Uncovering inefficiencies that block business growth for merchants
The payments ecosystem has drastically evolved in the past two years; shifting consumer expectations, emerging payment methods, regulatory updates and proliferating fraudulent activity are just a few of the many factors payment leaders need to be wary of when designing their payments strategy.
For our latest report, The Great Payments Transformation, we surveyed over 950 payment leaders and decision makers across multiple verticals such as gambling, travel, airlines, eCommerce and hospitality in Germany and the UK. Join us as we deep dive into the blockers that hinder merchants from accelerating their payments performance and how revenue slips under unoptimised payment systems. We also highlight what’s needed to transform their business strategy and uncover lost revenue. To illustrate the untapped potential, our report unveils that a 5% increase in revenue thanks to improved payment performance could uncover up to £5 million in lost revenue for a business with £100m+ turnover.
Poor payments performance makes a dent in revenue for organisations
Our survey revealed that payment data is a critical component in informed decision-making and any lack or shortcoming can negatively impact payments performance and profit margins. Our research found that the majority of organisations are content with their data strategy. However, one in three organisations (36%) deem shortage of data as a limiting factor to investments in more streamlined payments. Interestingly, the process of making strategic data-informed decisions differs across countries. More than a third (37%) of UK merchants said their data usage could be improved, with this figure rising to 38% in Germany. This suggests that investing in solutions that can yield actionable data insights is a crucial step to higher payments performance and business success.
Simultaneously, while more than half (57%) of respondents are willing to adapt their commerce and broader business strategy to today's digitalised age, some of them have pointed out further roadblocks they need to sidestep so to excel. Key detriments to optimal payments performance for merchants across countries involve changing regulations and compliance (38%) for the time and focus they require as well as shortage of in-house resources and skills (34%).
From an industry perspective, a lack of talent is a palpable concern for almost half (42%) of payment professionals in gambling. This could be because the sector requires talent that’s armed with the niche experience and specialist skills needed to tackle challenges distinct to it – from licensing complexities to new jurisdictions, and so forth.
What's more, 91% of payment leaders surveyed cited inefficient payment systems (e.g. pitfalls in their payment gateway) as a catalyst to revenue losses. Hospitality has been reportedly inflicted the most, with 46% claiming 11-25% losses due to inefficiencies. Precisely, failing payment gateways cost a minimum of £1 million a year for more than half (54%) of the largest organisations with turnover of £100 million+. This is also evident for more than a third (39%) of merchants who acknowledge that they are losing a minimum of £11 million. But the situation doesn’t have to be all doom and gloom. Having a robust payment infrastructure in place paired with ad hoc advisory from an experienced payment service provider (PSP) will allow merchants to deliver maximum value to their organisation and overcome these obstacles.
New payments strategies in the making
No doubt, optimising payments strategies can result in major commercial benefits to organisations and establishing a strategic partnership with a trusted and experienced PSP can help facilitate that. Interestingly, a whopping 69% of payment leaders are either unsatisfied or flexible enough to work with a new PSP. This implies that as the payments landscape evolves, having a PSP that understands their business model and needs is pivotal. This way, merchants will realise that investments in resources for monitoring and interpreting data will enable them to rectify errors, such as decline codes, to boost acceptance rates and mitigate the risk of fraud.
When it comes to considerations for the right PSP, our survey uncovered that rates sit low in the priority list for merchants. By contrast, integration options (29%), a range of global payment options (28%) and personable 1:1 support (25%) are the top criteria merchants in online retail expect their PSP to meet for the business' sustainable growth.
Great Payments Transformation is under way
Shifts in consumer expectations cannot go unnoticed for the significant effect they have in business operations and processes. According to our research, projections for the next two years indicate that 53% of payment leaders who make all the relevant adjustments will likely see spikes of 4-6% in revenue, with an additional quarter (25%) witnessing 7-10% increase. A trusted PSP is crucial in how merchants can get past the barriers explored in this article by crafting robust, future-proof strategies tailored to the local payment preferences of their customers.
emerchantpay is here to support merchants with navigating the rapidly evolving payments ecosystem. With a successful track record of 20 years in the industry, we don’t only offer leading-edge, bespoke payment solutions for businesses of any size. We also equip merchants with the data and technology driven to elevate their performance in line with today’s modern economy. This way, they can rest assured about their payment systems’ efficiency and profitability.
Download your copy of the Great Payments Transformation today:Contact us today and learn how you can adapt your business strategy to shifting payment preferences for optimal performance and higher revenue.