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Insights and Expertise

Redundancy pays portfolios, this creates cash flow disruptions that can

affect their business operations. iGaming operators
off in retail, payment face even steeper consequences.
During outages, players abandon affected platforms
within minutes, gravitating toward competitors with
providers should uninterrupted service capabilities—precisely what
processor redundancy provides.
follow • Customer service costs skyrocket. The average
customer call now costs upwards of $0.95 per minute,
according to industry data (see (see https://bit.
ly/3ZqG65F)). During processor outages, call volumes
can increase tenfold as confused customers attempt
to complete their payments.
For billing organizations processing thousands
of transactions daily, this can mean hundreds of
thousands in unexpected call center costs. According
to McKinsey & Co. research, (www.mckinsey.com)
more than 60 percent of operational failures, such as
outages, result in at least $1 million in total losses,
with costs continuing to worsen as industry efforts
to improve reliability fall short.
• Customer satisfaction plummets. When processor
outages prevent payments, customer frustration
escalates immediately. Recent industry research
shows 23 percent of iGaming players who experience
funding issues abandon platforms permanently,
never to return.
By Steve Kramer For financial institutions, the damage extends beyond
PayNearMe the immediate transaction. Customers may miss
payment deadlines through no fault of their own,
any organizations that accept electronic pay- damaging their credit scores and destroying trust.
ments face a critical yet overlooked vulner-
ability: the widespread reliance on payment The truth is, processor outages aren’t rare anomalies;
M platforms that connect to just one merchant they’re inevitable occurrences. Weather events, security
processor. While this single-processor approach might incidents, software updates and network issues all cause
optimize costs for payments platforms, it creates sig- processor downtime. The question isn’t if processors will
nificant, yet often overlooked, risks for the banks, credit experience outages, but when, and how prepared your
unions, lenders and other businesses that depend on these payment platform is to handle them.
platforms for their day-to-day operations. The necessity of processor redundancy

What happens when a merchant processor experiences The solution to this vulnerability is straightforward
an outage? The answer is both simple and alarming: but surprisingly uncommon among payment platform
payments stop. For organizations connected to payment providers serving financial institutions, billers and
platforms with only one processor integration, this means iGaming operators: payment platforms need to maintain
their customers suddenly cannot make card payments— connections with multiple processors. This creates an
even if the platform itself is functioning perfectly. automatic fallback system if the primary processor
experiences an outage.
The consequences are swift and severe, impacting revenue,
operations and customer relationships. Here’s how processor redundancy should work: When
a payment platform detects issues with the primary
Consequences of outages for banks, billers, iGaming processor, it automatically reroutes transactions to an
operators alternate processor, making the transition invisible to
both the organization and its customers. While this
When a processor goes down, the impacts are immediate approach may be a best practice in retail, adoption has
and severe: lagged significantly among platforms serving financial
• Revenue delays become inevitable. Card payments institutions, billers and iGaming operators.
simply don’t process. For lenders managing loan The reluctance of some payment platforms to implement

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