Is your payment stack hampering your business’ growth?


By Brian Gaynor, VP of Product & EU CEO, BlueSnap. 

It’s only natural for your firm’s requirements to change over time, especially when you have a growing business. Whether you’re expanding into new markets, boosting customer loyalty, or enhancing buyer experience, everything requires your business processes to be agile.

You may think this is stating the obvious, but many forget that payments play a massive role in your business’ profitability. So, if your payment processor is unable to adapt to your firm’s changing needs as you grow, you could find yourself struggling with data inaccuracies, improper payment reconciliation, revenue losses, and a weakened fraud prevention process.

It’s crucial that businesses spot the signs early, and pivot their payment stack in good time to ensure they don’t have to deal with these all-too-common issues. To help, here are three tell-tale signs to look out for if you suspect your payment stack is not able to keep up with your business needs.

Sign 1: You’re struggling to make sense of all your data

Payments can provide your business with a wealth of useful data and insights, and this data will ultimately help you increase sales and reduce costs. However, the sheer magnitude of information that comes from payments can make insight-mining somewhat overwhelming. 

Given that there are multiple data sources, currencies, and conversion rates involved, understanding this data can take a fair amount of valuable time. However, collaborating with the right payment partner can empower your company with the resources required to shorten the payment reconciliation process while also having the unified insights needed to make business decisions. 

Sign 2: Your business is unable to keep up with regional payment trends

When scaling a business, you are looking at a unique set of opportunities. You may also face a number of challenges, especially when competing with businesses that have a home-ground advantage. Remaining competitive goes beyond language and currency adjustments. Businesses entering a new market must tailor payment methods to suit local preferences.

While some global payment processors may support international sales through debit and credit cards, more and more transactions globally are conducted through alternative regional payment methods. This can include bank transfers, cash vouchers, digital wallets, and various online banking methods, depending on the region. For example, a report by Statista revealed that consumers in the APAC region tend to use digital wallets.

In addition to this, completing cross-border payments comes with a transaction fee, which can amount to up to 1% or more of the transaction value and potentially extra hidden charges for your shopper. As a result, many retailers are routing transactions through local banks to protect their profits, though on average, businesses operating globally rely on five different payment gateways to process cross-border transactions through local banks. 

However, the expenses associated with developing and maintaining these relationships, as well as integrating additional services like digital wallets and fraud prevention, can offset the benefits of processing payments locally. Therefore, selecting a payment provider with access to local banks and comprehensive features like fraud prevention and support for alternative payment methods through a single unified interface can offer significant time and cost savings. Ultimately, partnering with a payment provider that combines global expertise with local insights will benefit merchants seeking to expand their business in the long term. 

Sign 3: Your payment stack is not acting as a catalyst for sales

Our research shows that nearly half of businesses experience an authorisation rate of only 70%, leaving 30% of transactions being declined. Apart from incurring processing fees, this poses a significant setback to sales and adversely affects the overall customer experience - impacting revenue generation. 

Through payment orchestration, businesses can mitigate losses and bolster sales by employing intelligent payment routing. This system directs payments to the bank most likely to approve the transaction in real-time, considering variables such as currency, card issuer, local acquirer, and merchant category code. By routing transactions through a global network of banks, businesses can not only reduce cross-border fees and mitigate foreign exchange rates but also increase authorisation rates. 

In short, businesses need to optimise their payment stack to fuel growth and cater to consumers’ varied payment preferences. People across the globe prefer different payment methods and firms must be prepared to cater to them. This becomes easier with a payment partner that allows them to customise the services they receive and cater to multiple payment methods. It also reduces technical debt and cross-border fees, which maximises operational efficiency and revenue. 

In an uber-competitive world, these competencies can give your business an edge and boost growth. Business leaders can no longer afford to operate with an inefficient payment stack or they risk stagnating growth and being left behind as payment trends evolve.

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