If your business moves high volumes of virtual products such as airtime, prepaid utilities and bill payments, how do you make sure you get optimal value out of these transactions? This article looks at the benefits of engaging with multiple service providers in the digital goods and services space.

In the South African digital goods and services landscape, there are numerous service providers or aggregators that offer a diverse selection of products. Some products are unique to a service provider. For example, a municipality might only accept account payments or prepaid purchases through a specific aggregator. For you to give your customers greater choice, it is therefore necessary to onboard more aggregators. But many of the most popular products, such as fixed-value data bundles for a particular mobile network operator, are sold by more than one provider. So in this case, how does it benefit you having two (or even more) suppliers selling the same product?

Firstly, there is the risk of downtime. If you rely on a single service provider and they fail to process transactions for any significant length of time, this will result in loss of commission revenue, and a poor experience for your customers. The higher the volumes and value of the transactions, the more amplified the impact.

Secondly, it allows you to negotiate favourable commissions across a range of products and services. Even a small increase in commission for a high-volume service can have a large impact on the bottom line.

So, how can these business benefits be realised through your technology? Let’s consider some possibilities:

Manual retry

You could integrate your channels directly to two or more aggregators. When a transaction is initiated, the user – be they a cashier at a point-of-sale or a customer on their mobile device – explicitly selects which aggregator to use. If a transaction fails because the selected provider is offline, then the user can try another provider. This is simple, but has a poor user experience. It requires the user firstly to understand why there are multiple options to purchase the same product, and secondly to go through the effort of selecting an alternative button or menu item and initiating the purchase again should the initial attempt fail.

Automatic failover

For a greatly improved experience, you can let a transaction switching system manage routing and failover. Here the user will only ever need to select a single option for each product or service. The switching system then determines where to route the transaction, and can automatically reroute the transaction to an alternative provider if required.

Load balancing

If your switching system has load-balancing capabilities, then you have a powerful means of managing how your transactions are split between your service providers. A load balancer would typically allow one to set the proportion of transactions routed to different connections. The benefit of this is to increase traffic to the provider that gives you more favourable commercials. In addition, the load balancer can handle automatic failover, so if the preferred provider experiences an outage, your customers can still transact.

Product-level routing

The simplest form of load balancing will allow you to manage transactions at a service provider level, but even more gains can be made by being able to specify preferred routes at a product level. In the case of airtime and data products, it may be that one provider in general offers you better commissions, but a selection of data bundles are discounted by another. Another example would be if one bill payment aggregator is your preferred provider, but certain bill issuers are only contracted to another bill payment aggregator.

Having a flexible way to manage your digital goods and services offerings across multiple service providers can give you benefits, but it can get technically complex. Focus on where you can optimise your business and improve customer experience, then look at what technology solutions best suit your needs.

Contact us to find out more about how Electrum’s transaction processing hub can help you optimise revenue across multiple service providers.

Neil MacKellar

Neil MacKellar

Neil MacKellar is a former climate scientist, turned java developer, turned product lead at Electrum Payments.