The role of a payment service provider in protecting revenue through times of economic uncertainty

 

Svetlio Todorov, Managing Director, emerchantpay

 

As overheads continue to increase and consumer spending declines, businesses must find ways to streamline processes and cut costs. Expertise in understanding the complexities of modern payments is going to be paramount and something businesses will be looking for to stay afloat, as we move into a recession.

Before any drastic decisions are made, businesses need visibility into how their existing payments processes can be improved. An efficient payments process can play a crucial role in helping to protect revenue – or even increase it.

According to emerchantpay’s report, ‘The Great Payments Transformation’, 36% of respondents admitted that a lack of data or poor quality data to base business decions is holding back investment in the optimisation of payments performance. This therefore highlights the valuable role that outside payments experts with high level insights must perform to help businesses make essential improvements.

This article outlines some of the key payment considerations for payment leaders to help businesses protect margins in times of economic uncertainty and beyond.

 

Avoid lost revenue by optimising the payments process

emerchantpay’s research showed that 9 out of 10 (91%) merchants felt they were losing revenue due to shortcomings in their payment systems. Over half (55%) predicted that they were losing up to 10% of turnover, with a third (36%) saying that 11-25% of their revenue was being lost. Conversely, if they made improvements, the majority of businesses expected to see an uplift of between 7-10% of revenue.

Payments experts should help their business customers to identify areas in their payment flow that can be optimised to protect against lost revenue and help increase sales. This might include automating manual processes to reduce the burden of admin on team members or making better use of data to streamline the checkout experience to boost conversion rates. A good payment service provider will be able to make recommendations and help businesses to implement changes.

 

Reduce fraudulent transactions

Payments fraud remains a major concern, with ramifications both in terms of cost, time and reputation. Payment service providers have a crucial role to play in supporting payment leaders to ensure their payments set-up is optimised to accept legitimate transactions and to decline those that could be fraudulent and could lead to chargebacks.

This is a balancing act, as transactions are sometimes declined for legitimate reasons, such as the customer having inadequate funds, or due to their card being reported as stolen. But by drilling down into available payments data, it becomes easier to identify fixes that could prompt higher levels of acceptance.

 

Integrate a variety of payment methods

With consumer attitudes and preferences changing almost daily, businesses must accommodate shifting demands and technologies.

In a survey of consumers conducted by emerchantpay last year, respondents were asked how they envisaged making payments in five years’ time. Debit card saw the biggest drop in usage; among millennials, this preference dropped from 37% now to 32% in five years, and Gen Z dropped from 34% to 27%. 15% of Gen Z and 11% of Millennials expected to pay by digital wallet as their preferred method in five years, with a small number of respondents (4%) expecting to use cryptocurrencies. What’s more, 38% of consumers said they felt encouraged to make a purchase when having BNPL as an option.

Businesses must therefore offer a range of payment options to suit the needs of different customer segments. With the right guidance, payments experts can help businesses to turn payments into a differentiator rather than simply offering operational advantage. The key here is giving choice.

 

Use payments data to improve decision making

Many businesses are failing to make the best use of their available data to optimise the payments process. emerchantpay’s ‘The Great Payments Transformation’ research shows that more than a third (36%) of payment professionals see a lack of data as a barrier to investing more in optimising their payments. This can become a vicious circle.

Data can be the key to remaining agile and deepening customer relationships. To be successful, payment providers must offer payment professionals the right level of support, helping them to develop a robust business case built on hard payment data and to demonstrate a real commitment to show the value of payments at a commercial level. Through this strategic collaboration, it will be possible to unlock actionable insights that can be leveraged to improve the payments experience and increase efficiencies, in turn helping to boost revenues and profitability.

 

Offer true value

An experienced payment service provider should be able to understand different business models and needs, to offer strategic one-on-one advice and tools that can help their business customers to safeguard revenue.

Without a strong and agile payment strategy, businesses will hemorrhage revenue due to poor customer experience, outdated and inefficient processes, and unnecessary risk of fraud.

By streamlining payments and making the most of data-driven insight, payments experts can help businesses unlock true value from their payment systems, helping to protect revenue streams, maximise profit and even to open up new opportunities for growth.

 

 

spot_img

Explore more