---
title: "Payment Optimization Strategies: What merchants can do today to help"
description: Reasons for merchants to optimize their payment process and strategies to future-proof a payments stack!
image: https://blog.basistheory.com/hubfs/payments-optimization.jpg
---

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 December 5, 2024

![Picture of Basis Theory](https://blog.basistheory.com/hs-fs/hubfs/bt-favicon-new.png?width=50&name=bt-favicon-new.png) [Basis Theory](https://blog.basistheory.com/author/basis-theory-team) ·

[Payments](https://blog.basistheory.com/tag/payments)

# Payment Optimization Strategies: What merchants can do today to help

![What is payment optimization? An introduction to payments optimization](https://blog.basistheory.com/hubfs/payments-optimization.jpg)

## Table of Contents

- [Payment Vaulting](https://blog.basistheory.com/payment-optimization#vault)
- [Expand Payment Options](https://blog.basistheory.com/payment-optimization#expand)
- [Embrace Mobile Payments](https://blog.basistheory.com/payment-optimization#embrace)
- [Use Multiple PSPs](https://blog.basistheory.com/payment-optimization#multiple)
- [Combat Fraud](https://blog.basistheory.com/payment-optimization#combat)
- [Future-Proof Your Payments Stack](https://blog.basistheory.com/payment-optimization#future)

At its core, payment optimization streamlines the way businesses accept, process, and manage payments to improve customer experience and cut costs. It starts by identifying the time-consuming and expensive processes that drive up the total [cost](https://blog.basistheory.com/vaulting-payments-cost) of accepting payments. Improvements can then be planned and executed, like implementing best practices in cardholder validation, data collection, [payment routing](https://blog.basistheory.com/smart-payment-routing), and fee solutions that can optimize payments for the organization.

With the right payment optimization strategy, it is possible to lower the cost of payment acceptance while still delivering convenience, ease, and transaction security to your customers and your business - and keeping successful close rates high.

Payment optimization allows companies to:

- **Increase Sales**
- **Improve Conversion Rates**
- **Grow Profits**

Here's what merchants need to know about payment optimization.

## Payment Vaulting 

A credit card vault is a service provided by a third-party that stores, protects, and provides access to stored cardholder data for a merchant. [Tokenization](https://blog.basistheory.com/what-is-tokenization) is the special sauce that allows [credit card vaulting providers](https://blog.basistheory.com/credit-card-vaulting-service) to offer a safe, secure, and flexible service. It exchanges sensitive personally identifiable information ([PII](https://www.dol.gov/general/ppii#:~:text=Personal%20Identifiable%20Information%20(PII)%20is,either%20direct%20or%20indirect%20means.)) with a unique identifier, which can never be converted back to the underlying data.

The vaulting service is entirely payment service provider ([PSP](https://en.wikipedia.org/wiki/Payment_service_provider)) agnostic, meaning that stored information can be routed to any payment destination of the merchant's choice. Vaulting credit card data with a third-party provider reduces the cost of regulatory [compliance](https://blog.basistheory.com/tokenization-pci-compliance-faqs) for a merchant and does away with the risk of PSP lock-in

[Return to Top](https://blog.basistheory.com/payment-optimization#TOC)

## Expand Payment Options 

One way to optimize your payments is by offering more [payment options](https://www.shopify.com/blog/payment-options). Companies that offer multiple ways to pay have a broader range of options for their customers, leading to more opportunities to attract sales. In one [study](https://www.digitalcommerce360.com/2021/12/29/why-nearly-half-of-shoppers-who-move-from-cart-to-checkout-leave-before-paying/), 7% of shoppers abandoned a transaction due to a lack of familiar payment options. To optimize, businesses should offer ways to pay beyond credit and debit cards, such as electronic checks, gift cards, and [mobile wallets](https://en.wikipedia.org/wiki/Digital_wallet).

By diversifying your payment options, you also open up your business to new customer segments. For example, while some consumers are happy to pay by credit card, many younger consumers prefer online wallet options like Apple Pay, Google Pay, or Venmo. Consumers across the world often prefer local choices, like Alipay, BLIK and Boleto.

And, as [alternative and emerging payments](https://blog.basistheory.com/alternative-payment-methods) continue to become mainstream, ensure you offer the payment methods your customers seek.

[Return to Top](https://blog.basistheory.com/payment-optimization#TOC)

## Embrace Mobile Payments 

Another key aspect of payment optimization is recognizing the [growing importance](https://thepaymentsassociation.org/article/evolution-of-payments-the-rise-and-future-of-mobile-transactions/) of mobile payments. The number of consumers using mobile payment methods has risen drastically in the last several years. Capital One Shopping [estimates](https://capitaloneshopping.com/research/digital-wallet-statistics/) that 114.8 million smartphone users used mobile payments in 2023, which is about 43% of all US smartphone users. A critical factor in mobile payments is the younger generations of shoppers. 78% of [Gen Z](https://www.pewresearch.org/social-trends/2020/05/14/on-the-cusp-of-adulthood-and-facing-an-uncertain-future-what-we-know-about-gen-z-so-far/) shoppers said they would stop shopping somewhere that did not accept mobile payments, according to a 2023 [Forbes](https://www.forbes.com/sites/kristinmueller/2023/11/07/gen-z-shoppers-transforming-holiday-retail-the-rise-of-in-store-experience/) Advisor poll.

At this point, it is clear shoppers demand mobile payments in the US and internationally, and businesses must implement mobile payment options to stay competitive.

To optimize mobile transactions, businesses should focus on creating a user-friendly and easy “mobile-first” interface for consumers. This can include features such as touch ID, fingerprint scanning, and facial recognition for added security and convenience.

[Return to Top](https://blog.basistheory.com/payment-optimization#TOC)

## Use Multiple PSPs 

Contracts with different Payment Service Providers (PSPs) can vary significantly based on a range of factors, including:

- **Sales Volume**
- **Payment Types Supported**
- **Online** versus offline payment services.
- **Fee** structure (transactions commonly incur fees of a percentage plus a flat amount.)
- Providing one-time and/or [subscription](https://www.forbes.com/sites/zengernews/2024/05/17/quality-over-quantity-the-subscription-economy-shifts-its-focus/) payment services.
- Geographical location (which can incur [cross-border](https://www.imf.org/en/Blogs/Articles/2024/01/03/how-training-and-advice-can-speed-cross-border-payments-and-cut-costs) charges.

By contracting with multiple PSPs, vendors can [algorithmically determine](https://blog.basistheory.com/smart-payment-routing) the optimal PSP for each secure transaction. For instance, a vendor may have guaranteed a certain volume of traffic to a higher-fee PSP that is particularly adept at processing [cross-border transactions](https://blog.basistheory.com/cross-border-payments); but be able to redirect excess transactions to a lower-cost provider once the guarantee is met.   

In order to use multiple PSPs effectively, vendors need to ensure they either complete the onerous and ongoing task for becoming [PCI-DSS Level 1](https://blog.basistheory.com/pci-compliance-levels#What) compliant so that they can store sensitive data; or contract with a tokenization partner, like Basis Theory, that can provide a secure token vault and reduce the risk and cost of passing raw sensitive data to the PSP endpoints.

[Return to Top](https://blog.basistheory.com/payment-optimization#TOC)

## Combat Fraud 

Combating fraud is also a crucial part of optimizing payments. According to the Federal Trade Commission (FTC), credit card fraud [accounted for](https://www.ftc.gov/business-guidance/blog/2024/02/facts-about-fraud-ftc-what-it-means-your-business) 42% of all identity theft complaints in 2019 and a report by Javelin Strategy and Research showed that credit card fraud occurs every two seconds in the United States.

These statistics demonstrate the universal threat of credit card fraud and the importance of implementing measures to combat it, so companies must be cautious when choosing [secure payment services](https://blog.basistheory.com/secure-payment-systems) and work with partners that can accurately detect [fraud](https://blog.basistheory.com/2023-global-payments-fraud-report) and prevent flagging genuine transactions. This includes implementing fraud detection software, training employees on how to spot fraudulent transactions, and requiring additional verification steps for high-risk transactions.

[Return to Top](https://blog.basistheory.com/payment-optimization#TOC)

## Future-Proof Your Payments Stack 

Payment optimization is crucial for businesses looking to stay competitive in e-commerce and beyond. By expanding payment options, embracing mobile payments, and combating fraud, businesses can increase sales, improve [conversion rates](https://blog.basistheory.com/challenges-in-migrating-payment-processor), and ultimately grow profits.

Merchants should stay informed about the latest trends in payment technology and find ways to implement them in their own operations, because the "emerging" [trends](https://www.salesforce.com/commerce/ecommerce-trends/) of today will be the mainstay factors of tomorrow.

Programmable payment vaults offer a great solution to future-proof and optimize a merchant's payment stack. Choosing a partner like [Basis Theory](https://basistheory.com/) allows merchants to:

- **Create** engaging e-commerce flows. 
- **Connect** with any partner.
- **Effortlessly** manage compliance.
- **Keep** control of payment data.

Merchants can [stand up a vault](https://developers.basistheory.com/?_gl=1*vinyai*_ga*MTkxNDczOTU4MS4xNjY4MDk4NjQ2*_ga_CVTJZHL7Y2*MTcwMjA2NzMxMy45OTkuMS4xNzAyMDY3MzE1LjU4LjAuMA..*_gcl_aw*R0NMLjE3MDEyOTE2MzEuQ2owS0NRaUEzNXVyQmhEQ0FSSXNBT1U3UXdsbWZoNmE2X2prU1lfbHBWcElRak5FR0REYjV6NThlWVg2TU5wVGF3RFZGQ3dGa05Zd3JyUWFBbEVzRUFMd193Y0I.*_gcl_au*MTMwMTI5MTQ2Mi4xNjk4NjczOTY0Ljc3Njk3ODYyLjE3MDIwNjExMTQuMTcwMjA2MTQzNQ..) in as little as 5 minutes and begin migrating card data, connecting with partners, and controlling payment flows. And, because we strongly believe in vendor flexibility, we make it easy for merchants to migrate their data off Basis Theory.

[Return to Top](https://blog.basistheory.com/payment-optimization#TOC)

[![View an Interactive Demo   See how the Basis Theory platform secures payment data and significantly reduces PCI compliance burden from day 1.  ](https://no-cache.hubspot.com/cta/default/22332934/interactive-171495116167.png)](https://blog.basistheory.com/hs/cta/wi/redirect?encryptedPayload=AVxigLKRJhuujcbJ92D9roCG2puof53zE%2BsoRShF531CrX2Tej7oSUY4E8ZL1aC0LpO086cQa1JxUlpzRqm5916duFE%2FZpZfmG%2FpEs%2BgisOhRKtuTWSEjPyTeYtbOA6qIeX8DTg4rf05WrezD3CzYe%2FPzx6esA15GZKAztAa7NNClWT0NyvXD9we8BI1CVkEx913%2BBteIJyI7Uh5In10ffueLRNQBPk%3D&webInteractiveContentId=171495116167&portalId=22332934)

## Related posts

[![The Real Costs of Vaulting Payments](https://blog.basistheory.com/hubfs/real-costs-vaulting-payments.png)](https://blog.basistheory.com/vaulting-payments-cost)

[Payments](https://blog.basistheory.com/tag/payments)

### [The Real Costs of Vaulting Payments](https://blog.basistheory.com/vaulting-payments-cost)

![Picture of Basis Theory](https://blog.basistheory.com/hs-fs/hubfs/bt-favicon-new.png?width=50&name=bt-favicon-new.png) [Basis Theory](https://blog.basistheory.com/author/basis-theory-team) 

 January 4, 2024

[Read more](https://blog.basistheory.com/vaulting-payments-cost)

[![ROI of multi-processor routing](https://blog.basistheory.com/hubfs/roi-multi-processor-routing.png)](https://blog.basistheory.com/roi-multiprocessor-routing-subscription-businesses)

[Payments](https://blog.basistheory.com/tag/payments)

### [Evaluating the ROI of Multi-processor Payment Routing for Subscription Businesses](https://blog.basistheory.com/roi-multiprocessor-routing-subscription-businesses)

![Picture of Basis Theory](https://blog.basistheory.com/hs-fs/hubfs/bt-favicon-new.png?width=50&name=bt-favicon-new.png) [Basis Theory](https://blog.basistheory.com/author/basis-theory-team) 

 May 14, 2024

[Read more](https://blog.basistheory.com/roi-multiprocessor-routing-subscription-businesses)

[![How universal payment vaults prevent payment failures](https://blog.basistheory.com/hubfs/universal-payment-vaults-prevent-failures.png)](https://blog.basistheory.com/universal-payment-vault-prevent-payment-failure)

[Payments](https://blog.basistheory.com/tag/payments)

### [How Universal Payment Vaults Prevent Payment Failures](https://blog.basistheory.com/universal-payment-vault-prevent-payment-failure)

![Picture of Basis Theory](https://blog.basistheory.com/hs-fs/hubfs/bt-favicon-new.png?width=50&name=bt-favicon-new.png) [Basis Theory](https://blog.basistheory.com/author/basis-theory-team) 

 December 19, 2023

[Read more](https://blog.basistheory.com/universal-payment-vault-prevent-payment-failure)

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