Performance is set to become the next big battleground within the payments industry, as businesses in all sectors look to enhance customer experience and increase margins in response to market disruption and increased competition.
Research from emerchantpay reveals that as many as 85% of payments leaders predict that a greater focus on payments performance (including tools, analytics, skills and investment) over the next two years will increase their organisation’s revenues by between 1% and 10%.
Within some sectors, the potential impact of improved payments performance is even greater. 89% of payments leaders in the travel sector and 88% within retail expect to see revenue increases of up to 10% as a result of increased performance.
More than three quarters (78%) of payments leaders believe that deploying AI within payments systems will drive improved performance.
The Performance Pulse white paper identifies the number and variety of steps that payments leaders are looking to take to improve performance across all areas of their payments infrastructures. At the top of the list is minimising the number of steps in the payment user journey across multiple touchpoints, cited by 93% of payments leaders as having a significant impact on performance. This is followed by action to reassure customers around security and encryption on payment pages (92%), consolidating international payment providers (88%), incentivising payments teams around improved efficiency (88%) and optimising Merchant Category Codes (MCCs) to increase authorisation rates (87%).
New technology is also seen as an important catalyst for improved payments performance and, therefore, increased revenue. More than three quarters (78%) of payments leaders believe that deploying AI within payments systems will drive improved performance.
When it comes to measuring and evaluating payments performance, the most widely used metric is growth rates (deployed by 64% of organisations), followed by operational costs (46%), acceptance rates (43%), impact in revenue and profitability (39%) and conversion rates (37%). Other metrics include instances of fraud or impact of fraud and customer satisfaction.
only one in seven payments leaders (14%) has personal and team KPIs that are fully aligned to the KPIs of the wider business and to broader commercial objectives.
However, the research reveals a disconnect between the organisational drive for greater payments performance and the objectives and focus of those individuals responsible for delivering it. Remarkably, only one in seven payments leaders (14%) has personal and team KPIs that are fully aligned to the KPIs of the wider business and to broader commercial objectives.
Owen Tustin, VP Realtionship Management, emerchantpay, said:
“These findings really bring home the size of the opportunity for payments leaders to deliver significant commercial and financial results, through a strategic approach to payments performance. It’s evident that more and more businesses are recognising the importance of instilling a culture of payments performance and ensuring that they have the dedicated resources to ensure that performance is monitored, analysed and optimised on a consistent basis across all aspects of the payments eco-system.
This means having high quality skills within the payments team, or support from external providers, to analyse, interpret and present data back to the business in a coherent and accessible way.”
“These findings really bring home the size of the opportunity for payments leaders to deliver significant commercial and financial results”
The research revealed different priorities in driving payments performance across industries. Within the retail sector, there was a relatively strong emphasis on upskilling payments teams and aligning team objectives and incentives to overall payments performance. Within travel and gaming, the focus was weighted towards minimising steps in the customer journey across multiple touchpoints and, within gambling, there was an inclination towards A/B testing to fine-tune payment page design.
Payments leaders within Forex (foreign exchange) reported the highest expectation levels around the impact of AI on payments performance.
Tustin concluded: “We need to change the narrative around payments, from a tactical focus around ‘keeping the lights on’, to a strategic, business imperative, where performance is clearly aligned to overall strategic goals and KPIs, and payments teams are measured and incentivised around hard commercial metrics. As an industry, if we can get this right, payments performance will create a platform for payments teams to position themselves as more strategic and high-value functions within their organisations.”