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Efficient Least Cost Routing & Payment Gateway Integration in Next-Gen IP PBX Software

There are many key features in today’s reliable and high-quality IP PBX software. Least cost routing (LCR) and integration with payment gateways are two extremely essential features IP PBX software must have.

The former ensures that the IP PBX software solution chooses the least expensive path to make calls while the latter enables businesses to automate payment collection, streamline billing processes, and enhance overall financial management.

In this blog post we will understand least cost routing in the context of IP PBX software, various challenges organizations face in ensuring least cost routing, and how sophisticated IP PBX software can help in overcoming the challenges.

Apart from that we will also discuss the importance and benefits of payment gateway integration in IP PBX software. Read on and thank us later.

Understanding Least Cost Routing (LCR) inz Context of IP PBX Software

In voice telecommunications, least-cost routing (LCR) is the process of selecting the most cost-effective (or the least expensive) route, way, or path to transmit phone calls. LCR algorithms can intelligently and cost-effectively route calls by considering factors such as:

Call destination
Time of day
Carrier rates

To give an example, if a telecom company in New York is looking for a route to Texas, it will evaluate the rates of all telecom providers operating in New York and handpick the provider that offers the least expensive rate to make the call.

In the context of IP PBX software, efficient LCR capabilities ensure that organizations can leverage the most cost-effective communication pathways without compromising on call quality or reliability. Even if an IP PBX system with sophisticated LCR feature saves one cent (or a handful of cents) on every call, the savings can be substantial over time.

Challenges Organizations Face in Implementing LCR and How IP PBX Can Overcome Those?

An organization that doesn’t use high-quality IP PBX software can face various challenges. But by leveraging the right IP PBX software, it can overcome all the challenges in a much more effective manner. We have listed some challenges and how the right IP PBX solution can help organizations in overcoming the challenges.

1. Large Routing Tables

As per a report, a majority of least cost routing tables have three destinations per dial code on average. That’s sizable. That means an average optimized least cost routing table for domestic US routing can have more than one and half million translations.

The right IP PBX software can automate the generating processes and update routing tables. The highly developed algorithms in IP PBX software can ensure that the routing tables are optimized and by doing so, it can address the challenge faced due to routing table size.

2. Jurisdictional Routing

A service provider must have two routing tables (one for intra-state calls and another for inter-state calls) for optimization of their least cost routing. Automatic Number Identification (ANI) or the calling party’s telephone number determines jurisdictional routing. With VoIP calls, however, ANIs can be invalid and that can lead to higher intra-state rates. Furthermore, major carriers might block calls without valid ANIs.

The right IP PBX software simplifies this by managing three routing tables automatically. It identifies calls within a state, between states, and those with invalid ANIs. By doing this, it ensures each call takes the cheapest route, whether within or between states, or even with invalid ANIs. This way, businesses can optimize their call costs without worrying about different routing scenarios.

3. Number Portability Correction

North America alone has more than 197 million ported phone numbers in today’s time. A sizable number of customers report that a large chunk of their calls are to ported telephone numbers. This can have an adverse effect on LCR. If LCR is based on the dialed telephone number, then a considerable number of calls will not be routed to the lowest cost provider.

This is where sophisticated IP PBX software can be useful to recognize ported numbers and adjust routing accordingly.  IP PBX software can use databases that track ported numbers and their new locations. By updating routing rules based on this data, the software ensures calls, even to ported numbers, take the lowest cost route.

4. Decoding Rates by LATA, OCN and Tier

LCR involves analyzing dial codes and the rates charged by carriers to make calls to those dial codes. But carriers don’t usually quote rates by dial codes. Instead, they use terms like Operating Company Number (OCN), Local Access and Transport Area (LATA), and Tier. Different carriers have different tier structures and there can be six to eight tiers for every LATA.

This is where the right IP PBX software can be extremely useful in deciphering OCN, LATA, and Tier. IP PBX software can use algorithms to convert OCN, LATA, and Tier rates to dial codes. By doing so, it not only automates the process of normalizing rates but also saves time and enhances accuracy.

Integration of Payment Gateways in IP PBX Software

Gone are those days when customers would pay businesses using cash or paper checks and get paper invoices after making the payment. In the digital age, digital transactions have become the new normal. As per Statista’s prediction for 2026, at 54 percent, digital wallets are going to be the most popular e-commerce payment methods globally followed by credit cards at 16 percent and debit cards at 10 percent. As per the 2023 Global Payments Report, digital wallets are the world’s fastest-growing and the most dominant payment method.

In such a scenario, payment gateway can play a key role in facilitating online transactions. Not only that, it can also help in making online transactions highly safe and secure. That’s why seamless integration with payment gateways is one of the most important features all IP PBX software must have.

Sophisticated and reputable IP PBX software have payment gateway integrations in their interface. By using the functionality, organizations can automate and streamline payments and billing processing, simplify invoicing, reduce administrative overhead, and improve overall financial management. Here are some key benefits of payment gateway integration in IP PBX software:

1. Automated Billing

Automated billing is one of the biggest advantages of payment gateway integration with IP PBX software. When IP PBX systems are integrated with payment gateways, generating invoices and processing payments become easy and effortless.

2. Convenience

Integration of payment gateways with IP PBX systems enhances convenience for customers. From the IP PBX interface, customers can easily pay to businesses and enjoy a superior user experience.

3. Real-time Reporting

Integrated payment gateways provide real-time visibility into payment transactions. This enables businesses to monitor all incoming payments as they happen and troubleshoot all finance-related issues instantaneously and more effectively.

4. Security

The contemporary payment gateways are extremely secure and highly compliant with industry regulations. Robust encryption and security protocols in IP PBX software can safeguard payment transactions.

All in All,

An average organization makes hundreds of calls, some even make thousands of calls, every month. Choosing the most cost effective path for making the calls can have a huge effect on its balance sheet. Even if it can save some cents on every call, then the monthly and yearly savings can be substantial.

It is also extremely important for contemporary organizations to integrate payment gateways with their communication systems as it can streamline payments, bill processing, and enhance overall financial management.

The right IP PBX software not only can help organizations find the least expensive route to make calls but it also can integrate with payment gateways and help businesses automate payments, invoicing and billing, enhance security, and monitor transactions in real time.

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