What is Payments Analytics and why would retail leaders want it?
Payments Analytics is about discovering the value embedded in payment transactions. It enables decision-making based on insight, better informing sales strategies and allowing merchants to be led by knowledge – not simply gut instinct.
Locked within every transaction is data that reveals who bought what, where and when and how they paid. Wrapped around this are details relating to processors, acquirers, and even fraud. By gathering, aggregating, and analysing data points, merchants can identify trends and patterns and make more accurate predictions based on their findings.
It’s a bit like having a ‘secret sauce’ to improve your bottom line – it can help you create better customer journeys, plan more effectively for seasonal spikes, or optimise processes while letting you make faster and more confident product, channel, business, and operational decisions.
Payment Analytics is an extremely valuable strategic tool, both in the board room for the C-suite as well as for anyone involved in sales and payments optimisation.
How does it help the payment experience?
Retailers use lots of different types of analytics to help keep their business on track and importantly ensure the best experience for their customers. However, the focus is often on the acquisition and conversion end of the sales journey. Payment data tells you exactly what’s happening at the point of purchase, at the precise moment the customer commits, and all the circumstances around it.
For instance, it can tell you the most popular times of the day for seasonal as well as everyday purchases, what customers are buying and how often. This can help merchants improve the customer experience, by identifying and helping to reduce multiple friction points and to better optimise digital and physical checkouts. It also provides both historic and real-time data to geo-target and tailor promotions, products, and services to ensure higher rates of success.
What makes it different from other types of sales-related analysis?
Merchants often focus on the very important metrics around basket size, average order values and other sales-related data. This tells you a lot about what’s happening in your sales channels, but it can miss valuable insights to improve conversion and reduce costs. That’s where Payments Analytics comes in. Not only can it support standard sales-related KPIs it also allows merchants to examine their payments systems to dig deeper into the operational factors that influence them.
It can show how well one acquirer performs against another - whether sales’ access varies by card type, and for domestic versus international cards. It can reveal if merchant category codes impact approval rates; or if customers in certain circumstances should be encouraged to use a different payment method. For online retailers, it may also flag whether the 3DS process is causing too many dropouts or if checkout friction is still high even with SCA exemption management. It can even tell if some acquirers are more sensitive to fraud risk; if the transaction amount has an impact on acceptance or whether some card issuers are enforcing SCA more stringently.
Effective Payments Analytics can answer these questions and more. Detailed visual analysis and drill-down capability can find approval problems and identify ways to address issues that otherwise can go undetected, turning hypotheses into facts so merchants can take appropriate actions that yield positive results.
Advanced payment analytics also help retailers in planning and formulating peak season strategies to properly meet customer demands and preferences by comparing and analysing sales patterns and payment trends.
How does Payments Analytics fit into the context of Payments Orchestration?
Payments Analytics is now a crucial part of any Payments Orchestration and optimisation strategy. Hyper growth, in online and mobile, means a well-architected, agile, and agnostic payments platform is vital to optimise omnichannel payments.
Optimisation is driven by many factors including payment type, geography, industry, and more. Payment Analytics allows each of these to be assessed and delivers access to reliable and accurate data on past and current transactions, so merchants can ensure intelligent routing, reduce false declines, and ensure the best payments mix for their customers. The results? A better customer journey and improved revenue.
Payment Analytics can also help smash silos and keep different functional teams better informed and in control of their payments systems using dashboards, reports, and alerts to deliver integrated, real-time data from multiple sources and channels. In this way payments data can be fed from orchestration into back-end CRM, order, and management systems to deliver well-orchestrated joined-up experiences that surprise and delight customers.
In the grander scheme of a payments strategy, what part belongs to analytics?
Merchants’ payments strategies are quite broad, covering aspects like cost, impact on business performance, implementation, provider selection, brand recognition and innovation, and the customer experience, to name just a few. But to be truly data-driven, it must be based on accurate payments analysis and insight. It’s why at ACI, our Omni-Commerce solution comes with integrated Payments Analytics to provide a single source of truth for merchants to draw insights and quickly and easily apply them to business decisions.
A well-developed payments strategy uses data to improve every step of the payments cycle, from customer sign up or check in to reporting and consolidation. It can also help merchants to deepen customer understanding to guide smarter and more confident decision-making and contribute to competitive advantage. Payment Analytics can also act as an early warning system, allowing merchants to spot issues that can cause false declines so they can be rectified before sales are affected and customers are lost. It can also flag potential fraud trends, simultaneously, safeguarding your brand reputation.
Can Payments Analytics help drive conversion as well as experience?
Absolutely! We’ve already touched on the valuable customer and business information captured in every single transaction. However, taking this to the next level, it can help you increase conversion and ensure return on investment by showing you what works and what doesn’t. Using ‘before and after’ data to show the impact and effect of change. For instance, how new products influence loyalty, the effectiveness of a new marketing campaign, or the influence of recent enhancements to the checkout process.
Sample Dashboard: Omni-Commerce Payment Analytics Tool Showing Comprehensive Payments Performance View
Is there a secret to ensuring merchants get the most from Payments Analytics?
Payment Analytics only works if you can access useable information and act on its findings. Simple tools, fast reporting and easy customisation of reports are vital if any solution is to be effective. Accessing comprehensive Payments Analytics, in a seamless and clear dashboard, is a prerequisite for success. Not only does it save time money and effort, but it also helps manage the complexity of multiple channels, systems and acquirers, and payments platforms.
About John Gessau
With over 20 years of experience in the payments industry, John leads the team that serves the omni-commerce needs of retailers globally, as part of ACI’s merchant portfolio team. His focus is on driving innovation and growth for merchants, and he is passionate about finding ways to enable them to deliver optimised payment experiences to strengthen both their brand and their bottom line.
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