Connect with us

Banking

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

Published

on

 

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.

 

 

Banking

How Banks Can Boost App Innovation, Speed and Compliance

Published

on

By

Steve Barrett, Senior Vice President of International Operations, Delphix 

As new finance and banking applications disrupt the market each day, and customer expectations around speed, privacy and quality continue to grow, financial organization CIOs and DevOps teams have to innovate quickly to bring new apps and updates to market, while remaining strictly compliant to a myriad of regulations. DevOps innovation in financial services requires fast access to accurate, compliant test data, and as anyone who touches the industry knows, data privacy is a highly complex, critical process woven into the everyday world of finance.

Banks and financial services organizations collect vast amounts of data, but using that data for innovation can be challenging due to the vast size and complexity of test data. These challenges can inhibit the adoption of new and transformative technologies and hinder innovation if they are not addressed head on. To address these challenges, many organizations are integrating the use of highly innovative test data management (TDM) tools within their DevOps ecosystems. DevOps TDM provides access and delivery of lightweight, compliant data for DevOps initiatives including digital transformation, software upgrades, cloud migration, artificial intelligence and machine learning (AI/ML), and analytics.

Data – the last automation frontier

Historically, application teams manufactured data for development and testing in a siloed, unstructured fashion. Over time, large IT organizations began consolidating TDM functions to take advantage of innovative tools to create test data. With the rise of modern development methodologies like DevOps and CI/CD that demand fast, iterative release cycles and end-to-end API-driven automation, legacy TDM approaches are often no longer sufficient.

Reliance on a traditionally manual, ticket-driven, request-fulfill model creates time drains during test cycles and slows the pace of application delivery. Consider the payments industry, in which agile technology companies using optimized DevOps processes can release new code hundreds of times per month. In contrast, traditional banks with slow IT ticketing systems may take months to release new features. These manual, legacy TDM approaches exist in contradiction with modern DevOps practices and CI/CD processes that depend on automation and fast feedback to development teams.

TDM for the DevOps Era

DevOps teams rely on TDM to evaluate the performance, functionality and security of applications. However, while processes including storage, compute, and code have all been automated, data has eluded the reach of most DevOps toolchains.

Now, DevOps TDM can help accelerate app releases and increase compliance.by automating the delivery, provisioning, and compliance of data. These practices provide both development and testing teams with data APIs, including the ability to refresh, rewind, bookmark, group, tag, branch, and share test data, to accelerate DevOps productivity and improve application quality. DevOps TDM also includes copying production data, and the masking (anonymization) and virtualization of data through the DevOps pipeline, which helps accelerate app releases and increase compliance.

And as the pace of application development quickens, so does the pace of privacy regulations and efficiently ensuring compliance in DevOps has become a significant challenge for enterprises. Non-production data used for testing software applications, reporting, and analytics can contain up to 80% of an enterprise’s sensitive data. To solve this, DevOps TDM provides integrated data masking to de-identify personally identifiable information (PII) and other sensitive data in non-production environments, eliminating the risk of sensitive data exposure.

The World Quality Report 2022-2023[1] by Capgemini stressed the importance of an enterprise wide approach to test data provisioning (a core component of TDM). The report states, “Over the years, with stringent regulatory and security requirements around data, organizations have increased their focus on provisioning test data safely and securely.”

The report shows that secure test data provisioning remains a challenge, with only 20% of respondents having a fully-implemented enterprise test data provisioning strategy in place to address security and compliance requirements.

Data is the catalyst to innovation

Automation is fueling myriad digital transformations within the financial services sector, but without the right data, these application innovations cannot succeed. DevOps TDM can help further accelerate DevOps initiatives by automatically delivering fresh, complete, and secure test data wherever and whenever it is needed, in minutes. With DevOps TDM, banks and financial institutions can innovate faster, reduce time-to-market for updating legacy applications, and accelerate development and testing of disruptive fintech.

 

[1] Source: https://www.capgemini.com/insights/research-library/world-quality-report-wqr-2022/

Continue Reading

Banking

Is traditional business banking the best option for SME finance squeezes?

Published

on

By

Airto Vienola, CEO, AREX Markets 

The pressures facing business and personal finances alike have been well documented.

Stories are now starting to emerge about how smaller enterprises around the UK – which make up well over 90% of the companies in the country – are coping with that mounting stress. The picture starting to emerge suggests, not well.

Personal borrowing is bridging gaps in business books

One survey released recently suggested that one in five of the country’s small businesses have taken out personal loans by the business owner to try to cover gaps in their incomes and profit margins. A further 43% said they were considering doing the same. This rush to secure additional funds by any means may be understandable for businesses feeling the pinch, but it’s neither sustainable nor savvy. Many of these enterprises are already burdened with additional debt from the Covid relief scheme, and given rising interest rates, soaring energy costs and rising cost of goods, taking on additional debt is not an attractive prospect. Add to that the fact that rates from traditional business banking providers are proving steep, smaller enterprises could be forgiven for looking to personal means to shore up the balance sheet. A recent study from members of the Federation of Small Businesses found that one in five small businesses are struggling to find business lending rates under 11%. To help these companies to survive, something clearly has to give.

Not all Alt-Fi options are equal

Alternative finance services have been proliferating in recent times, and yet almost half of small business operators have concerns about pursuing this option, despite actively seeking additional funding support. Clarity over terms and conditions is an often-cited reason for this reticence, which is only natural when undertaking proper due diligence on financial lending. This is a wise choice, especially as it has become so easy for business owners to quickly and simply access new services through embedded finance services, just a few clicks away on existing digital accounting and bookkeeping services. Many of these are still not clear about any detailed fine print, lengthy contract terms or potentially high fees, and yet these too can look like accessible and viable options to business owners facing mounting financial issues.So, it can be hard to pick the right provider without a lot of research. Those wary of the long tail of taking on debt should be particularly careful when it comes to business Buy Now Pay Later or BNPL offers, which are currently entering the UK market, though that isn’t to say that other alternative financing services won’t suit their specific needs whilst mitigating fears over risk.

A fresh perspective on an established technique

So, if debt should not be an option, and embedded finance can have downsides, where should SMEs turn if they don’t want to kick the can of cashflow problems just a few months down the road? One area to reevaluate, which has seen a tremendous shift given the fresh thinking from alternative finance is invoice financing or spot factoring. No longer the imbalanced option of last resort it was traditionally perceived to be, the option has become much fairer to the SME, in addition to providing a swifter and more flexible alternative. In years gone by, invoice financing was the purview of the banks, which led to low rates of return for businesses looking to unlock the value in their organisation, and often much better value flowing back instead to the lender taking on the risk. This is no longer the case. Likewise, invoice financing earned a bad reputation among some for tying businesses into lengthy contracts – another area which current services in the market have since addressed. Our service for example allows businesses the flexibility to access cash back on just a single invoice of their choosing – which could be the difference for struggling SMEs between dipping into loss or keeping the lights on.

One answer to the late payments problem?

Perhaps the most important area which services like invoice financing assist is overdue invoices – the bane of the British SME. Barclays claimed earlier this year that over a quarter of SMEs are finding late payments to be on the increase, and this was an already notorious issue for many business owners. Estimates show that SMEs on average have £6500 in unpaid invoices at any given time. Financing these invoices ensures that the cashflow of these strapped SMEs is healthier, gets the money back into the business without the concerns of lengthy payment terms or endless chasing, and certainly in our case, has no impact on the relationship with the other organisation. Our platform acts as a marketplace between SME and likely investors, with extensive insight provided to make sure that those investing in the invoice are matched to the right businesses. We take on the intermediate risk – removing any suggestion or potential concerns around unwanted debt collection, for additional business owner peace of mind.

While the pressures may be mounting on the SMEs around the country, one thing is clear. No business should rush into making long term financial decisions simply as the cashflow is drying up. Any savvy business would be well advised to make sure they understand the implications, short and long term, of any lending solution they look to employ. However, knowing that there are options and the business’ bottom line does not simply have to rely on traditional banking services, should provide business owners with a lot more options at their disposal to help them to face the coming months with greater cash liquidity confidence.

Continue Reading

Magazine

Trending

Business14 hours ago

Ransomware chokes COBRA: How AI-powered data analysis can support financial services’ plight

By Toby Butler, Financial Crime Solutions Manager at Ripjar   Ransomware attacks are on the increase in the United Kingdom....

Banking21 hours ago

How Banks Can Boost App Innovation, Speed and Compliance

Steve Barrett, Senior Vice President of International Operations, Delphix  As new finance and banking applications disrupt the market each day,...

Business21 hours ago

SVEA BANK ACQUIRES AREX’S FINTECH OPERATION IN FINLAND

AREX Markets, the data-driven FinTech company that drives financing costs down for SMEs and enables them to get paid quicker, has...

News21 hours ago

ICICI Lombard and AU Small Finance Bank announce Bancassurance tie-up

ICICI Lombard General Insurance, India’s leading private sector non-life insurance company, is entering into a Bancassurance tie-up with AU Small Finance Bank....

Finance21 hours ago

Crypto’s tipping point

Chris George, Senior VP of Product at Somo argues that Crypto needs to improve its scalability to be taken seriously Cryptocurrencies are...

Business4 days ago

Why Procurement is key in delivering your ESG strategy

By Edward Cox, Principal at Efficio Consulting   Environmental, social, and governance (ESG) has shifted from a niche to a...

Finance4 days ago

Skedadle to change the game for advertising with Currencycloud partnership

Currencycloud, the experts simplifying business in a multi-currency world, has partnered with Scottish start-up app Skedadle to provide its users...

Finance4 days ago

How financial services organisations can harness the power of low-code/no-code

By Joman Kwong, Strategic Solutions Manager, Financial, at Laserfiche   The UK’s erratic economy, and its spiralling cost-of-living crisis, have...

Finance4 days ago

SaaScada Top Five Predictions for 2023

From BNPL for business, to sustainability and financial inclusion, 2023 is going to be a year of change as the...

Business6 days ago

Hidden channel costs: how to find and tackle them

By Mark Wass, Strategic Sales Director, UK and North EMEA at CloudBlue     Growth for businesses will always be a...

Finance6 days ago

Is your business ready for finance automation?

Mari-Frances Bentvelzen, Business Head and General Manager of Global SMB at SAP Concur   As managers continue to drive their...

Top 106 days ago

The power of a proactive customer service

By Delia Pedersoli, COO, MultiPay   2023 is shaping up to be another challenging period for B2C businesses. While the...

Business6 days ago

Automation nation: Liberating workers from desks, data entry and the doldrums

Gert-Jan Wijman, VP of EMEA at Celigo.   Just when businesses thought the tough times were over, even more challenges...

News6 days ago

Protean and Fino Payments Bank tie-up to expand PAN card issuance services in India

Fino Payments Bank has tied up with Protean eGov Technologies (formerly NSDL e-Governance Infrastructure Limited), a market leader in universal,...

Business6 days ago

What is the True Cost of SMS Phishing?

Gemma Staite, Threat Analytics Lead   Cybercriminals will recycle attack strategies for as long as they are effective. In Fraud...

Technology7 days ago

Digital Asset Management (DAM) To Transform Enterprise Brand Management

Alexander Rich, Co-founder and CEO – Desygner    Rapid digital transformation fuelled by the pandemic has undoubtedly proven beneficial to...

Finance7 days ago

Cost of living: How to identify vulnerable customers

Ellie Engley is account director at REaD Group   In the current climate, the cost of living crisis is a...

Banking7 days ago

Is traditional business banking the best option for SME finance squeezes?

Airto Vienola, CEO, AREX Markets  The pressures facing business and personal finances alike have been well documented. Stories are now starting...

Business7 days ago

Breaking down communications silos to streamline the customer experience

Dave Tidwell, Head of Technical Pre-sales, DigitalWell   The pandemic has, without doubt, moved the goalposts when it comes to...

Business7 days ago

How growth can be a big challenge when a business becomes multiple entities

By Paul Sparkes, Commercial Director of award-winning accounting software developer, iplicit. Organisations don’t just grow in size – they also...

Trending