What's hiding in your payment data?

Emre Eryilmaz
Emre Eryilmaz

Realising the power of payment data: empowering finance professionals for business transformation

A company receiving payments is usually doing something right. However, this doesn’t necessarily mean that they have an optimal business. Typically, those which do, don’t just collect payments, they analyse them as well from their PSPs.

Why? Because these days payments offer much more than their monetary value. In fact, when sourced from PSPs they possess a host of invaluable data. With correct application, these data insights can result in businesses attracting even more revenue, clamp down on fraud, improve operations and more.  

With business-defining insights therefore being available within transactional data, companies are increasingly turning to finance teams to determine their strategies. For when marketing, sales, the board and more come knocking, this blog is here to share with finance professionals how they can deliver transformational data.

What is payment data and analytics?

Payment data is extremely varied, consisting of pieces of information which can be extracted from providers such as debit cards, BNPL schemes, and alternative payment methods. Later we will explore some of the most valuable pieces of intel these sources can offer.  

To make the most of them, payment analytics must take place. By definition this requires payment data to be collected, standardised and finally analysed from across all payment sources to create a complete picture of a company’s transactional data.

Data and analysis are equally important. One without the other will leave businesses in the same position which they started at. However, by combining the pair of them, businesses can take informed actions to improve everything from their revenue to customer journeys.

What benefits can be attained through analysing payments data?

In years gone by, payments were viewed in very two-dimensional terms. They came into a company at a certain rate and at a particular size. This was important to organisations in the past and always will be. However, with such limited information, few insights could be attained.

Nowadays, things have changed. Thanks to modern payment systems, the majority of transactions and surrounding software possess a wealth of information which through correct handling can elevate a company’s financial position. Reflecting the diversity of payment data, what this can result in is extremely varied as well. For instance, payment analysis can improve a business by:

  • Boosting authorisation rates – these can be impacted in numerous ways with a significant offender being what currency is used alongside certain payment providers. By assessing authorisation data, downfalls can be pinpointed and then rectified by selecting the right payment processors to work with in accordance with the activities of a company’s audience.
  • Inspiring marketing campaigns – there is a misconception that marketing teams operate wholly on creativity. In fact, their initiatives are informed by swathes of data. For instance, knowing what customers want to purchase and when is a crucial bit of knowledge which can be sourced from payments data and applied to marketing initiatives.
  • Enhancing customer journeys – payments might only be finalised once an order is placed but this doesn’t mean that the actions of prospective customers can’t be tracked. In fact, by doing so, potential issues within a checkout process can be resolved to increase conversion.
  • Stopping fraud – through breaking down the components of transactions, they can be cross-checked for anything suspicious. This can save businesses money, halt fraud and keep them compliant with industry regulations.
  • Improving forecasting – a company’s future activities are determined by having a detailed understanding of its past successes. Accurate cash positions through payments analysis are therefore a must to produce reliable forecasting which will lead the way and instil trust in investors.

Clearly, payments data can inform and improve a lot of integral business activities to deliver better outcomes. So, what payment data should you be looking at in order to gain such advantageous developments?

What payment data should you focus on?

Traditionally, payments has been seen as a process with a start point and an end point. Consequently, the only data point for decades has been that which accounts receivable registers. Now however, payments is full of multiple touch points, presenting opportunities for new pieces of data to surface.

Typically, available types of data have gone from minimal to near overwhelming. Some however are more significant than others to certain businesses. Here is a selection of those which are universally valuable:

  • Customer Preferences – for any business, receiving payments from their customers is vital. Knowing how they can make it easier for their customers to do so is even better. Fortunately, in the world of payments, every transaction must be reconciled. This presents a perfect opportunity for payment preferences to be analysed.  

    For those who engage in manual reconciliation they might believe this to not be the case. After all, reconciling thousands of transactions by hand is incredibly arduous, leaving no time for analysis to then be conducted. However, analysing payments is conducive with the likes of Aurum. Not only does it automatically reconcile transactions in seconds, but it also pulls in transactions from every payment provider. As a result, Aurum fulfils compliance regulations whilst showcasing to finance professionals which of their PSPs are most frequently used by customers.

    Arguably, given that the customer is always right, this is some of the most powerful payments data which any business can access.  
  • Authorisation rates and response codes – in contrast to how usage of payment options demonstrate which methods are preferred by customers, authorisation rates and response codes highlight those which are most effective.

    This is important because even with huge advances in payments technology, failed transactions still occur. Whilst authorisation rates will provide insight into which providers deliver the most success, response codes are required to know why. Despite this, a staggering 65% of businesses don’t receive detailed response codes on failed payments. However, with intel on whether a customer does not have the correct funds, if their card has expired and more, payments operators and finance managers can tweak their acquisition strategies to aid their customers and ultimately their businesses. High-tech example actions include automation to notify customers of how they can resolve what went wrong during their attempted purchase, and employing AI which learns when to take money from clients’ accounts based on when they are most likely to have available funds.

    Ultimately, keeping an eye on such data is the least which marketing and sales will expect from finance functions. After attracting customers, nobody in a business wants there to be barriers stopping a sale from taking place.

  • Payment Source of Funds – offering open arms to any incoming payment might feel like a natural reaction; however, it is always best to be wary. Payments are unfortunately prone to fraud such as money laundering.  

    It is therefore always important to leverage any data which could be an early warning sign for potential fraud. One to regularly check is Source of Funds (SoF). By doing so foul play can be halted, stopping businesses incurring serious fines.

  • Checkout completion – some finance teams might claim to only be interested in assessing data once payments have been made. However, when the option is available to improve how many orders are placed, any finance professional should be interested.

    Checkout completion is therefore an immediate concern for both finance departments and those responsible for designing them such as marketing and UX teams. Whilst the latter might be more focused on aesthetics or brand guidelines, finance teams can offer objective feedback on whether a checkout experience should be revised based on what checkout completion data is telling them.  

  • Transaction fees – the world of payments is exceptionally congested with huge numbers of acquirers, gateways and more. This means that a lot of processes are reliant upon messy integrations functioning correctly, most of which take longer and cost more due to having to operate with other organisations.

    For instance, an acquirer which is used with a card made by the same company is far more likely to operate quicker than a similar interaction which operates via resources built by different businesses. It is also more likely to be cheaper. With this being the case, knowing which combinations produce cheaper transaction fees can therefore be a big money saver for proactive finance teams. Alternatively, for those who care about this metric but don’t have the time to act on it, new AI led solutions such as Patently now exist to make payments a less costly, smoother experience for businesses.

  • Geography – in contrast to how SoF assessment is typically applied cynically, reviewing the geography of where payments are made is usually a positive activity. This is because based on transactional volume it can reveal which markets are proving popular with a company’s offerings.  

    Furthermore, if an organisation reconciles their transactions with Aurum, they can ascertain which payment providers are most popular by geography too. Through Aurum’s world map dashboard, a granular level of payments by geography is therefore accessible, enabling strategic decisions to be made on which new markets to expand into and which payment providers to use in the process.

How can you mine and polish your payment data?

The importance of data continues to rise in every single industry. However, some players within them have moved faster to make data available to their customers. The first thing which finance professionals must therefore consider if they seek to become data-driven, is whether they work with companies who share the same appetite for data, especially the PSPs they work with.

Should your partners be data-savvy, this is a brilliant start but it will only get you so far. Most finance departments receive data from various sources, and this can cause multiple problems. With roughly up to 30% of a finance function’s data being siloed, it can lead to lengthy extraction processes, various data formats having to be matched and inevitable mistakes. Whilst it is never good to make any sort of error, those relating to transactions can be the most costly. Not only can it result in fraud, but it can also offset forecasting and even the protection of client money.

To overcome such issues, a platform which is built with compliance and financial accuracy in mind should be at the forefront of yours. As an automated reconciliation tool, Aurum delivers precisely that whilst also connecting to an exhaustive bank of APIs, ensuring that no matter where transactions might come from, they are ready for analysis.

A single source of truth

A company’s finances are the equivalent to a person’s health – it sustains them and helps them move forward. Knowing that their payments are in shape (data) and how to improve them (analytics) is therefore crucial.  

Optimise your payments and your productivity at the same time with Aurum. The perfect way to fast-track reconciliation and strategise through payments data is just a click way – schedule your personal demo today.

Emre Eryilmaz
Emre Eryilmaz

Business Development Manager

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