Compressed Gases Supplier

A Top Supplier of Compressed Gases Reduces Interchange Qualification Levels With Redbridge

Challenge

After having done their due diligence in optimizing their interchange, the company engaged the services of Redbridge to help them address several challenges head-on:

• The first challenge was to audit the company’s acceptance environment to understand specific drivers of fees and better refine their acceptance practices.
• The second challenge was to meet top-down goals of reducing the cost of acceptance and implement industry best practices.
• The final challenge the company faced was uncovering new avenues of securing cost savings and providing a best-in-class customer journey.

Ready to meet the challenge, Redbridge embarked on the project eager to deliver results for its client.

Solution

Uncovering anomalies within the Interchange qualification

Redbridge conducted an extensive audit of the company’s operations and presented its findings. This allowed the team a unique vantage point into the company’s operations, uncovering interesting anomalies within their interchange qualification. Following our patented interchange optimization processes, we set out on diagnosing not only the cause, but identifying the solution.

During the audit, something unexpected surfaced: there was an issue with the interchange qualification that was apparent when the effective rate was shown over time. There was a clear dip at the time the client implemented steps to reduce its interchange expense, followed by a slow, but steady, increase punctuated with a sharp increase. Something was not right.

To determine the cause of the sub-optimal interchange qualification, one must follow a standard process for diagnosing the issue. In a fragmented industry, this process generally involves several different parties, all with different levels of visibility. In this case, the situation involved three parties: the company, the acquirer, and the gateway.

Following the process, we started investigating the usual suspects and methodically ruled many of them out. From our work, we determined that there was one clear problem and potentially one other. The large spike in sub-optimal qualification looked to be a potential bank identification number (BIN) recognition problem. In short, the gateway was not recognizing the card product type by the first six digits. Our initial thoughts were to solve this issue immediately with the gateway, as this fix would solve the entire problem.

The request for the fix was circulated to the gateway along with a series of supporting documentation. When dealing with technological partners, like gateways, it is often necessary to provide examples illustrating two things: that there is a very real problem, and that the client is not causing it.

The gateway resolved to quickly fix the error, which they also believed to be a simple BIN recognition glitch. Switches were thrown, BIN lists were updated, and the software was given a good reset. Within several days of checking daily interchange qualification, we could confirm that positive results. But something was not entirely right; not everything was fixed.

The company had two separate issues masquerading as one: one card brand saw optimal qualification return while another languished. This was not a setback. It only meant that the diagnosis was a bit more exotic.

After inquiring with the gateway and acquirer, it was clear neither party knew what was entirely happening. The Redbridge team continued the research, diligently reviewing sample after sample down to transaction level addenda.

We began to narrow our sample reviews, refining to just two card brand types. We noticed that one particular field on the transaction addenda was changing only some of the time. Since each card brand has a different set of qualifying criteria, it was more than plausible that this one field would allow perfect qualification for one brand while crippling another. Our confidence in this faulty field being the culprit was further bolstered by a previous run-in with it, albeit in a different context.

We carefully collated sample data to tell the story of the failing field. We needed to show the product owner –the gateway – where the field operated correctly, where it did not, and why they were likely not catching it. Remember, gateway providers are processing millions of transactions per day. Asking them why they did not notice something was wrong is like asking a farmer if they know how many weeds are in a straw bale; however, the data was clear.

Results

Failing gateway field is rectified, benefiting hundreds of businesses

Within days of submitting the evidence to the gateway, we were informed that the field we identified was indeed not performing as expected and that a software patch would be created to address the field.

In the company’s case, they utilized a specific software application managed by the gateway. The company was not the only user of this application; hundreds of customers also use this application. The software patch would correct this issue for all customers utilizing this software. After a few weeks, the company received news that the patch was tested, proofed and ready for release into the production environment.

Marked decreases in costs after one month

Once implemented, Redbridge checked daily interchange reports to verify efficacy. Success! Almost
immediately, qualification levels were brought into optimal ranges bringing about marked decreases in costs noticeable after just one month.