Adyen's Intelligent Payment Routing Achieves 26% Cost Savings and Improves Payment Performance on US Debit Transactions

Rhea-AI Summary

Adyen, a global financial technology platform, has introduced Intelligent Payment Routing for US debit payments, an AI-based solution that optimizes both revenue and costs. In a pilot with over 20 enterprise merchants, including eBay, 24 Hour Fitness, and Microsoft, Adyen achieved an average of 26% cost savings with a 0.22% uplift in authorization rates.

The feature offers easy adoption, improved performance, omnichannel capability, and network agnosticism. It leverages AI to dynamically route transactions in real-time, selecting the best payment path based on transaction fees and authorization rates. Some merchants saw cost savings as high as 55% and authorization rate improvements up to 1.15%. One customer reported savings of $600,000 within the first 30 days.

Positive

• Achieved 26% average cost savings for merchants
• Improved authorization rates by 0.22% on average
• Some merchants saw cost savings up to 55%
• Authorization rate improvements reached up to 1.15% for some clients
• One customer saved $600,000 in the first 30 days
• Easy adoption with no additional code required
• Omnichannel capability for online, in-store, and in-app transactions
• Network agnostic, allowing for optimal routing across debit networks

Negative

• None.

Launching first to market, Adyen's new feature leverages AI to optimize debit transactions for both cost and authorization rates

SAN FRANCISCO, Sept. 9, 2024 /PRNewswire/ -- Adyen, the global financial technology platform of choice for leading businesses, today announced Intelligent Payment Routing for US debit payments, the only AI-based solution in the market that simultaneously optimizes and improves revenue and lowers costs. In a pilot of over 20 enterprise merchants — including eBay, 24 Hour Fitness, Microsoft, among others — Adyen achieved an average of 26% cost savings with a 0.22% uplift in authorization rates against earlier debit performance.

At a time when organizations are increasingly exploring fiscal efficiencies, Adyen's Intelligent Payment Routing ensures that enterprise businesses processing US debit transactions do not need to choose between cost, acceptance, or speed.

Benefits of Intelligent Payment Routing for US debit payments include:

• Easy Adoption: The feature does not require additional code or work, but quickly and easily transforms debit card payments into profit savings.
• Improved Performance: Increase conversion performance and acceptance while simultaneously reducing costs.
• Omnichannel Capable: Whether customers shop online, in-store, or in-app, the feature leverages cross-channel data to maximize profitable growth.
• Enables Speed: Businesses no longer need to compromise — including on speed as the feature does not impact processing speed.
• Network Agnostic: Adyen is able to route transactions across the least expensive debit network at the highest rate of approval, focused on performance uplift and cost reduction.

"One common way CFOs at the enterprise-level manage costs is by looking for savings in their payments processing," said Trevor Nies, Adyen's Senior Vice President and Global Head of Digital. "Payments are often seen as a cost center and not a revenue driver. We think that's a missed opportunity. By routing payments intelligently to the right card processing network, we can help our merchant partners improve both cost savings and revenue growth on their debit card transactions. There is opportunity for US domestic businesses to increase performance and for global businesses to enter the US market with more confidence."

US regulatory changes, effective July 1, 2023, mandates for all debit cards issued in the US to be branded by at least two unaffiliated networks. As a result, competition between networks leads to lower costs for businesses, but also increased complexity, and an opportunity to optimize for higher performance as well as cost.

Additionally, consumers are increasingly leveraging debit. Last year, according to an annual study of consumer choice by the U.S. Federal Reserve, nearly one-third of all payments, both in-person and online, were made via debit cards. From 2022 to 2023, the number of debit card transactions increased by more than 27%. Adyen's platform data, which naturally excludes cash as a payment method, saw debit transactions make up 58% of all US transactions this June.

"As debit transactions increase in popularity, the burden is magnified. We realized that by using AI within the Adyen platform, we could dynamically route transactions in real time and automatically select the best payment path based on transaction fees and authorization rates," said Nies.

Adyen customers saw an average of 26% cost savings. Some merchants saw cost savings as high as 55% and 52% with uplift in authorization rates as high as 1.15% and 0.69%. One customer saw savings as high as $600,000 within the first 30 days.

"Adyen's entire platform was built from the ground up in-house, so all merchants have to do is toggle on the feature to transform their debit card payments into profit," Nies explained. "This low level of effort for merchants is one of the many benefits of our single platform, one integration approach."

About Adyen
Adyen (AMS: ADYEN) is the financial technology platform of choice for leading companies. By providing end-to-end payments capabilities, data-driven insights, and financial products in a single global solution, Adyen helps businesses achieve their ambitions faster. With offices around the world, Adyen works with the likes of Meta, Uber, H&M, eBay, and Microsoft. Adyen continuously improves and expands its product offering as part of its ordinary course of business. New products and features are announced via press releases and product updates on the company's website.

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SOURCE Adyen

FAQ

What is Adyen's Intelligent Payment Routing for US debit payments?

Adyen's Intelligent Payment Routing is an AI-based solution that optimizes US debit transactions for both cost and authorization rates, achieving an average of 26% cost savings and 0.22% uplift in authorization rates in a pilot with over 20 enterprise merchants.

How much can merchants save using Adyen's Intelligent Payment Routing (ADYEY)?

Adyen (ADYEY) reported that merchants using Intelligent Payment Routing saw an average of 26% cost savings, with some merchants experiencing savings as high as 55%. One customer saved $600,000 within the first 30 days of implementation.

What companies participated in Adyen's Intelligent Payment Routing pilot?

Adyen's Intelligent Payment Routing pilot included over 20 enterprise merchants, with eBay, 24 Hour Fitness, and Microsoft specifically mentioned in the press release.

How does Adyen's Intelligent Payment Routing improve authorization rates?

Adyen's Intelligent Payment Routing uses AI to dynamically route transactions in real-time, selecting the best payment path based on transaction fees and authorization rates. This resulted in an average 0.22% uplift in authorization rates, with some merchants seeing improvements up to 1.15%.