Skill: leooooooow/payment-gateway-optimizer (version 1.1.0)

--- name: Payment Gateway Optimizer description: Compare payment processors on fees, conversion rates, and regional coverage to optimize checkout success rates. --- # Payment Gateway Optimizer Build a data-driven payment gateway comparison and routing strategy tailored to your ecommerce business model, transaction volume, target markets, and product category — covering fee optimization, conversion rate improvement, multi-gateway routing, and regional payment method support. ## Quick Reference | Decision | Strong | Acceptable | Weak | |---|---|---|---| | Fee structure analysis | Breaks down interchange, assessment, processor markup, and currency conversion separately | Lists total effective rate per gateway | Uses advertised headline rates only | | Conversion rate comparison | Analyzes authorization rates by card type, region, and transaction value bracket | Compares overall approval rates across gateways | Ignores conversion metrics entirely | | Regional coverage | Maps local payment methods, local acquiring, and currency support per market | Lists supported countries per gateway | Assumes all gateways work equally everywhere | | Multi-gateway routing | Defines rules for primary/fallback routing by card type, amount, and geography | Suggests a primary + one backup gateway | Recommends single gateway for everything | | Integration complexity | Evaluates SDK maturity, documentation quality, sandbox environments, and migration path | Notes API type and basic integration timeline | Ignores implementation effort | | Total cost modeling | Projects 12-month costs including hidden fees, FX markup, chargeback fees, and volume discounts | Estimates monthly cost at current volume | Compares only per-transaction rates | ## Solves - Overpaying on transaction fees due to wrong gateway choice for your volume tier and business model - Low checkout conversion caused by missing local payment methods in target markets - High decline rates from using non-local acquiring in international markets - Revenue leakage from unfavorable currency conversion markups - Single-gateway dependency creating unnecessary downtime and concentration risk - Inability to compare gateways apples-to-apples across all cost dimensions - Missed volume discount thresholds from splitting transactions across too many processors ## Workflow ### Step 1 — Gather Business Parameters Collect the core metrics that drive gateway selection: - Monthly transaction volume (count and GMV) - Average order value and value distribution - Target markets (current and planned) - Product type (physical, digital, subscription, marketplace) - Current gateway and pain points - Technical stack (Shopify, WooCommerce, custom, etc.) ### Step 2 — Map Payment Method Requirements For each target market, identify required payment methods: - Card networks (Visa, Mastercard, Amex, local schemes like Cartes Bancaires, iDEAL, Boleto) - Digital wallets (Apple Pay, Google Pay, Shop Pay, regional wallets) - Bank transfers and real-time payment rails - Buy Now Pay Later options - Local payment preferences and market share data ### Step 3 — Build Fee Comparison Matrix For each candidate gateway, calculate the true cost: - Base transaction fee (percentage + fixed) - Interchange-plus vs. blended pricing analysis - Currency conversion markup - Cross-border fees - Chargeback and dispute fees - Monthly/annual platform fees - PCI compliance fees - Payout timing and fees ### Step 4 — Analyze Conversion Performance Evaluate each gateway's impact on checkout completion: - Authorization rates by card type and region - 3D Secure implementation and smart exemptions - Network tokenization support - Retry and recovery capabilities - Checkout UX impact (redirect vs. embedded) ### Step 5 — Design Multi-Gateway Routing Strategy Create intelligent routing rules: - Primary gateway assignment by transaction characteristics - Fallback routing for declined transactions - Cost-based routing for high-value transactions - Geographic routing for local acquiring benefits - A/B testing framework for ongoing optimization ### Step 6 — Model Total Cost of Ownership Project costs across scenarios: - 12-month cost projection at current volume - Cost at 2x and 3x growth scenarios - Volume discount threshold analysis - Migration cost estimation (development, testing, certification) - Opportunity cost of conversion rate differences ### Step 7 — Create Implementation Roadmap Plan the migration or multi-gateway setup: - Integration timeline and milestones - Testing and certification requirements - Rollout strategy (percentage-based, geographic, or product-based) - Monitoring and alerting setup - Performance benchmarking plan ## Examples ### Example 1: DTC Fashion Brand Expanding to Europe **Context:** US-based DTC fashion brand doing $2M/month GMV on Shopify, currently using Stripe only. Expanding to UK, France, Germany, and Netherlands. AOV $85. Seeing 12% decline rate on European orders. **Step 1 — Business Parameters:** - 23,500 transactions/month, $2M GMV - AOV: $85 (range $30–$400) - Markets: US (80%), UK (8%), France (5%), Germany (4%), Netherlands (3%) - Product: Physical goods, no subscriptions - Current: Stripe (US), processing all international through US acquiring - Stack: Shopify Plus **Step 2 — Payment Method Requirements:** | Market | Cards | Local Methods | Wallets | |---|---|---|---| | US | Visa, MC, Amex | — | Apple Pay, Shop Pay | | UK | Visa, MC, Amex | — | Apple Pay, Google Pay | | France | Visa, MC, CB | Cartes Bancaires (60% share) | Apple Pay | | Germany | Visa, MC | SOFORT, Giropay | PayPal (50%+ share) | | Netherlands | Visa, MC | iDEAL (70% share) | — | **Step 3 — Fee Comparison (monthly at current volume):** | Component | Stripe Only | Stripe + Adyen EU | Stripe + Mollie EU | |---|---|---|---| | US processing | $42,800 | $42,800 | $42,800 | | EU processing | $11,200 | $7,840 | $7,200 | | Cross-border fees | $4,800 | $960 | $880 | | FX conversion | $3,200 | $1,600 | $1,440 | | Platform fees | $0 | $250 | $0 | | **Monthly total** | **$62,000** | **$53,450** | **$52,320** | | **Annual savings** | — | **$102,600** | **$116,160** | **Step 4 — Conversion Analysis:** - Current EU authorization rate: 78% (vs. 94% domestic US) - Projected with local acquiring: 91% EU authorization rate - Revenue impact: +13 percentage points × $480K EU GMV = ~$62,400/month recovered revenue - 3DS smart exemptions: additional 2-3% conversion lift on low-risk EU transactions **Step 5 — Routing Strategy:** - US transactions → Stripe (primary) - UK transactions → Adyen UK entity (primary), Stripe (fallback) - EU transactions → Mollie (primary for iDEAL, SOFORT, Cartes Bancaires), Adyen (card fallback) - Transactions >$300 → Route to gateway with lowest interchange-plus rate - Failed transactions → Automatic retry on alternate gateway with 30-second delay **Step 6 — TCO Projection:** | Scenario | Stripe Only | Multi-Gateway | |---|---|---| | Current ($2M/mo) | $744,000/yr | $631,680/yr | | At $4M/mo | $1,488,000/yr | $1,198,080/yr | | Migration cost | $0 | $45,000 one-time | | Break-even | — | 5.7 months | **Step 7 — Implementation Roadmap:** - Weeks 1-2: Adyen/Mollie sandbox integration and testing - Weeks 3-4: Payment method configuration and 3DS setup - Week 5: Staged rollout — 10% EU traffic to new gateways - Weeks 6-7: Increase to 50%, then 100% of EU traffic - Week 8: Implement automatic failover routing - Ongoing: Weekly conversion rate monitoring, monthly fee reconciliation --- ### Example 2: B2B SaaS with Subscription Billing **Context:** B2B SaaS platform billing $500K/month across 800 subscriptions. Mix of monthly and annual plans. Currently on Braintree. High involuntary churn from failed renewals. Customers in US, Canada, UK, Australia. **Step 1 — Business Parameters:** - 800 active subscriptions, ~2,400 transactions/month (including retries) - $500K monthly recurring revenue - AOV: $625/transaction (range $49–$2,500/month) - Markets: US (60%), Canada (15%), UK (15%), Australia (10%) - Product: Digital SaaS, monthly and annual subscriptions - Current: Braintree, 8.2% involuntary churn rate **Step 2 — Payment Method Requirements:** | Market | Primary Methods | Subscription Support | |---|---|---| | US/Canada | Visa, MC, Amex, ACH | Card-on-file, ACH recurring | | UK | Visa, MC, Direct Debit | GoCardless/BACS Direct Debit | | Australia | Visa, MC, BECS | BECS Direct Debit | **Step 3 — Fee Comparison:** | Component | Braintree | Stripe Billing | Stripe + GoCardless | |---|---|---|---| | Card processing | $16,250 | $17,250 | $13,800 | | ACH/Direct Debit | $480 | $640 | $320 | | Subscription mgmt | $0 | $0 | $150 | | Failed payment retries | $1,200 | $800 | $600 | | **Monthly total** | **$17,930** | **$18,690** | **$14,870** | **Step 4 — Conversion Analysis:** - Current renewal success rate: 91.8% - Stripe smart retries: projected 95.5% renewal rate - Adding Direct Debit for UK/AU: projected 97.1% for those regions - Revenue impact of reducing involuntary churn from 8.2% to 4.5%: $18,500/month saved **Step 5 — Routing Strategy:** - US/Canada card subscriptions → Stripe Billing with smart retries - US high-value (>$500/mo) → Offer ACH with discount incentive ($5/mo off) - UK subscriptions → GoCardless BACS Direct Debit (primary), Stripe card (fallback) - Australia subscriptions → Stripe with BECS Direct Debit where available - Failed card renewals → Dunning sequence: retry day 1, 3, 5, 7 with card updater **Step 6 — TCO Projection:** | Metric | Current (Braintree) | Optimized (Multi-Gateway) | |---|---|---| | Processing costs | $215,160/yr | $178,440/yr | | Revenue lost to churn | $492,000/yr | $270,000/yr | | **Effective annual cost** | **$707,160** | **$448,440** | | Migration cost | — | $30,000 one-time | **Step 7 — Implementation:** - Weeks 1-3: Stripe Billing migration (sandbox testing, subscription import) - Weeks 4-5: GoCardless integration for UK Direct Debit - Week 6: Card updater and smart retry configuration - Weeks 7-8: Dunning email sequence setup and testing - Week 9: Staged migration — new subscriptions first - Weeks 10-12: Migrate existing subscriptions in batches - Ongoing: Weekly churn monitoring, monthly gateway performance review ## Common Mistakes 1. **Comparing headline rates only** — Advertised rates exclude interchange markup, cross-border fees, FX conversion, and platform fees. Always calculate the effective total rate for your specific transaction profile. 2. **Ignoring authorization rates** — A gateway that is 0.3% cheaper but has 5% lower authorization rates costs far more in lost revenue. Always factor conversion into total cost analysis. 3. **Overlooking local payment methods** — In many European and Asian markets, local methods account for 50-70% of transactions. Failing to support them means losing the majority of potential customers. 4. **Using single-gateway architecture** — Single points of failure in payment processing directly impact revenue. Even a 99.9% uptime SLA means 8.7 hours of downtime per year. 5. **Not negotiating volume discounts** — Most gateways offer custom pricing above $50K/month. The difference between standard and negotiated rates can be 0.3-0.5% on every transaction. 6. **Choosing based on developer experience alone** — A beautiful API doesn't compensate for poor authorization rates or missing payment methods in your target markets. 7. **Ignoring payout timing** — The difference between T+2 and T+7 payout cycles significantly impacts cash flow, especially for high-volume businesses. Factor working capital cost into comparisons. 8. **Treating 3D Secure as binary** — Modern gateways offer smart 3DS with exemptions for low-risk transactions. A gateway that blanket-applies 3DS to everything will tank your conversion rate. ## Resources - [Output Template](references/output-template.md) — Structured gateway comparison and routing strategy deliverable - [Fee Calculation Reference](references/fee-calculation-reference.md) — Detailed fee structures and calculation methods for major gateways - [Regional Payment Methods Guide](references/regional-payment-methods.md) — Payment method coverage and market share by region - [Quality Checklist](assets/quality-checklist.md) — Comprehensive review checklist for gateway optimization deliverables


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