Backup Payment System

A fallback or backup payment system ensures that merchants can continue to process transactions even if their primary payments processor is unavailable. In this case, transactions can be routed via the fallback/backup system.

A fallback or backup system is a system that can be used if the primary system is unavailable. In the case of payments, fallbacks can be used in cases where a payments processor is unavailable to handle transactions. Transactions that would normally be routed to one PSP or acquirer can be rerouted to another one, either temporarily or permanently.

This ensures that transactions can continue to be processed, safeguarding revenue generation for the merchant.

Having a backup or fallback system in place is part of a good risk management strategy. Being unable to accept payments means being unable to generate revenue, and revenue generation is the cornerstone of any business.

While the risk of a payments processor being unavailable is small on any given day, the impact of even relatively short downtimes can be massive in terms of missed revenue. Having a fallback system in place means that in the event of a payments processor being unavailable, the merchant’s business is largely unaffected, and payments can continue to be processed to ensure a continued revenue stream.

There can be a number of reasons why a payments processor is unavailable. There may be a temporary outage for technical reasons - either at the payments processor itself, or due to the internet connections between the merchant and processor being disrupted.

Another - often more serious - reason that a merchant can no longer process transactions via a specific provider is due to either the processor going out of business, or due to the processor deciding to terminate its business relationship with the merchant. In these cases, the outage is permanent, and not having a backup in place can seriously disrupt a merchant’s ability to do any business going forwards. A classic example of this scenario was the collapse of Wirecard; merchant’s who relied completely on Wirecard to handle their transactions suddenly found themselves unable to do business overnight. This resulted in many merchants with no back up in place scrambling to find alternative solutions.

To ensure that any disruptions are kept to a minimum in the case of an outage - either temporary or permanent - being able to route transactions to an alternative provider is key. The easiest way to handle this scenario is by using dynamic transaction routing, e.g. within IXOPAY.

Setting up alternative transaction routing is simple, can be done in a few minutes, and fallback rules can be implemented. These rules handle scenarios where the preferred payment provider is unavailable by routing transactions to alternative providers automatically.