Payment analytics is a process of measuring, analyzing, and tracking payment transactions to inform business strategy and improve operations.
Retailers, financial institutions, and e-commerce companies use it to understand complexities like:
- how customers pay for products or services,
- which payment methods are most profitable,
- Why transactions fail
- where customers are paying for their purchases,
But that’s not all. Below, we discuss the far-reaching pros of payment analytics for a business.
5 Ways Payment Analytics Unlocks New Business Potential
Payment analytics helps you expand your business in the following ways:
1. Track payment patterns across different markets and channels.
Payment analytics allows you to track payments made in different markets or channels in real time so that you can adjust your strategy accordingly based on these findings.
For example, if there is an increase in payments made through credit cards at certain times of the day or week, then it may be wise to run promotions at those times.
This will enable you to reach out to more people at once rather than having a single promotion, which might not impact everyone equally well due to their location or bad timing.
2. Learn the most preferred payment options.
Payment analytics provides you with information about your customers’ payment preferences, allowing you to reach out to them with the most appropriate offers. This may help you increase sales volume and reduce customer churn rate.
3. Spot new clients and retain more customers.
Payment analytics helps you identify new prospects who are potential customers for your business. This information can be used in email marketing campaigns or other marketing channels to attract more customers and retain existing ones as well.
4. Reduce the number of failed transactions
When you use analytics to monitor your payment flows and identify trends, you can reduce the number of failed transactions and improve customer experience.
If a transaction fails, it may be due to any number of reasons — from an invalid account number or card expiration to insufficient funds or network issues.
Tracking these possible issues in your system can help you mitigate them before they impact your business. For instance, if you see that a high percentage of transactions are failing, this may indicate that you’re missing a critical piece of information that needs to be captured before the transaction can succeed.
5. Maximize your ROI
For example, if you’ve been charging $5 per transaction and are seeing a 10% ROI (which would be good for any business), but your competitor is charging $10 per transaction and earning 20% ROI, then maybe their pricing model is better suited for your business.
An analysis like this will tell you whether or not it’s worth revamping your pricing strategy or if it’s best to keep things as they are to maximize return on investment (ROI).
In a nutshell,
Payment analytics can help you extract information from payment transactions to analyze the usage patterns, volume, and other key performance indicators (KPIs) of various payment methods.
Therefore, missing out on analytics leaves you in the dark slowing down your growth opportunities significantly.