The roadmap towards streamlined and frictionless payments
Businesses around the world are moving towards an ever-demanding payments environment. Innovation, user experience, regulation, security and efficiency set higher expectations for merchants across all sectors. ‘The Performance Pulse’ is our latest whitepaper revealing all the pressures facing today’s payment leaders across the globe. In extensive research among five countries, more than 500 online payments professionals from various industries shared with us the barriers towards better and more efficient payments.
Key payments performance indicators
According to our extensive research, payment leaders have identified the following as the most important factors in optimising payments performance.
Efficient processing through the payment gateway
96% of payments leaders said that efficient processing through the payment gateway is the most critical factor that drives payments performance. A unanimous reply, we hear you say. A staggering 100% of gambling merchants seem to believe so, followed by 98% in forex and gaming, 97% in retail and 94% in travel. Efficient payment processing is the most important KPI when it comes to revenue growth and payments performance. A deeper analysis across countries showcases the same results. 99% of merchants in the UK and 96% of merchants in Sweden, to name a few territories, share the same view.
By default, a payment gateway authenticates the customer’s digital credentials before forwarding information to the payment processor. The right payment gateway helps online businesses protect sensitive online data from illegitimate fraudulent attempts in real-time, providing a buffer of encryption between the merchant and the customer. Read this article to find out what is a payment gateway and how it works.
Our research also showed that monitoring the payment gateway processing is the least audited area among the interviewed businesses. Less than half of organisations perform regular audits across this area. When it comes to countries, only 39% of merchants in Russia undertake at least monthly audits in this area. The UK and Italy share the first place, with 49% of organisations performing at least monthly checks. Results vary across different sectors, though. In forex, the percentage of merchants is as high as 52%, followed by gambling with 48% and retail and travel merchants who reach 42%. Gaming seems to be the sector where only 37% of merchants perform monthly analysis on payment gateway processing.
Analysing payments acceptance rates
Our extensive research revealed that 43% of organisations deem acceptance rates as a KPI of success. Across sectors, 60% of forex merchants use acceptance rates as a measure of payment performance. On the other hand, less than half of organisations in other sectors (42% in retail, 40% in gambling and travel) analyse acceptance rates to enhance payments performance. A mere 27% of merchants in the gaming industry regard acceptance rates as a decisive performance output.
Surprisingly enough, even though 70% of interviewed businesses use acceptance rates as a measure for payment performance, only 1 in 7 sees that their personal and team KPI’s align to the wider organisations’ objectives. Besides, the majority of payment teams have three or fewer people dedicated to analysing acceptance rates. 68% of these payment professionals regard this number as suffice.
Preventing fraud
Fraud management is a pivotal area in payments. emerchantpay’s research data showed that 85% of merchants across all sectors identify fraud and security risks as the primary payment challenge. However, a minor 24% of those organisations demonstrate satisfaction with analysing fraud data. Even more alarmingly, only 52% of travel merchants perform a monthly audit in fraud data, followed by forex merchants (56%), gambling and retail (60%) and gaming (61%).
Payments transaction fraud come in many forms. Account fraud, identity theft, chargeback fraud, even friendly fraud can be emerging threats for online merchants across sectors. New technologies enable merchants to more accurately segment customers by risk, facilitate genuine transactions and prevent false positives, while keeping fraud attempts at low levels. Fraud management, well-designed user journey and employing data analysis can enable online businesses to deploy effective solutions when combating fraud.
Why data analytics are key to payments optimisation?
Organisations that seek to move towards optimised payments will need to evolve their current infrastructure to provide long-term agility. Our research showed that only 27% of organisations across all sector describe their use of data towards payment optimisation as good or excellent. The majority of payment leaders think their organisation could increase revenues by better-leveraging payment data.
Assessing payment data is of strategic importance as it is the anchor for expediting payment efficiency and revenue growth. Before crunching numbers, merchants should take a step back and re-evaluate the customer journey. A business operating in various territories needs to consider the end user’s behaviour. Redesigning - when necessary - the customer journey to improve user experience is a concrete step to effectively detect and prevent fraud. The rise of mobile transactions, alternative payment methods, mobile wallets, to name a few, drive digitalisation. In other words, organisations across all sectors can use digital technologies and data to increase revenue and improve business processes.
Analysing payment data yields significant insights to optimise payment processing. Data is collected, analysed and utilised at various points in the transaction chain. This analysis could provide a better understanding of decline codes, average transaction values, geolocation where the payments were initiated, specific information about the device used, useful insights on the customers’ spending habits - only to name a few key data points. All in all, data analysis could have a positive impact on revenue growth and unlock benefits for end-users when action is taken. It may not be an overnight remedy, but it can be beneficial for businesses aiming to minimise loss exposure and enhance business processes.
In conclusion
This article explored each of the above vital scopes as stated by payment leaders across the globe. It also identified opportunities to overcoming these barriers to optimised payments to drive performance and revenue growth. We aim to encourage key payment stakeholders on aligning efforts to develop an agile performance strategy through efficient data analysis. emerchantpay’s specialists can help you implement a payment optimisation plan that achieves your goals and enhances the value of your payments chain.