Table of Contents
Introduction: The Complexities of Managing Multiple Payment Gateways
For any growing business, managing payments efficiently is crucial to success. As transaction volumes increase, the complexities of handling payments multiply. Many companies rely on multiple Payment Aggregators to process transactions. The choice of payment aggregator (PA) often depends on factors such as transaction success rates and processing fees for specific payment modes.
However, without a robust payment management system in place, relying on multiple PGs can create significant challenges. This article explores the hidden costs of not having a payment router and how it impacts your business, especially during periods of high transaction activity.
The Current Scenario: Managing Payments Without a Payment Orchestrator
Consider a company that processes thousands of transactions each month. This company uses several PAs to handle different types of payments. However, managing these PAs can be resource-intensive due to the need for multiple integrations, constant monitoring, and manual handling of transaction failures and reconciliations.
Let’s break down some of these costs…
Cost of Integration with Each Payment Aggregator
Integrating with multiple Payment Gateways (PGs) can be costly, with initial setup expenses ranging from ₹2 lakh to ₹4 lakh per PG. Ongoing maintenance, including API updates and security measures, can add 15-20% annually. For companies using 3-5 PGs, this can result in up to a crore of total integration and maintenance costs over a few years, diverting resources from other strategic initiatives.
Cost of Manually Monitoring Payment Gateway Performance
Manually monitoring the performance of PGs and routing payments requires constant oversight. It’s estimated that businesses without automated systems can spend anywhere from 10 to 25 hours per week monitoring transactions and troubleshooting issues. Furthermore, manual monitoring can result in up to 10-15% lower transaction success rates during peak periods, exacerbating revenue losses when transaction volumes are highest. This inefficiency can translate into revenue losses of tens of lakhs per month, especially for high-volume businesses.
Cost of Manually Reconciling Payments and Refunds
Manual reconciliation across multiple PG dashboards is a time-consuming and error-prone process. For companies processing thousands of transactions monthly, this task can take 3-4 full working days each month. Errors in manual reconciliation, such as discrepancies between transaction data and bank records, can cost businesses up to 1-2% of their annual revenue due to overpayments, missed refunds, or duplicate charges. In some cases, these errors can lead to compliance issues, resulting in penalties and increased audit scrutiny.
Impact on Transaction Success Rates During Peak Periods
During peak periods like product launches or sales events, the lack of automated payment routing can significantly impact transaction success rates. In a recent survey, conducted by Cashfree recently it was found that:
- 19% of the shoppers abandoned their cart because they couldn’t find their preferred payment mode
- 15% gave up shopping because their payment failed
For e-commerce companies with annual revenues in the millions, this can translate to crores of rupees in lost sales during key sales events. Additionally, repeated transaction failures can harm brand reputation, with 62% of customers stating they would abandon a brand after three failed payment attempts.
Disadvantages beyond Costs
The hidden costs of managing payments without an orchestrator go beyond financial losses. Not using a payment router leads to lower transaction success rates. Customers may experience failed transactions, leading to frustration and abandoned purchases.
Summarising the hidden costs
A centralized payment orchestration platform is crucial for optimizing payment processes. Without one, businesses may lose up to 5% of annual revenue due to inefficiencies in payment processes, including manual routing, reconciliation, and troubleshooting. This can hinder growth, as resources are diverted to operational tasks. For fast-growing companies, this can cost crores of rupees annually. Implementing a centralized platform can increase transaction success rates by 15-20%, leading to higher revenues and better performance.
Key Market Insights
| 70% Average transaction success rate (vs. 90% in the US) | 100+ Distinct payment options needed by Indian users | 75s+ Average time to check out due to 2FA / compliance | 1Cr+ Cost of building an enterprise-grade payment stack |
The New Scenario: How a Smarter Payment Management System Can Help
Now, imagine the same company implementing a smarter payment management system that streamlines and optimises its payment processes. This system helps automate processes like payment routing and reconciliation while reducing the cost of integration with individual PAs. With this system in place, several key hidden costs associated with managing multiple Payment Aggregators (PAs) are eliminated:
Effortless PA Integration: A Game-Changer for Business
A payment management system revolutionizes the integration process. Instead of months of development time and significant costs, this company can now onboard new Payment Aggregators (PAs) with a simple click. This eliminates the manual effort, time, and money associated with traditional integration methods.
By using the payment management system, the company saves up to ₹1 crore to ₹2 crore over a few years by eliminating the need for separate integrations. Onboarding new PAs takes minutes instead of weeks or months, allowing this company to focus on core business activities rather than time-consuming integration processes.
Automated Payment Routing: A Smarter Approach
A smarter payment management system utilizes intelligent routing capabilities to direct payments to the most efficient Payment Gateway (PG). The system ensures optimal routing in real time by considering factors such as transaction size, customer location, and PG success rates. This automation eliminates the need for manual intervention, reducing the risk of human error and saving up to ₹40 lakhs in manual effort costs.
Centralised Reconciliation for Improved Efficiency
A smarter payment management system streamlines reconciliation and refund processes, eliminating the need for manual intervention. By automating these tasks, businesses can significantly reduce the risk of errors like overpayments, missed refunds, or duplicate charges. This potential reduction in errors can lead to cost savings of up to 2% of annual revenue, which would otherwise be lost.
Optimise Payment Routing and reduce payment failures
With a payment management system, payments are directed through the most efficient and cost-effective gateways. By leveraging intelligent routing and real-time adjustments, payment failures are greatly reduced. This leads to fewer abandoned carts and a boost in revenue. Additionally, the company can save on payment processing costs by transacting more through the most economical gateways, potentially recovering up to ₹1.62 crores in lost revenue during peak sales periods.
Streamlined Operations and Reduce Costs
Implementing the payment management system allows the company to cut operational costs by 90% by removing manual tasks, reducing failed transactions, and minimizing errors in refunds, reconciliations, and settlements. This leads to a 3-5% reduction in annual revenue loss and lowers orchestration costs.
Peace of Mind with data-driven operations
A smarter payment management system offers a centralised platform, providing a comprehensive overview of your payment operations. With a unified dashboard, the company can now track all transactions, payments, and refunds in real-time. It can analyze the performance of its PAs and gain insights into payment success rates, processing times, and costs. The company can manage exceptions better by Identifying and addressing issues like failed payments or disputes.
Overall Savings
By implementing a payment management system, the company potentially increases its annual revenue by up to 20% while improving transaction success rates by 15-20%. This translates to a significant boost in both revenue and operational efficiency.
Who Should Consider a Payments Management System?
A payments management system is vital for businesses handling high transaction volumes and complex payment operations. A payments management system can significantly streamline operations if you operate in retail, finance, hospitality, or any industry with frequent transactions and multiple PG integrations. Companies that experience frequent sales spikes, handle cross-border transactions or aim to optimize payment processes will find these systems especially beneficial.
A payments management system like flowWise consolidates operations into a single platform, reducing manual efforts, improving transaction success rates, and enhancing user experiences. For companies managing high-value transactions, recurring billing, or international payments, such a system is transformative, enabling growth and operational excellence.
flowWise by Cashfree Payments: Your Ultimate Payments Management Solution
flowWise by Cashfree Payments is a state-of-the-art payments management system designed to simplify and optimise your payment processes. It offers a unified platform to manage all your Payment Gateways (PGs), enabling businesses to easily handle high transaction volumes. With flowWise, you can streamline payment operations, boost transaction success rates, and minimise manual efforts, all while delivering an exceptional customer experience.
Key Benefits and Features of flowWise
| 1 | Unified Dashboard: Manage, track, and analyse all your PGs from a single, intuitive interface, providing real-time insights and control over your payment operations |
| 2 | Smart Routing: Utilize AI-driven dynamic routing and 40+ customisable parameters to ensure each transaction is directed to the most efficient PG, enhancing success rates and reducing costs |
| 3 | Quick Integration: Onboard new PGs in under 5 minutes, saving months of development time and allowing you to scale your payment infrastructure rapidly |
| 4 | Advanced Security: Detect and block high-risk transactions using historical data, and protect your business with smart fraud detection and prevention tools |
| 5 | Seamless Reconciliation: Monitor refunds, reconciliations, and settlements from the same screen, simplifying complex processes and minimizing errors |
| 6 | Flexible Payment Options: Save card details across PGs and offer CVV-free payments, enhancing convenience for your customers |
Customer Success
Our customers with 10 lakh+ monthly transactions and ₹1000+ crores monthly GMV have experienced the following benefits:
| ✅ 10-15% lower cart abandonment with unified XP |
| ✅ AI-driven routing for 5-10% higher SR |
| ✅ Seamless SR and payment tracking for all PGs |
| ✅ 90% lower ops and finance effort with FlowWise |
| ✅ 10-15% increase in revenue while reducing payment processing costs by up to 40% |
flowWise offers the only integration you’ll ever need. With access to 200+ payment modes and 10+ payment aggregators, you can easily test, launch, monitor, and customize your payment stack. Seamlessly add as many PGs and payment modes as required through our intuitive dashboard.
Boost your success rate and ensure a smooth, consistent customer experience with advanced AI-driven routing—all while maintaining 100% compliance and complete data privacy with flowWise.
| flowWise All-In-Access As an introductory offer, flowWise is providing 6 months of free all-in access to all its advanced features. This allows your business to experience the full capabilities of flowWise, with no upfront costs, and see firsthand how it can transform your payment management and drive growth. Get in touch to know more. |
In today’s competitive landscape, the ability to manage payments efficiently can be the difference between growth and stagnation. A smarter payments management system simplifies the process and enhances the overall user experience, leading to higher revenue and reduced operational costs.
If you’re ready to elevate your payment processes, we invite you to explore the benefits of a smarter payment management system. Sign up for a free consultancy and demo today to see how it can help your business thrive.
