Payments Blog • 6 MIN READ

Real time payment analytics: the linchpin of your payments system

Jamie Pearson

Written by Jamie Pearson

In today's digital age, the payments industry is increasingly driven by information and data. Card issuers and acquirers are concerned with gaining better insights into customer behavior. Retailers want a deeper understanding of customer spending patterns.

Strategies and execution led by information and payments data can improve profitability, optimize revenue and cut costs. Without transaction data and analytics, we wouldn't be able to identify transaction performance issues, or detect fraud and other anomalies. Services would be disrupted, repair times and troubleshooting processes would also be derailed, and the risk of bottlenecks for services like online banking, POS or mobile payment networks would increase.

Real-time payment analytics tools allow us to take historical data and apply it to things that are happening to a business right now. This applies to payment processing or any online services in the payment space. Analytics are as important to the payment industry as any business. In order to improve your payment services and performance, it's necessary to understand customer profiles and behaviors - as well as having insights to providers' risk profiles.

What can payment analytics do?

Analytics gives us a mixture of traditional payment data analytics as well as insight into what's happening inside your payment system. By combining data about how your system is working with ad hoc reports, we have better insights into transaction data. This in-depth analysis can provide insights that will help a business provide better customer service.

For example, it's possible to take a glimpse at the normal pattern of transactions flowing through your system and then see if something is happening that's not normal for this time of the day (or day of the week). From there, we can provide customized alerts that let you know that you might want to pay attention to the issue before it becomes a bigger problem.

To turn payment data into valuable information and provide value-added services, as well as differentiate in the marketplace, card issuers, acquirers and retailers must have advanced reporting tools to highlight the KPIs.

Detecting Normal Patterns

Historical data can help to detect patterns within a business that are typical with payment systems. At the start of the business day, for example, card payment systems might show a slight spike in transactions. The volume will grow steadily over time until it peaks at midday and eases off towards the end of the workday. There may also be a small peak near closing hours while everyone is going to the ATM to withdraw money.

This is a relatively simple example of a pattern that's easy to detect. The power of realtime analytics comes from finding correlations between different points of data. If you can pinpoint times of day where there are bursts in transaction decline rates, that could sometimes be an indicator of fraud attempts. You might not be able to find out for sure unless you know the patterns of your system and look at different metrics together. It might be a combination of transactions, time of day, and opening/closing times of particular merchants. The more you know the patterns, the more you can detect things that aren't normal.

How payment analytics can help a business

Payment analytics for card issuers

Today's payment market is crowded. Established card issuers and entrants to the market need flexible solutions that help them to manage every card type including credit, debit, prepaid and commercial...through every stage of the lifecycle. Payment analytics puts solutions in place, giving issuers the opportunity to innovate and define their products more dynamically.

Payment analytics for merchant acquirers

In a rapidly changing digital and globalized world, cross-border acquirers and retailers are now faced with processing digital and in-person payments from everywhere in the world. Acquirers are now required to provide more flexibility and transparency on pricing, and also connect with multiple local and international schemes. Acquirers are also under pressure to optimize processing costs and commission structures. Payment analytics help acquirers to adapt their systems to accommodate any merchant structure as well as increase product distribution and merchant sales.

Payment analytics for retailers

Retailers are at the mercy of consumer behavior and the speed at which it's progressing. With contactless payments, e-wallets, online ordering and other emerging platforms, retailers are seeing the need to reduce costs associated with electronic payments, and also offering customers a means of payment that's both secure and convenient. Payment analytics help retailers to track customer behavior, both through online ordering and in-store, leading to a better understanding of what they need - which in turn leads to an increase in customer satisfaction.

Payments analytics for fraud monitoring

With transactions coming from multiple systems and multiple channels at any time , issuers and acquirers need to mitigate the risk of payment fraud. This means monitoring and authorizing transactions coming from multiple systems and channels at any time of day. This creates challenges for issuers and acquirers who may need to make the decision to block authorizations in real-time. Analysis will help to alert customers of suspicious transactions or behavior.

Every business needs payments analytics

A definitive report by Worldpay, on the art and science of global payments shows some interesting payment statistics and insights into world transaction trends. Analytics tool are important because they help a business measure, view growth and make decisions all the way through the payments chain.

Businesses need to clearly understand the importance of collecting and analyzing data. There are many analytics tools available, but the right analysis helps you extract the relevant information that suits your environment. From there, you can use that information operationally to improve the performance of your system. It helps to know your payment environment—that way you can tie the historical data back into the real-time transaction flow. You'll be able to detect abnormalities while they're happening rather than having to wait until you run analytics at the end of the day.

Key takeaway

Payment analytics are important in every sector of the payments space. The proper monitoring tools need to be in place for any business. IR's solutions can help make the difference to any business in the payments space. As the payments industry continues to evolve, providers must contend with new competitors, emerging technologies, regulatory challenges, increasing customer demands, as well as the ever-increasing risk of fraud.

So whether your environment is on-premises, in the cloud or hybrid, IR can offer monitoring and troubleshooting solutions, and make optimizing complex payments environments a breeze.

Topics: Payments

Subscribe to our blog

Stay up to date with the latest
Communications, Payments and HP Nonstop
industry news and expert insights from IR.

We're committed to your privacy. IR uses the information you provide to us to contact you about our relevant content, products, and services. You may unsubscribe from these communications at any time. For more information, check out our privacy policy.