasing network and interchange fees, the growing prevalence of premium-branded cards, and the high cost of cross-border transactions.

Under Utilized Debit Routing Incentives

Despite having access to attractive PINless debit routing incentive deals, the client was not optimizing their debit routing strategy effectively, resulting in missed savings opportunities.

Complex Cross-Border Costs

The client operated globally, which introduced complexities in cross-border payments, including differing fee structures, regulatory challenges, and unfavorable FX rates, all of which contributed to higher payment costs.

To address these challenges, our team deployed a comprehensive approach leveraging its unique data lake and the CMSPI Platform.

Strategic Solutions

Data Analysis and Performance Comparisons

After a seamless ingestion process, our team began by conducting a thorough analysis of the client’s transaction data. This process involved breaking down their transaction characteristics and comparing the performance of each element to the CMSPI data-lake, a vast repository of trillions of data points from various merchants and industries. By utilizing the CMSPI Platform, the team was able to identify instances of underperformance, overcharges, phantom fees—expenses that other merchants simply weren’t paying—and suboptimal costs.

Maximizing PINless Debit Routing Efficiency

One of the key areas where we delivered substantial cost savings for the client was in optimizing their PINless debit routing strategies. Leveraging the CMSPI Platform and the power of machine learning, CMSPI performed a detailed analysis and execution process:

• Transaction-Level Analysis:

  Our team began by conducting a comprehensive analysis of the client’s debit routing choices at a transaction level. This granular approach allowed for a detailed examination of each payment and the routing choices made.

• Scenario Mapping:

  Our specialists utilized the CMSPI Platform to identify transaction-level issues related to not maximizing incentives, sub-optimal costs, or alternative paths for routing. Using advanced machine learning to map out complex scenarios, determining where each transaction could or should be routed and at what cost, our specialists were able to identify millions in additional value through redistributing transactions and negotiating with payment partners.

• Market Expertise:

  Our team worked with the client to map out a market approach for delivering improved transaction costs and performance. Continuously utilizing the CMSPI Platform and unique data insights to model different scenarios based on partner bids, PINless enablement, and various business limitations. We professionally managed a tender process, assisting the client in maintaining relationships while delivering impactful savings.

• Post-Implementation Analytics:

  The optimization process didn’t end with the implementation of new debit routing strategies. Our powerful analytics continued to play a crucial role in ensuring that the client’s routing remained optimal and flexible. This was particularly important in an ever-changing payments market, where conditions and rates fluctuate.

Cross-Border Cost Analysis

To address the complex cross-border payment challenges, our specialists assessed the performance and impact of various payment methods and processing partners on their expenses. Our team provided the client with a set of customized recommendations based on the analysis, recognizing underlying issues such as rising cross-border network fees, FX rates, domiciliation, regional routing, and more. The client retained executive control over which initiatives to pursue at any given time.

Results

Cost Savings

The client achieved substantial 8-figure annual cost savings by optimizing their debit routing strategies, ensuring they fully leveraged incentive deals, and unlocking previously unattainable results.

Cross-Border Efficiency

Through the analysis of cross-border costs, the client gained insights into the most cost-effective payment methods, sub-optimal network fees, and currency conversion practices, leading to streamlined cross-border payment processes and reduced expenses.

Transparency and Performance Comparisons

Our unique data-lake and unmatched market visibility allowed the client to gain a more detailed understanding of their payment performance, enabling data-driven decisions and continuous improvements. Issues were identified, including FX-related network fees, suboptimal incentives, misapplied fees, and a failure to maximize PINless routing at the transaction level.

Ongoing Optimization

While using the CMSPI Platform, our specialists continually assess transaction performance, introducing optimizations throughout the duration of the partnership. This is crucial as network badging changes occur, along with rule changes, regulations, partner conflicts of interest, and more.