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4 Key Business Drivers for Real-Time Payments Data

IR Team

Written by IR Team


COVID-19 is a global human tragedy that has caused significant economic disruption and has had a major impact on transactions and payment flows. But as the economy starts to rebound, albeit with regional variations in recovery, silver linings have begun to emerge.

Businesses are starting to see positive impacts from increases in overall global payment volumes from credit cards, debit cards, Account to account (A2A payments, contactless cards, as well as the explosion of eCommerce.

Debit card usage has picked up more than 20% since lows in March. A study of UK customers found that 51% plan to use credit cards more. A2A payments are on the rise; in Australia, transactions through digital wallets rose 17% in March compared to February, nearly triple the usual growth rate. Mobile POS payments are expected to show an annual growth rate (CAGR 2020-2024) of 21.4%. With customer’s fears of using cash during the pandemic, NFC card payments have seen significant rises as well. Visa reported that its overall contactless usage in the US grew 150% since March of 2019.

These payments methods are increasingly being used for eCommerce transactions. Government data from August of 2020 shows that eCommerce dollar volume totaled $221.5 billion, up 32% from the first quarter and 44% from the same period last year. eCommerce now accounts for 16.1% of total retail commerce, up from 11% last year.

One company that particularly benefited from the rise in eCommerce was Target, which saw profits jump 80% in Q2. Sales through Target’s curbside pickup service shot up by more than 700% in the second quarter from the previous year. Target sales fulfilled by its online delivery service grew more than 350% year over year.

What the New Normal Means for Merchants and Merchant Acquirers

With so many aspects of the business environment changing, merchants are struggling to adjust their business to the new normal as quickly and profitably as possible.

They must retool their technology to better understand and support newly popular payment methods, as well as the expansion of eCommerce. Even brick and mortar locations are being impacted. For example, merchants re-opening physical stores may find that with so many people now working remotely, at least some of the time, for the foreseeable future, traffic patterns have changed. Retailers need granular data on where the growth and profitability are declining and increasing to adjust their strategy.

Merchant acquirers and processors who can provide their merchant customers with real-time information on where business and transactions are moving, how that matches with profitability, as well as how each channel is handling the added transaction load will be able to provide a value-added service to their customers. Not only can the ability to provide payment data help merchant acquirers and processors attract and retain new customers, it can even become the next big revenue source for them in the face of declining merchant fees.

The following are key business reasons for merchant acquirers and processors to provide merchants with real-time actionable transaction insights.

1. Identify Trends and Patterns in Payment Data

Retailers are keenly aware of the need to provide a top-notch customer experience for both eCommerce and brick and mortar transactions. If a transaction fails, or even simply performs slower than average, customers are likely to jump ship to a competitor. A recent UK study found that 83% of consumers would shop elsewhere if they experienced poor website performance, with 37% of shoppers saying slow loading webpages would cause them to abandon the website.

Constant monitoring of website performance is particularly critical in the wake of COVID-19, where eCommerce platforms are suddenly being tasked with accommodating far more traffic than they were ever designed or tested to handle.

A real-time analytics solution can instantly inform retailers if a payment method goes down or if performance falls to unacceptable levels, so that the retailer can troubleshoot and fix the problem before it has a significant impact on customer experience.

In addition, merchants can further bolster detection of any website issues by evaluating behavior patterns for transactions over a specified period—say six months—to determine what behavior should be expected. A solution that then maps current performance/transactional volume to expected behavior patterns can quickly determine when behavior varies from expected patterns, so merchants can instantly identify issues that warrant further evaluation.

When a solution allows for activity tracking by region, merchant, and gateway, merchant acquirers and processors can bring highly granular analytics to each of their retail customers as a valuable, differentiated service.

2. Understand Changes in Revenue Distribution

Merchant acquirers are often created as a result of many acquisitions, which typically means they use many disparate and siloed payments technologies. Real-time transaction insights provide instant end-to-end visibility into all their merchant customers’ transactions as well as their source, whether from an eCommerce site or a brick and mortar store. By providing this information to merchants, merchant acquirers enable their customers to carefully monitor performance to ensure that eCommerce offers as good a customer experience as brick and mortar stores.

Merchant acquirers and processors can also give retailers insight into the details of every transaction—whether it was approved, declined (along with reasons it was declined), or had slow performance. As a result, merchants can easily see any trending drivers for declined transactions or poor performance and address them quickly. The right solution will even enable retailers to automate resolution for issues that can be predicted ahead of time to proactively safeguard customer experience.

3. Executive Level Visibility

Merchant executives today often rely on daily transaction reports, which means the data they receive is 24 or more hours old. Real-time transaction insights give executives real-time visibility into transactions and profitability across all terminals, stores, and channels. With this information, for example, executives can keep close tabs on the experience of their VIP customers to ensure they receive optimal service without any issues at all times.

Merchant acquirers delivering this executive visibility as a service can obtain a complete view of their entire business on a per merchant basis broken down by card type, region, method and more. They can provide specified information to their merchant customers in the from of KPI dashboards delivered via any web interface where it can be accessed from a desktop computer, laptop, iPhone, or iPad. The service can also provide escalation capabilities for specified VIP customers, from Tier 1 support, to Tier 2 all the way up to the executive level.

4. Track and Manage the Adoption of New Payment Types

With today’s uncertain business environment, it is difficult to predict what payment technologies will suddenly gain popularity. In the wake of a news report about a surge in COVID-19 cases, a customer who typically orders their latte at the counter of their local Starbucks, may suddenly opt to go through their Starbucks App and pick it up at the drive through. Such a switch in customer behavior would lead to a large number of transactions suddenly going through the store’s eCommerce platform. If servers were not designed to accommodate that surge, customer experience might suffer.

Real-time transaction insights give retailers visibility into the growth of individual technologies so they can see how the servers are responding, how users are experiencing that service, and can adjust the platform as necessary.

The merchant’s ability to adjust to changing payment types and the increased importance of the eCommerce channel depends on having instant, real-time visibility into what transactions are occurring on what channel and how well they’re performing. Having the appropriate real-time actionable insights can help merchants identify trends and patterns to inform strategic decisions. Merchant acquirers and processors who can deliver this data can open a whole new avenue for gaining competitive advantage and boosting the bottom line.

Topics: Banking Finance Payments Payment processing Real-time monitoring Transact

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