Merchants and retailers rely on payment service providers to facilitate their payments journey. While much is being said about the need to work with payment partners, it is important for merchants to understand what the benefits are and what they should be looking for in a payment service provider (PSP).
At this time of continuing economic uncertainty for merchants and consumers alike, it is imperative that businesses safeguard revenue. A PSP is a crucial partner to help navigate this process during a time where speed is key. Our recent report found that 91% of the 954 payment leaders in the UK and Germany estimated that they were experiencing revenue losses due to shortcomings in their payments systems.
Payment leaders are currently faced with significant challenges in ensuring that their payment processes are as optimized as they can be. In order to overcome the barriers to further growth, merchants must strategically drive innovation in order to improve performance and increase profitability. In today’s fast-moving landscape, a focus on the customer experience is key – merchants would do well in collaborating with holistic payment partners that can help on this journey.
Losing revenue due to inefficient payment systems
The pandemic highlighted the need to improve cumbersome processes and legacy infrastructure embedded in today’s payments systems. It brought to light that merchants needed to process transactions more efficiently and streamline the overall payments infrastructure to improve their profitability and offer a better experience for their consumers.
The current landscape for merchants in the UK shows warning signs of a slow recovery from the pandemic. Coupled with inflation and a potential economic recession, businesses across sectors are under great pressure to look inwards and optimize their efficiencies to safeguard revenue. emerchantpay found that businesses are haemorrhaging revenue due to the shortcomings in their payment gateway, with 91% of organizations reporting lost revenues.
This loss can be the difference between success and failure for many merchants, particularly with growing digitisation driven by consumer demands. That said, emerchantpay’s report found that by implementing improvements, the majority of merchants expect to see a 7-10% uplift in revenue should they plan to make the relevant adjustments in 2022. This means that we could potentially see a year of digital payments optimization across the board extending into 2023.
A complete transformation however, can be costly and complex to navigate and merchants need a PSP that can support innovation and efficiency, so that they can focus on what they do best – growing their business.
Roadblocks to high payments performance
To meet customer needs in the new, ever-changing payments landscape, businesses need to prioritise their technological capabilities and make informed decisions to support customer needs. Efficient use of data for example, is a key point of friction for many merchants in their payments optimisation journey.
Our research shows that although the majority of payments professionals are content with their data strategy, more than a third (36%) see a lack of data as a barrier to investing more in optimizing their payments. This can become a vicious circle for many businesses. While merchants and retailers are reluctant to completely overhaul how they use data, this could be the solution to obtain the right KPIs.
Relying on legacy systems and processes limits a business’ ability to make informed strategic decisions and demonstrate the ROI that would derive from investing in solutions which help drive data insights. With the right level of support from their payment providers, a robust business case built on hard payment data, and a real commitment to demonstrate the value of payments at a commercial level, businesses, large and small, can ensure that their teams are able to demystify payments performance and unlock more revenue.
The road to improvement
There are several barriers to improving the use of payment data. Among the most common of these is the burden of regulation and compliance which 38% of merchants cited as taking up a lot of resources and focus.
As widespread digitisation continues, the way the world is paying for goods and services is evolving at a rapid rate. Those that are slow to adopt new approaches are in danger of being left behind by their shifting consumer base who are now looking for more convenient payment methods and experiences.
In order to scale their payment systems in line with industry trends, merchants would do well in partnering with a PSP that can provide industry expertise and market insights that will both maximise conversion rates and drive business growth for merchants. The right PSP will work with merchants as an extension of the in-house payments team, to help modernise the way they do payments, today and for the future.