How to Know If You Should Use Multiple Payment Gateways

Whether you’re building or optimizing your payment stack, today is the best time to think about a multiple-payment gateway strategy.

A multi-payment gateway strategy is a merchant using more than one payment service provider (PSP) or gateway to route transactions. Using multiple PSPs and gateways enables the merchant to optimize authorization rates, reduce costs, and add redundancy in case of an outage or disruption. The approach is mainstream in some markets, with 60% of EU merchants having adopted multiple payment PSPs and gateways.

The advantages of going multi-PSP are well known to those who have done so before. However, knowing where to start can be overwhelming for the uninitiated.

What does it mean to use multiple payment gateways, and why do it? 

If you're like most modern companies, your earliest goals revolved around getting to market quickly. So, you likely selected a single PSP or gateway, like Stripe or Adyen, to accept payments. These PSPs package tools, UI components, and relationships with banks like JP Morgan or Wells Fargo to accept and process payments.

Using payment gateways means having more than one PSP. Configuring transaction workflows to maximize the value of this strategy is often called payment optimization.

Return to Top

Who should set up multiple payment gateways? 

The value of using multiple payment gateways depends on the context of your business.

For example, a merchant selling five knitted dog sweaters per month probably doesn’t need multiple payment gateways. Having multiple payment gateways makes sense if you operate a high-risk business, like a collectibles trading site, and process thousands of transactions each month. Having a backup processor at this scale can take advantage of least-cost routing and payment orchestration strategies.

These questions will help others determine if using multiple payment gateways is right for them:

• Am I in a high-risk industry? If the nature of your business poses even a marginal chance of being shut off by your payments gateway, implementing a multi-payment gateway strategy should be a priority.
• What does my payment activity look like? Analyzing your transaction volumes, average purchase price, customer purchase frequency, current transaction costs, decline rates, and margins against the easier-to-measure benefits, like savings from least cost routing or revenue from improved authorization rates. Doing this also decouples the fuzzier or less apparent benefits of a multi-gateway strategy, like future optionality, so it can be discussed more objectively.
• Do you offer recurring or subscription-based payments? If your business relies heavily on subscription or recurring payments revenue, you know declines hit hard. Some direct-to-consumer brands claim to lose as much as 20% of its revenue because of failed payments. Once declined, the success rate of a customer adding back a card is low—like 5%, according to some studies, which is why it’s essential to have retry logic!
• What’s the impact on my business if my gateway goes down? Redundancy with gateways can maintain and protect income during downtimes. However, if you’re processing time-sensitive payments or rely heavily on impulse buys, you may want to consider having a backup PSP.
• How critical is friction at checkout? Optimizing the payment experience increases conversion. That may mean adding alternative payment methods, like real-time payments, or features, like card updating services, that your existing gateway doesn’t offer.

If your PSP prevents you from differentiating your core offering, you must rethink your payment stack.

Return to Top

What are the benefits of using multiple payment gateways? 

These benefits of multi-payment processing are through the lens of cost savings and revenue drivers.

• Improve Negotiations: The ability to move transaction volumes from one gateway to another gives you a stronger position to negotiate pricing with different providers.
• Lower Transaction Costs: Least-cost routing, or the ability to programmatically route payments based on multiple factors (e.g., location, network, card type), is becoming commonplace. It’s fairly low-risk to start small with in-house logic targeting several obvious factors, or to use emerging tools (e.g., AI or machine learning). High transaction volumes help the ROI, too.
• Decrease Support Costs: As you’ll learn in the next section, multiple payment gateways can improve authorization rates, payment experiences, and uptime. This can reduce the overhead associated with traditional support problems and improve customer retention.

• Improve Authorization Rates: There are various factors and reasons payments fail. While some are legitimate, estimates say 42% of Gen X and 56% of baby boomers will find another retailer because of a false decline. Retrying a failed transaction by rerouting the payment to another gateway can net you the sale and prevent customer churn.
• Improve Conversion: Using multiple payment gateways can offer alternative payment methods to your customers, like Buy Now Pay Later, QR codes, and more. This can make it easier for customers to make purchases, increasing your sales and revenue.
• Find Differentiators: Innovative partnerships, services, and features rarely conform to existing systems. However, unlike your systems, you can’t modify your payment processor’s capabilities. As discussed, PSP-specific tokens make it impossible to use or share your customers’ cardholder data with other third parties without having a robust PCI-compliant cardholder environment yourself. This vendor lock-in can become problematic when adding new partners with their own payment gateways. A multi-payment gateway strategy, when done right, ensures your PSP isn’t preventing you from differentiating your products, services, or partnerships.
• Provides a Contingency Path: As mentioned earlier, using multiple payment processors can help ensure your business does not lose revenue due to payment processing issues. If one processor experiences technical issues, you can still accept payments through another processor.
• Reduce cart abandonment: Increase transaction speed by measuring and routing transactions based on latency across gateways.
• Expand to new markets: Some gateways don’t service various locations. Onboard ones that do.

Return to Top

What are the challenges to implementing multiple payment gateways? 

While a number of different service providers have made it more cost-effective to implement multiple gateways, it's not without effort.

Owing your cardholder data is the first challenge a merchant must overcome to unlock working with multiple gateways. The problem is PSP-specific tokens are tied to the processor that issued them.

The solution? Migrating credit card and other payment data to a vault you control. If building and maintaining this type of environment is not realistic, a vendor-agnostic payment vault like Basis Theory is the solution. This approach collects the raw data and stores it independently, but allows the merchant to route it to any PSP or gateway using a token.

Managing the operational complexity is the other challenge to implementing multi-gateway strategies. Using multiple payment gateways requires additional card orchestration logic to reap benefits. However, starting small and writing logic that optimizes on known factors or scenarios can provide immediate ROI without tying you into a contract with a payments orchestration provider.

Many vendor-agnostic platforms provide environments for hosting this logic, card analytic capabilities needed to improve their algorithms, and an API to manage their implementation as code.

Return to Top

Provide examples of how merchants are using multiple payment gateways? 

These merchants illustrate how a multi-PSP strategy unlocks flexibility at different stages of growth.

Maxio is a billing and financial operations platform serving B2B subscription businesses. As the company planned geographic expansion and began adding acquirers and processors to support new markets, its team recognized that PSP-specific tokens would eventually become a structural constraint.

"Different geographic markets have different needs, and we knew there would be multiple additions to our payment stack as we grew with our customers," said Jon Cochrane, GM of Partnerships and Payments at Maxio. "We wanted to maintain the ability to swap out pieces of our stack with no customer pain."

By implementing Basis Theory as an independent tokenization layer, Maxio avoided what Cochrane described as a potential seven-figure migration problem. The business gained the flexibility to add processors, payment methods, and currencies without disrupting a single customer.

Marble is a digital insurance platform with partnerships across more than 60 insurance carriers. Customers purchasing policies through Marble needed a seamless checkout experience, but routing payment data securely across multiple carriers required a PCI-compliant environment Marble didn't want to build in-house.

After integrating Basis Theory in less than 30 days, Marble could tokenize card data at the point of entry and route it to the appropriate carrier without taking on the ongoing cost and operational burden of maintaining compliance internally. Today, Marble delivers over 15,000 quotes each month and helps members manage nearly $100 million in premiums.

“We were able to develop some of our own forms with Basis Theory that allow people to choose their payment method to complete the purchase,” explains Matt Donofrio, Head of Revenue at Marble. “Basis Theory takes the credit card data after it’s entered, tokenizes it, routes it to the carrier, and vaults the data.”

Return to Top

How can I get started with multiple payment gateways? 

The foundation of a multi-gateway strategy is straightforward: own your cardholder data independently from any PSP. Then what you do with that data, and who you route it to, is up to you.

YouPay is a good example of how to get started with multiple payment gateways. The gifting platform was paying $10,000 per integration every time they wanted to add a PSP. And each integration took between four and six weeks, requiring external approvals at every step.

After implementing Basis Theory as the independent payment vault, YouPay could add a PSP in hours.

“Controlling our destiny is what I've been after," said Clara Leigh, Technical Lead at YouPay. "Now, our payments are controlled in-house. I don't have to wait for anything, I can just go do it."

YouPay’s path is not uncommon, and the starting point is straightforward

It starts with migrating payment data into an independent payment vault. Our migration documentation covers the three most common starting points: importing cards on file, securing cards in your own database, and exporting tokens.

Migrate this data on your timeline, our team is ready to help.

Return to Top