13 payment analytics tricks to outsmart a challenging economy

In an unpredictable economic climate, businesses need smart tactics to stay ahead of the game and keep their finances in check. Digging into payments data across multiple providers and markets - while finding those hidden gems - becomes a powerful skill. 

This guide will show you how to harness payment analytics to recover more revenue, better grasp customer behavior, fine-tune operations, and make bold decisions while tackling hurdles like cash flow management and sniffing out fraud.

What is payment analytics?

Payment analytics is the process of collecting, standardizing and analyzing data from various alternative payment methods and providers across debit cards, credit cards, BNPL providers, mobile and crypto wallets, and bank transfers. 

This data provides rich, actionable insights into their payments performance, operational efficiency and, as a result, revenue. By examining payments data, businesses can uncover patterns, trends, and correlations that inform strategic decision-making and optimize operations.

Insights across the entire payment stack allows companies to better understand what processors are working and which are failing. Streamline payment processes, identify potential fraud risks, and make data-driven decisions that contribute to overall growth and profitability, even in a challenging economy.

13 benefits of utilizing payment analytics

Businesses of all sizes can now be empowered with the power of payment insights. Here are 13 key benefits with some real-world examples:

1. Increased revenue

Providing an invaluable resource for businesses, payment insights tools can deliver a range of data that can help pinpoint revenue-increasing opportunities in the convenience of one, single platform.

2. Improved authorization rates

Payment analytics deliver real-time insights on performance of key metrics including the payment processor’s authorization rate by country. By understanding where authorization rates might be lower, you can make changes to improve them.

Improving payment authorization rates means businesses can increase their revenue in challenging times, but it can also ensure customers have a stress-free checkout experience. Additionally, better authorization rates can reduce manual interventions during checkout and decrease customer service costs. 

Discover 9 tips on how to boost your payment success here! 🚀💡

3. Reduced disputes and associated costs (including chargebacks!)

Disputes have multiple levels of cost, all of which incur a cost for merchants:

  • Inventory is lost - goods may have already been shipped and won't be returned

  • Original transaction amount is lost - assuming the dispute is not won by the merchant

  • Chargeback/dispute fee is levied - merchants can’t recoup this, regardless of the dispute outcome

  • Second-order effect - the 'health' of the merchant account (i.e. 'account standing') can be degraded if disputes start to add up, leading to lower auth rates

Merchants can gain better visibility into why chargebacks are being received. By pinpointing these causes, businesses can take targeted actions that lower costs and mitigate chargeback fees. This is essential in a challenging economy as multiple chargebacks can add up and create a big dent in your profits.

4. Reduced processor fees

Processor fees are charges that businesses incur when they accept payments from customers, covering the cost of processing credit cards and other transactions. These fees include interchange fees, assessment fees, and any additional costs associated with running the payment system. 

By having a single place to see all your processor fees, you can automate your preferred processor route and find the right balance between higher auth rates and lower costs.

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5. Support with business expansion strategies

Informed expansion strategies are super important for businesses looking to grow and thrive, particularly in challenging economic conditions. Payment analytics dish up handy insights that can help businesses spot promising markets or customer groups when considering expansion.

There are several ways payment analytics can contribute to informed expansion strategies:

  • Identifying growth opportunities - Transactional data can reveal patterns and trends in customer behavior, preferences, and spending habits, enabling businesses to identify markets with high demand for their products, as well as untapped customer segments.

  • Evaluating market conditions - helps businesses assess market conditions in potential expansion areas, including competitive landscape, regulatory environment and payment infrastructure.

  • Customizing offerings - provides insights into the unique preferences and needs of customers in different markets, helping businesses tailor their offerings.

  • Optimizing marketing strategies - By understanding the payment behavior and preferences of customers in different markets, businesses can develop targeted marketing strategies.

  • Assessing risks and challenges - helps businesses identify potential risks and challenges associated with expansion, including currency fluctuations, payment fraud, or cultural differences in payment behavior.

  • Measuring success - allows businesses to track and measure the performance of their expansion efforts, enabling them to evaluate the success of their strategies and make data-driven decisions to refine and optimize their approach.

By guiding expansion plans, businesses can make smarter choices when diving into new markets or going after fresh customer segments, boosting their odds of success and paving the way for steady growth.

Support future growth in new markets by using Primer’s Observability tool to evaluate transactions in your new locale.📊

6. Help to mitigate loss from outages & improve uptime

Every second matters. 62% of customers who experience payment failures during an online payment process will not return to the website to try again. 

Merchants often struggle with the lack of real-time insights into the complex payment and checkout process. With multiple potential failure points including the payment gateway, 3DS, and fraud detectors, issues can arise undetected which can be detrimental in uncertain economic climates.

Typically, merchants might not notice a problem until hours later. Then it could take even longer to pinpoint the exact cause, leading to revenue loss during the outage and a negative customer experience. Additionally, merchants may wait days to assess the impact of new changes, causing a slow rollout of updated payment strategies.

By thinking fast with outages, you can save thousands while maintaining the best possible customer experience.

7. Reduced cart abandonment

By seeing exactly when people are abandoning the checkout process, broken down by device, browsers, markets and more, merchants can make improvements to stop customers leaving before making a purchase.

Primer’s Observability tool tracks data across devices, browsers, and payment methods, and also provides tailored advice to inform what payment options should be available in specific regions or devices. 🛒

8. Greater fraud detection and prevention

Payments fraud is a real issue for merchants, and the issue seems to be growing amidst economic uncertainty - a recent study found that digital fraud attempts have risen by 122%. By analyzing transactional data, payment analytics can identify unusual patterns or activities that may indicate fraudulent behavior. 

Here's how payment analytics contributes to fraud detection and prevention:

  • Identifying unusual patterns - reveals anomalies in transaction data that could indicate potential fraud attempts like sudden spikes in transaction volumes, high-value transactions from new customers, or multiple failed attempts.

  • Real-time monitoring -  enabling businesses to detect and respond to suspicious activities as they occur.

  • Customizable rules - create and refine custom fraud detection rules tailored to their needs and risk tolerance. This ensures more accurate and efficient detection of potentially fraudulent activities to reduce false positives.

By tapping into payment analytics for spotting and stopping fraud, businesses can keep losses from dodgy transactions in check, keep their customers' trust intact, and make sure their payment world stays safe and sound.

9. Customizable dashboards and simple data visualizations

Monitoring and presenting data in a clear way is essential to track critical payment metrics. 

Delivering data in a flexible and customized way is perfect for daily reporting but is also beneficial for gaining stakeholder consensus on initiatives like improving customer experience. 

This can also provide both real-time and historical data to ensure you have access to all the insights you need at any given time. Scheduled reporting in our Observability tool enables you to see valuable information on demand, without having to tailor or filter it.

10: Cash flow management

To understand payment cycles and how customers handle payments, businesses can step up their cash flow game and cut down the chances of dealing with late or skipped payments. This is beneficial in a challenging economy as it allows businesses to keep finances steady and ensure funds are available for growth or financial hurdles.

Here are some ways to contribute to better cash flow management:

  • Understanding payment cycles - Payment analytics can reveal patterns in payment cycles, allowing businesses to better anticipate and plan for cash inflows and outflows.

  • Analyzing customer payment habits - Transactional data provides insights into the payment habits of individual customers or groups. Businesses can then tailor payment terms and conditions to better align with customer preferences.

  • Optimizing invoicing and collections processes - Payment analytics can reveal how to better charge recurring invoices to have a better chance of a successful payment. 

  • Forecasting cash flow - Payment analytics can help businesses create more accurate cash flow forecasts based on historical payment data, allowing them to anticipate potential cash flow challenges and take proactive measures.

11. Accurate revenue and cost forecasting

Payment analytics don't just enable a retrospective analysis of your sales; they also provide valuable information that can be used to forecast future performance. 

You can compare current trends to future trends, check on monthly growth, and see which markets are growing. With this kind of foresight, you can make smarter and more informed sales decisions and revenue projections.

12. Understand the lifetime value of customers

This is a game-changer when it comes to understanding the lifetime value of customers. By digging into transaction data, businesses can gain insights into how much revenue each customer generates over their entire relationship with the company.

 Here's how it works:

  1. Tracking customer spending - helps businesses track how much customers spend on each transaction, monitoring purchasing behavior to reveal trends.

  2. Analyzing customer segments - group customers based on spending habits, preferences and demographics. This identifies high-value customer segments that contribute the most to the company's bottom line.

  3. Calculating customer retention & churn rates - show how long customers typically stick around.

  4. Evaluating marketing and sales efforts - provide insights into the effectiveness of marketing and sales strategies, revealing which efforts are driving the most customer acquisition and retention.

By using payment analytics to understand the lifetime value of customers, businesses can make data-driven decisions to allocate resources, tailor marketing efforts, and focus on customer segments with the highest potential for long-term revenue growth.

13. Increased business agility

Boosting business agility is essential for ensuring your business can weather any economic storm, enabling you to stay nimble and react quickly to market trends, customer likes and industry shake-ups.

Here's how payment analytics contributes to business agility:

  • Real-time insights -  provide businesses with real-time data, allowing them to identify and react to emerging trends and patterns. This enables proactive decision-making and strategy adjustment to prevent potential issues and capitalize on opportunities.

  • Customer behavior analysis - analyze customer preferences and buying habits, bby helping businesses anticipate shifts in demand and tailor offerings to meet evolving customer needs.

  • Competitive analysis - shed light on competitor performance and market dynamics, providing valuable insights into what's working for other businesses and what needs improvement.

  • Streamlined decision-making - With access to accurate and up-to-date payment data, businesses can make quicker, more informed decisions. This allows them to rapidly adapt to changes in the market, seize new opportunities, and pivot their strategies.

  • Operational efficiency - identify inefficiencies in their payment processes, allowing them to optimize operations and reduce costs. A more agile operational structure means businesses can respond faster to market shifts and maintain a competitive edge.

Final thoughts

By harnessing the power of payment analytics data, you can uncover invaluable insights, drive decision-making, and maintain a competitive edge in today's ever-changing and uncertain market. From enhancing cash flow management to boosting authorization rates and implementing smart fraud detection, payment analytics equip you with the tools and knowledge you need to tackle business challenges head-on.

Embrace this powerful ally, and experience the difference it can make in your company's growth and success amid the economic ups and downs.

Good luck, and happy analyzing!

FAQs

What are the different types of payment processors?

There are hundreds of different payment processors available. Well-known processors include PayPal, Stripe, Worldpay, Braintree and Worldline.

Some payment processors operate in certain countries, or one country exclusively, while others operate internationally. Some only operate with particular currencies or payment gateways. This is why companies often need more than one payment processor

If you’re trying to find the right payment processor for your business, Primer's connections can help you explore different types of processors to match your needs. 

How is payment analytics related to payment orchestration?

Payment analytics is what helps businesses to visualize and understand their payment data and identify optimal transaction routes. Payment orchestration is the process of sending payments to those optimal routes. 

Analytics play an integral role in the success of orchestrating payments correctly, by helping to identify the best payment route to optimize for cost, conversion and fraud protection. 

Payment orchestration means integrating and managing the end-to-end payment process, including authorizing payments, routing transactions, and handling settlements. The payment orchestration process is crucial as it helps to integrate and manage full-scale payments, including the authorization of transactions and settlements. Payment orchestration platforms use automated transaction routing to automatically detect the best routes to send payments. 

If you’re ready to use payment analytics to improve your business processes and beat the challenging economy, we can help. Learn more about our payment analytics solution, Observability, and start your journey to making better decisions.