5 Reasons Why Payment Analytics is Essential for Businesses

A comprehensive view of sales-related data can reveal hidden opportunities to improve business performance. For example, payment analytics can help businesses understand why specific digital marketing campaigns are working, what products are gaining new customers, and what factors influence purchasing decisions. Detailed transaction information allows businesses to analyze trends at a granular level and identify abnormal patterns. This enables them to anticipate shifts in demand and react quickly to take advantage of new opportunities.

Reduced Risk of Fraud

Payment analytics is a valuable tool to help reduce the risk of fraud for businesses. It is far more cost-effective to prevent fraudulent activity than to investigate and prosecute a fraud case, and prevention should always be the priority. For example, if you notice that your business has high decline rates or high chargebacks, use payment analytics to help you find the root cause of the problem. This could be anything from poorly communicated payment instructions to an insufficient customer support team. With this insight, you can take action to address the issue and reduce the number of customers impacted.

Additionally, if you see that your business has a higher-than-usual number of chargebacks, this may be a sign of fraud. By using payment analytics, you can identify what attributes of transactions are most likely to lead to a chargeback so you can implement more robust fraud prevention safeguards. For example, many chargebacks are associated with a billing address on a different continent from the shipping address. You can take steps to improve your security measures.

Increased Profitability

Every payment transaction represents more than just a sale: it also represents the loyalty of a customer, the desirability of a new product offering, the results of a successful ad campaign, and much more. With the help of payment analytics, businesses can use this information to make better business decisions and boost profits. Payment processing programs with built-in payment analytics can provide clear visibility into a business’ payments environment in real-time, which helps prevent service disruptions and identify any potential issues before they cause revenue loss or brand damage. In addition, this insight can help merchants optimize their payment rates by determining the most effective region and country, payment type, decline code, BIN, and retry strategies to improve authorization, capture, and settlement rates. Data analytics converts complex, unstructured data from payment transactions into digestible charts and graphs that business owners can easily interpret. This enables them to quickly uncover invaluable insights and gain a competitive edge in an uncertain economy. The resulting operational efficiency and agility will allow them to weather economic shifts and maintain a steady course for long-term growth.

Increased Customer Satisfaction

Whether your goal is to increase customer satisfaction, boost conversion or improve the performance of a specific business process, payment analytics can help. Rather than relying on standard sales-related data, this type of analysis examines what’s happening within your payments system to uncover hidden insights that can contribute significantly to these goals.

For example, if you know that your average basket size steadily decreases throughout the day and then spikes at midday, this information can help you better schedule staff and inventory. Similarly, if your customers tend to choose a specific credit card, payment processing programs with analytics can identify these preferences and inform future sales strategies.

In addition, the ability to track patterns over time also makes it easier to spot abnormal activity that can indicate fraud attempts or other issues. Taking advantage of these insights allows you to address them faster so your business can avoid service disruption or loss of revenue. With the right analytics, you can get insights into your transactions and customers like never before.

Increased Customer Retention

Getting to know your customers is easier when you can access payment data. A reliable analytics process helps you identify patterns that can help improve customer retention and enhance a range of digital services, transactions, and interactions. For example, an analysis of the number of new, repeat, and churn customers over a period may show that you must offer different products or services. The granularity of payment data also makes it possible to assess the impact of e-commerce marketing initiatives on sales. This could be as narrow as determining the impact of specific marketing campaigns or as broad as evaluating the effects of competitor launches in your market. A vital feature of a quality analytics platform is the ability to analyze transaction data from multiple acquirers in one easy-to-navigate dashboard. This helps you to optimize your payment processes and increase revenue by lowering authorization, chargeback, and issuer rates. It also allows you to maximize your approvals by identifying regions, countries, and card types performing best and flagging periods during the day when transactions decline, which might indicate fraud attempts.

Increased Business Agility

Previously, accessing real-time payment data and using it for business insights was difficult. But with an integrated payment analytics program, you can quickly get answers to complex questions about your transactions, forecasting, and more. And these answers can lead to a much more agile business.

For example, if your customers tend to purchase a specific type of product in one location but see a high rate of fraudulent transactions elsewhere, integrating your payments with a fraud prevention service can let you know that something is amiss before a problem occurs. This enables you to take action, like calling the customer or emailing them to check on their order before they can potentially lose merchandise and money.

Global insights from embedded payment analytics also enable you to optimize your payments by reducing fees and increasing approval rates. It lets you easily compare processing costs for different countries and merchants while allowing you to make intelligent routing decisions to minimize false declines and optimize your payment mix. This leads to a more streamlined customer journey and increased revenue for your business.