Moving money should be easy, fast, and reliable for merchants — but the challenges of legacy systems can leave payment processors struggling to meet those expectations. Slow processing times, disruption vulnerabilities, and overloaded payment systems can leave customers frustrated and searching for better solutions. 

For processors increasingly moving towards a value-added services model, optimizing disbursements offers a crucial opportunity, both within the merchant services and B2B and B2C payments markets. Because businesses rely on consistent disbursements to operate and serve customers — from retail merchants to enterprises across industries — optimizing these B2B payment cycles through automation, efficient settlement, and resilient infrastructure is expected to become a $111 trillion opportunity globally by 2027 (Juniper Research).

At Blankfactor, we help leading payment processors build more resilient payment systems for merchants, including disbursements. Read on to find out how we’re driving impact for processors with the latest technologies. 

The cost of faulty merchant payment infrastructure

Though merchants once exclusively relied on checks to manage B2B payments, including disbursements, the demand for digital and instant payment solutions is quickly growing. In 2022, only 33% of B2B payments were issued via check. (Nacha)

With customer expectations evolving, payment facilitators (PayFacs) and processors are under pressure to deliver seamless digital payments experiences — or face challenges with customer loyalty as merchants consider competitor offerings. If merchants consistently face late settlement disbursements, they may seek solutions that pay out reliably and on time. The cost of faulty infrastructure can go far beyond the initial loss of business as customers move to another provider and may include:

  1. Fines & penalties. Card networks and regulators typically levy fees and fines for late disbursements, directly affecting the processor’s bottom line.
  2. Risk exposure. As delays go on, additional disbursement amounts may be accumulating. The PayFac could be liable for these funds if system failures affect merchant accounts before the money is moved. 
  3. Opportunity costs. Resources across the processor become overextended to address late disbursements, including engineering, merchant support, and other operational resources. This leaves fewer resources for improving systems and delivering new product offerings.

On top of these impacts to PayFacs are the problems experienced by merchants, including liquidity challenges and threats to the business’s operational needs. The merchant’s B2C payments could also be impacted, as disbursement delays may affect refunds or account credit payouts.   

But on the other hand, merchants are willing to invest in reliable payments services that deliver the innovative solutions they need to manage transactions and beyond. In a recent report from S&P Global, surveyed merchants revealed that:

  • They will expand their budget for payments technology and digital offerings that improve the customer experience.
  • Payments modernization will be crucial for their business’s success, according to 2 out of 3 survey participants.  
  • Tech platform quality – including seamless APIs and cloud tech — is crucial to choosing their payment processor partner, according to 60% of merchants.

For the long term, investing in resilient payment systems pays off

For merchants, seamless payments platforms mean a better customer experience that they’re willing to pay for, and investing in resilient payments systems is crucial for long-term success across the payment processing ecosystem.

Consider a few other key reasons to optimize digital payments technologies:

1. Scalability. As transaction volumes increase and your business scales, that’s good news — but if your payments systems aren’t built to handle the load, you may not be able to deliver on the core services your customers expect. 

2. Improving value-added services. As merchant processors move away from a transaction-only service model, tailored, value-added financial services will only become more important. Access to reliable B2B payment services, like disbursements and funding access, will offer new strategic growth areas for PayFacs. 

3. Instant and real-time payments delivery. From retail POS to B2B payments, consumers are increasingly expecting faster payments. With the latest technologies, processors can deliver on new speed expectations.  

4. Digital transformation demands. Long-term investments in digital transformation and resilient payments infrastructure will enable processors to offer more responsible, scalable, and innovative solutions to merchants. 

But processors can face a host of challenges in implementing robust digital payments architectures that will withstand a range of stresses that test operational resilience. Whether your organization lacks the in-house expertise to analyze recurring technical issues or you don’t know where to prioritize your team’s resources, review our checklist for optimizing your disbursements system. 

Checklist: How payment processors can boost disbursements resiliency

Consider these top practices that can help processors improve resiliency for disbursement processing cycles. 

  1. Build in redundancy. Set up failover through multi-region/zone deployments, which prevents interruptions to disbursement processing if one system goes down.
  2. Automate retries. Before reporting permanent failures, automatically retry failed disbursement transactions arising from temporary issues. This prevents breaking disbursement cycles.
  3. Implement near real-time monitoring. Enable granular visibility into disbursement transaction flows to resolve issues quickly.
  4. Run disbursement simulations. Simulate massive disbursement loads to test system capacity and performance.
  5. Architect for scaling. To handle volume spikes during peak cycles, horizontally scale disbursement processing capacity.
  6. Enable fluid disbursement degradation. Minimize delays in overload scenarios by implementing features like queue prioritization and throttling.
  7. Give self-service controls. Work around disruptions by allowing dynamic adjustment of disbursement parameters (timing, transaction routing).

Case study: Optimizing disbursements for a leading payments processor

Organizations turn to a partner like Blankfactor because we have a deep history in designing and delivering robust financial technologies, and we understand how PayFacs work. We bring deep expertise across the payments ecosystem, including transaction processing, disbursements, and product development.  

One of our current clients, a leading global payments processor, sought our help with several disbursement processing concerns. The client was rapidly scaling following increased market demand for its merchant services platform, and they faced significant challenges maintaining business continuity along with growth.

The client had made previous attempts to improve and scale their merchant payments infrastructure, primarily for disbursements. This led them to reach out to a professional services organization that could rapidly scale financial technologies with increased payment volumes. The client looked to Blankfactor to:

  • Analyze their payments infrastructure needs and monitor traffic. 
  • Optimize the existing cloud infrastructure to handle monthly exponentially increasing transaction volumes, including updating queries and incorporating new technologies. 
  • Address related challenges arising as a result of infrastructure overload.
  • Improve the merchant experience with timely disbursement and reconciliation services as well as building new features.

After working with Blankfactor, the client has seen a dramatic improvement in performance. Our team of payments experts delivered solutions that have enabled the client to scale and meet increased disbursement demands. 

We’re now tackling several new projects for the client as they further expand their merchant solutions platform, including an innovative embedded payments offering and expanded product features.

Partner with payments technology experts at Blankfactor

Payment processors have a crucial opportunity to invest in resilient payment systems that deliver for merchants, powering the kind of innovative value-added services merchants are willing to invest in. With the right payments solutions partner, processors can confidently scale to meet demands, ensure reliable services even during peak cycles, and focus engineering resources on developing the products merchants need.

At Blankfactor, we combine deep payments expertise with the latest cloud-native tech stack experience to help processors create future-proof solutions. Our team brings decades of experience across financial services technology, from building payment gateways to innovating merchant processing. We understand how to architect the kind of payments resiliency that drives business outcomes — fast. 

Get expert support from payments technology builders trusted by industry leaders. Book a strategy session today to get the custom solutions you need to drive your business forward.

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