Supercharge your bottom line with better payments data

Businesses are well aware of the value that data as a whole brings and invest heavily to unlock that advantage. Yet one function — payments — has been left relatively untouched by this data revolution.

Payments have typically been viewed as a cost center. This has led executives to focus on driving down the cost of payments rather than unlocking its strategic potential. But in today's digitized economy, an optimal payments strategy powered by rich data insights can offer a competitive advantage.

Take control of costs

The majority of businesses still have a big opportunity to cut their costs simply by accessing better payments data from their providers. Moreover, a significant opportunity to unlock innovation and growth remains pent up in high quality payments insights which, once tapped, will be a huge strategic boon to merchants. Wanting to unlock the opportunities that access to rich payments data provides is one thing. Having the ability to do so is another.

Let's take Europe's online retail sector as an example. Checkout.com recently surveyed over 550 senior executives at top ecommerce retail organizations and found that 59% aren't getting a transparent breakdown of the costs of payments. A further 67% are not receiving any fraud or chargeback analysis.

Without these critical data points, businesses are working in the dark. They cannot build accurate logic that encourages a customer to complete payment while still in session — such as automating a retry or prompting them to use a different card.

This matters because payments can become an expensive part of the business if left uncontrolled. For example, chargebacks alone can typically cost businesses between 0.7% and 1% of all their sales every year. A number made worse because estimates suggest an eye-watering 60-80% of these are fraudulent. Indeed, 62% of European retailers say that payments cost them 11% or more of their total annual revenue. And these costs have a genuine impact, affecting their ability to competitively price their products and free up cash to find new ways to grow revenue.

The good news is that these figures represent a sizable opportunity for merchants to turn losses into gains because good payments data can be the difference between payments as a cost and payments as a revenue driver.

Unlock more revenue with unrivaled payments performance

Spiraling costs are compounded by the revenue left on the table due to inadequate payments performance. Looking again at European retailers, Checkout.com research finds that only 31% have a payment authorization rate of 90% or more. That means a large number of customers are finding themselves unable to complete their purchase at the checkout.

This matters not only because customers are unlikely to retry after having their payment rejected, but because 33% of consumers say they've been put off shopping on a site permanently when their payment was incorrectly declined. These false declines deprive businesses of billions of dollars in sales revenue every year.

Again, the problem is understandable when we see how underinformed merchants currently are. Over 70% of European online retailers don't have access to raw response codes — the data points that tell merchants why a payment has failed.

Without these critical data points, businesses are working in the dark. They cannot build accurate logic that encourages a customer to complete payment while still in session — such as automating a retry or prompting them to use a different card.

This cycle of failed payments and lost revenue can be broken as soon as a merchant has the data transparency required. Trailblazers, like Deliveroo, Shine, Uber and Fartech, with leading edge payments partners like Checkout.com, have shown how knowledge is power and data is control. They can measure how a few percentage points in increased authorization rates equates to millions on their bottom lines.

Find a data-driven payments partner

The truth is, when it comes to accessing payments data, businesses are at the mercy of their providers. And many aren't equipped to provide merchants the data they need to cut costs and capture more revenue.

Merchants should look for a partner which is built on the latest technology and owns the end-to-end payment flow. Take decline codes, for example. These codes can be a rich source of actionable insights which can be optimized to decrease false declines and increase successful transactions. Some providers consolidate these codes to just a dozen categories, but transparency-first providers will often pass back this data in full. Checkout.com, for example, shares 150+ decline codes. This gives businesses access to the most granular payments data in the format they need it, when they need it.

It's also important that payments partners can provide expertise and dedicated support to help merchants understand their payments data and build strategies to optimize performance and reduce costs.

Make payments a long-term competitive advantage

Questions around competitiveness often come with the subtext of acting fast. And though it's right that businesses don't delay, they also shouldn't rush. Transforming payments from the cost of doing business to a competitive advantage is not achieved by a series of quick fixes. Instead, merchants should take a holistic approach and take time to find a partner for whom data insights and operational capabilities are inseparable. The result will be a competitive edge that is more profound, scalable and sustainable.

Get in touch with Checkout.com to see how we can free your payments potential.