In 2024, more businesses will turn to payment optimisation to accelerate their revenue. Payment optimisation is the process of streamlining and improving payment systems to ensure efficient, cost-effective, and secure transactions. This process includes selecting the best payment methods, reducing processing fees, maximising conversion rates, and enhancing the overall payment experience.
Declined payments, checkout complexity, security concerns, and a lack of personalised and localised payment options are all common reasons for cart abandonment. Our research found that 70% of all drop-offs happen after the customer enters the checkout flow and USD 260 billion in annually lost sales are recoverable through payment optimisation.
False declines have also emerged as a serious payments-related revenue drain in ecommerce, costing USD 443 billion every year and far outweighing the cost of true fraud. Furthermore, the decline of legitimate transactions can often cause irreparable damage to a business’s reputation, with consumers choosing to shop elsewhere in the future.
Payment optimisation emerges as a critical solution to these challenges. By implementing an integrated payment system, businesses can consolidate their transactions across various channels, simplifying the management process. Additionally, sophisticated payment platforms are equipped to handle the complexities of international regulations, providing businesses with the necessary tools to compliantly expand their operations globally. In essence, payment optimisation not only streamlines the transaction process for consumers but also strategically positions businesses for sustainable growth.
That’s why in a world where transaction efficiency is not just desired but required, the choice of payment processor becomes crucial. Payment optimisation done right takes a holistic approach, implementing a range of tools at each stage to improve the payment journey, ultimately increasing approval rates and accelerating revenue. These stages include:
Pre-transaction optimisation tools are designed with strategic foresight, integrating advanced rules to enrich and augment each transaction message.
For example, transaction compliance can be complex and lead to declined transactions if not properly addressed. Having a partner with the technology and expertise to navigate the nuances of transaction messaging and compliance can increase authorisation rates and improve customer experience.
Smart routing can help reduce declines and transaction costs by selecting the optimal path for each transaction. An acquirer-agnostic solution that can route based on multiple factors like transaction amount, currency, payment method, and type can provide limitless possibilities to optimise acceptance rates, transaction costs, chargebacks, and risk. As critical as the technology is the need for expert, human-led support to ensure you get the maximum revenue benefit.
Intelligent re-try tools can reclaim declined transactions, increasing authorisation rates, and revenue.
For example, a decline recovery tool automatically resubmits declined transactions using custom rules tailored to your business. Empowered by insightful analytics, this technology can help capture every possible transaction for ultimate conversion success and increased revenue.
Analytical tools such as real-time reports, processing comparisons, and case management are pivotal in enabling businesses to identify opportunities for increasing revenue and minimising lost sales. By providing instant insights into consumer behaviours, businesses can tailor their checkout journeys more effectively, enhancing customer trust and retention. Additionally, effective case management not only ensures efficient dispute resolution and reduced chargebacks but also bolsters customer satisfaction and loyalty.
Over the next decade, the landscape of payment optimisation is expected to undergo significant transformations, driven by advancements in technology and shifting consumer preferences. One of the foremost developments will be the increasing integration of artificial intelligence (AI) and machine learning algorithms. These technologies will enable a more sophisticated analysis of payment data, leading to highly personalised and efficient payment experiences for both businesses and consumers. Additionally, the rise of blockchain technology is poised to revolutionise payment systems by offering enhanced security and transparency, particularly in cross-border transactions, which could dramatically reduce the time and cost associated with international payments.
The trend towards a cashless society is expected to accelerate, with digital and mobile payments becoming even more prevalent. This shift will require businesses to adopt more agile and integrated payment systems to cater to the evolving preferences of their customers. Payment optimisation solutions will not only need to be efficient and cost-effective but also robust in terms of security and compliance, as businesses navigate a complex web of global financial regulations and heightened concerns over data breaches.
Ultimately, the future of payment optimisation lies in its ability to adapt to these technological advancements and changing market dynamics, offering seamless, secure, and cost-effective payment experiences that meet the needs of a rapidly evolving digital economy.
This article was originally published in The Paypers’ Global Payments and Fintech Trends Report 2024. The report compiles insights and expertise from leaders representing companies across the financial services spectrum and it delves into the latest innovations and trends in payments and fintech across key markets worldwide.
Jasper has 15 years of commercial experience within a diverse range of companies. As Vice President of Commercial at Nuvei, Jasper is currently building out his business development team across EMEA and is looking forward to having conversations about how Nuvei could help support businesses across the financial services industry with next-generation payment technology.
Nuvei is a Canadian fintech company accelerating the business of clients around the world. Nuvei’s modular, flexible, and scalable technology allows leading companies to accept next-gen payments, offer all payout options and benefit from card issuing, banking, risk, and fraud management services. Connecting businesses to their customers in more than 200 markets, with local acquiring in 50 markets, 150 currencies, and 680 alternative payment methods, Nuvei provides the technology and insights for customers and partners to succeed locally and globally with one integration.
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