How to recover lost revenue with cascading payments

If you’ve clicked on this article, you’re probably losing revenue due to declined transactions.

You want to set up cascading payments to recover lost revenue and improve your customer experience.

But you might be hesitant to invest the time and engineering resources into setting up (and constantly managing) cascading payments in-house. 

In this article, we’ll tell you more about how cascading payments work, and introduce you to a solution enabling you to set them up and manage them in just a few minutes—no coding required. 

Ready to set up cascading payments without any code? Book a call with our payment experts. 

What you need to know about cascading payments

Cascading payments is automatically retrying a failed or declined payment with a backup payment processor. It’s an elegant solution to recover otherwise lost revenue and improve the user experience, subsequently having a positive impact on your conversion rates and bottom line. 

When a customer or merchant initiates a transaction with cascading payments, it’s first attempted with the primary payment processor. If that payment fails and is recoverable — for instance, a soft decline due to a “Do Not Honor” code or issuer downtime — the failed transaction is automatically retried with a secondary provider. 

The challenge of setting up cascading payments in-house

While cascading payments offer an effective way to boost authorization rates and recover revenue, setting them up in-house comes with several key challenges. Here are three hurdles you’ll face when building cascading payments without the right infrastructure:

• Setting up multiple payment service providers (PSPs) takes too long: By definition, you’ll need secondary payment processors to enable cascading payments. However, each new PSP means lengthy contract negotiations followed by extensive integrations that could take months to complete. While the contract negotiations are unavoidable, the integration can be simplified using a unified payment infrastructure that has already built these integrations.
  
• Building logic to cascade payments is complex: Cascading payments require sophisticated logic to route transactions between processors. Your system must accurately interpret decline codes—retrying transactions for soft declines (like temporary outages), but avoiding retries for hard declines or issues like insufficient funds, which can lead to fees from Visa and MasterCard.
  
  Because each PSP has its own set of decline codes, maintaining accurate routing logic becomes increasingly challenging as you scale. Without standardized decline data, you also lack visibility into why card payments fail in the first place, making it tedious to compare processor performance or optimize your routing strategy effectively.
  
• Increased 3DS friction hurts the customer experience: When cascading payments trigger retries, customers are often asked to repeat 3D Secure (3DS) authentication or re-enter payment details. This additional friction leads to higher cart abandonment rates, especially in high-risk or time-sensitive industries like travel or iGaming.
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A major issue is that most merchants are not PCI Level 1 (PCI-L1) compliant, meaning they don’t handle 3DS authentication themselves.

Instead, they rely on their PSP to capture card details and run 3DS. However, PSPs are not interoperable—card data and authentication results cannot be reused across different providers.

As a result, if a payment attempt fails and needs to be retried through another PSP, the merchant must ask the customer to restart the entire authentication process from scratch. This is a significant roadblock that cannot be easily fixed. The only viable solutions are:

• Becoming PCI-L1 compliant and implementing an independent 3DS solution
• Using a standalone vault/3DS provider
• Leveraging a solution like Primer that enables seamless orchestration
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By addressing this interoperability challenge, merchants can reduce unnecessary friction, improve conversion rates, and create a smoother payment experience for customers.

How to set up cascading payments with Primer

Every year, businesses leave millions of dollars on the table.

In 2023, false declines cost merchants around $157 billion in sales at risk. And while some of these declines are inevitable, many are recoverable soft declines. By implementing cascading payments, you can be confident that you’re recovering as much revenue as possible.

Fortunately, setting up cascading payments doesn’t have to be complicated or costly.

Primer helps you to recover that lost revenue by empowering you to integrate, manage, and optimize all of your payment systems in one place. We help to simplify complex payment processes so you can scale, adapt, and innovate faster.

With Primer Fallbacks, you can set up cascading payments in just a few clicks.

Simply decide which backup processors to use, and Primer will take care of the rest.

Here’s how it works: 

Add your PSPs in just a few clicks 

We take the engineering out of integrating with new PSPs. To connect a new processor (once you’ve signed your contract), all you need to do is:

1. Select the processor you want to add in the Primer Dashboard

2. Give Primer access to your processor account. This step varies depending on the processor, but you’ll see specific instructions within the Primer dashboard:

Routing cascading payments with Fallbacks:

To set up Fallbacks once you have your processors enabled, you use Primer’s simple drag-and-drop Workflows:

1. Create a workflow within the “Payment created” Trigger, the starting point for all your payment workflows within Primer.

2. Add the “Authorize payment” action to your workflow

3. Select the Fallback processor you want to use and assign a merchant account.

That’s it. Once your Fallback processor is set up, it will be automatically triggered during the authorization process if there is a soft decline. 

What about interpreting decline codes?

With Primer, you don’t need to reconcile or interpret different decline codes in order to apply the right payment logic. Primer’s unified mapping standard means that all processors have standardized decline codes.

Our Fallbacks feature is only triggered for soft declines in order to maximize revenue and minimize the possibility of fees. In other words, Fallbacks won’t reattempt failed transactions that will likely not succeed through a backup processor (hard declines).

Read more about the difference here: Decoding decline codes

Avoid wasted 3DS checks

To apply, manage, and optimize your 3DS strategies across all processors you usually need to edit the logic in each PSPs systems.

When cascading payments are triggered with this setup, 3DS results from one processor can’t be reused on a cascading payment with another processor. This is especially problematic for customer-present transactions in the context of PSD2: as customers may be forced to complete SCA twice in a single payment flow. This greatly increases friction and can lead to higher cart abandonment rates. 

Primer solves this problem by decoupling 3DS from any one specific processor. With Primer 3DS, the same initial authentication challenge results are re-used and sent to the backup processor across all stages of a payment flow. This means your customers don’t have to go through 3DS twice, minimizing the chances of cart abandonment. 

Learn more about enhancing your 3DS experience: Why it’s time to revisit your 3D Secure strategy.

Use Fallbacks as insurance—not your primary solution

Fallbacks protect your revenue by rescuing transactions when declines happen, but relying on them long-term isn’t ideal. With Primer, you can actively address the root causes of declines—by leveraging data-driven payment routing—so you rely less and less on fallback transactions.

Ready to try Primer Fallbacks? Speak to an expert to get started.

Use Primer to track authorization rates across your entire payment stack

Now that you’ve set up cascading payments, the next step is to make sure you’re actually getting the most out of your strategy. That’s where optimizing your authorization rates comes in.

Primer provides you with powerful tools to help you quickly pinpoint why certain payments fail, streamline troubleshooting across your processors, and proactively tackle issues before they impact your bottom line.

Here’s how:

Analyze all of your payment data in one place with Observability

When you work with multiple PSPs, it can be tedious to understand why payments are failing. You need to log into multiple dashboards, all of which are formatted differently.

This isn’t a problem with Primer.
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With Observability, you can unify all your payment data in a central dashboard to let you view authorization rates by processor, sort by decline reason, and detect spikes in declined payments and payment failures.

With 100+ visualizations, 30+ filters, and actionable performance insights, you can quickly:

• Spot patterns and trends in your payment data
• Generate reports on best-performing providers and recovery rates
• Get a granular view of each processor down to the BIN level
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With all your payment processing data in one payment platform, you can use A/B testing to analyze, optimize, and improve your payment strategy. 

Read more here:  A guide to payment routing: Everything you need to know

Use Monitors to stay on top of payment declines

With Monitors, you can set up real-time alerts for issues in your payment stack, including payment declines and failures. Monitors are simple to set up in the Observability dashboard, and easy to edit and delete.

Monitors let you set predefined thresholds for payment metrics and trigger an alert when a metric falls out of range. You can also assess your historical payment data, analyze trends, and make predictions to alert you whenever an anomaly occurs.

Once you’ve set up your monitors, you can receive notifications or trigger other related actions:

• Use Primer Emails to send a default message with a Primer header to your inbox when an issue occurs.
• Connect Monitors with other apps, like Slack and Mailchimp, to automatically reach out to your team or customers in the case of an outage or other issue.

Looking for more ways to improve your payment authorization rates? Learn more: 5 ways to improve your payment authorization rates 

How Banxa used Fallbacks to recover over $7 million in revenue 

Banxa is a leading crypto infrastructure platform that lets anyone easily buy and sell crypto. To strengthen its payment performance and better serve its customer base, Banxa partnered with Primer to centralize and simplify its payment management.

By quickly adding additional payment processors and enabling Primer’s Fallback functionality, Banxa significantly improved its authorization rates and captured revenue from transactions that otherwise would’ve been lost.

“In the first half of 2024, we recovered over US$7 million in revenue using Primer’s native Fallback functionality. Enabling Fallbacks in Primer’s Workflow was seamless, requiring just a few clicks. Primer’s dataset and decline code mapping efficiently targeted transactions likely to succeed with an alternative processor, immediately boosting our revenue and improving customer experience.”

— Greg Rikkhachai, Head of Payments at Banxa

Read the full case study to see precisely how Banxa deployed Primer to centralize their payments, implement Fallbacks, and drive substantial revenue growth.

Recover more revenue with Primer Fallbacks

Cascading payments are a crucial way to maximize your payment revenue and prevent transactions from falling through the cracks, but the logic it takes to get the most out of them is complicated and time-consuming.

With Primer, setting up Fallbacks takes just a few minutes and can help recover revenueyour business that would otherwise be left on the table. 

Reach out to learn how Primer can capture more payments and keep more customers.