Payment Analytics

There are many types of data available today, which means more businesses can quickly build towards more sustainable growth. One surprisingly powerful source of information for merchants is payment analytics.

Not only can analyzing payments data shed light on key areas that help you save on costs, it can also provide you with the insights you need to grow revenue.

Here, we will discuss several of the benefits of using payment-related data to improve your business.

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Payment Analytics Defined

Payment analytics refers to the system (or systems) used to collect and analyze payments data.

There is a wealth of data created whenever a purchase is made, either in-store or via a website. Within each transaction, there lies information on what items were purchased, the time and amount of the transaction, location of purchase, what type of payment was used, and more.

When addressed through a payment analytics lens, this information can inform many important business decisions including staffing, merchandise purchasing and allocation. Plus, payment data can help businesses decide whether or not to expand its offerings for accepted payment types. Payment analytics can also include data on if the customer is new or repeat, as well as what their purchasing habits are.

What Metrics or Reports Can You Surface with Payment Analytics?

Payment analytics systems can help you track a number of payment-related metrics, including but not limited to:

  • Payment types and methods, so you can better understand your customers’ payment needs and preferences.
  • Transaction amounts and values, which tell you how much people are spending (and ideally) how to improve.
  • Transaction volume and velocity, to give you insights into how often people buy.
  • Chargeback rates, so you can reduce unnecessary chargeback costs and improve the customer experience.
  • and more.

How Can Businesses Use Information From Payment Analytics?

As you can see, payment analytics offers valuable, quantitative information into customer behavior. This insight into customer shopping patterns can be a key driver in making purchasing and merchandising decisions.

Payment analytics gives detailed information for businesses looking to expand which payment types are accepted.

Below, we’ll take a look at some of the benefits you can expect from effectively utilizing payment analytics.

Identify common payment methods

One use case is applying payment analytics to identify trends in commonly used payment types. Businesses may see trends in credit versus debit card usage and use that information to negotiate more cost-effective payment processing rates.

It’s also worth looking at emerging payment methods. For example, if you’re seeing an increase in NFC mobile payments, this could indicate that it’s time to invest in additional mobile terminals.

Examining payment type trends in your business can also help streamline your operations. Let’s say you’re in the realm of healthcare or professional services and notice that manually taking payments over the phone is taking a toll on your staff. That knowledge can prod you to introduce self-service payment portals so clients or patients can initiate payments online instead of calling your office.

Improve customer loyalty

Encouraging repeat business is just as important as gaining net new customers. Since most people either create an online profile for eCommerce purchases or use the same payment method time after time, it is easy to track when someone is a net new or repeat customer.

This information combined with the actual purchase history paints a picture that merchants can use to target their marketing efforts. Analyzing spending trends between new and repeat shoppers can also steer your customer engagement initiatives.

Let’s say you discover that the rate of repeat purchases is slowing down in your business. You can use that information to craft loyalty programs or customer retention initiatives to encourage existing shoppers to check out your offerings.

Identify payment trends across multiple channels and locations

Businesses with multiple locations or an omnichannel presence have even more data to process.  This further demonstrates the benefits of  payment analytics and data consolidation. This data can even be used to create unique heat maps, which allow you to quickly identify trends by store, region, online versus in-store, and more.

For example, you may discover that customers in certain locations prefer contactless credit cards while those in other cities gravitate more towards mobile payments. These insights can inform your decision on what types of equipment to purchase for each location, so you can ensure that customers can always use their preferred way to pay.

Rate of transaction failure and fraud prevention

Whether seeking to prevent fraudulent transactions, chargebacks or theft, monitoring payment analytics is an important step in risk management for businesses of all sizes. Flagging fraudulent in-store or online payments is just one form of standard information provided by payment processing companies. By paying attention to payment fraud metrics, you can take immediate steps to prevent and catch bad actors and thieves from wreaking havoc.

In line with this, Stax’s dashboard provides multiple data points for merchants to assess for fraudulent activity or failed transactions, so you can easily keep an eye on your business.

Optimize resource allocation

Paying attention to metrics like transaction volume will help you determine your business’ peak periods. This, in turn, can inform decisions around staffing and operating hours.

For instance, if you regularly see higher transaction volumes during the end of the month, you could schedule more shifts to accommodate those extra purchases.

Boost your revenues and profits

Using payment analytics to measure KPIs such as your average order value (AOV) or basket size can lead to better sales and marketing.

Let’s say you’re an online retailer who wants to boost your AOV. One thing you could do is test different upsell offers or promotions and track how they affect the values of your orders. Armed with the information, you can then optimize your website to entice shoppers to purchase more products.

Here’s another example: if you’re a service provider, paying attention to your high AOV clients can offer insights into which services are frequently purchased together. That information can then be used to create new packages or offerings, so you can serve clients better.

Improve the customer experience

Payment metrics like your chargeback rate can shed light on your customers’ post-purchase experience. Payment chargebacks often occur when shoppers are unable to return items or are unaware of your refund policies.

So, if you’re seeing higher chargeback rates for certain products, that could be a sign that you need to communicate your policies better or improve the post-purchase customer experience.

What’s more, chargeback metrics are great for identifying experience gaps and areas of dissatisfaction. Things like mismatched product expectations, subpar customer service, and poor order fulfillment practices can all contribute to chargebacks. By taking an honest look at these issues and their root causes, you’ll not only reduce chargebacks, but you’ll also create a better and more frictionless customer experience. (A win-win for everyone involved!)

Final Words

Leveraging payment analytics goes beyond monitoring whether or not you’ve been paid. You should also keep an eye on other payment-related KPIs and trends, including payment types, amounts, frequency, and chargebacks, among others. Doing so will enable you to gauge the health of your business, so you can find ways to improve.

Stax’s actionable insights and easy-to-use payment solutions deliver on just that. Stax’s payment analytics dashboard shows your key payment metrics, so you can get a better handle on your business performance.

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FAQs about Payment Analytics

Q: What is Payment Analytics?

Payment analytics refers to systems used to collect and analyze payments data. This data is generated whenever a purchase is made and contains information about the items purchased, transaction timing and amount, location of purchase, and payment method.

Q: What are the Key Metrics in Payment Analytics?

Payment analytics can track various payment-related metrics including types of payments and methods used, transaction amounts and values, transaction volume and velocity, and chargeback rates.

Q: How Can Payment Analytics Improve Business Operations?

Payment analytics can help businesses identify common payment methods and optimize payment processing rates. It is also useful for detecting trends that may help streamline operations. For instance, diagnosing areas with high manual processing can encourage the implementation of self-service payment portals.

Q: How Can Payment Analytics Enhance Customer Loyalty?

With the capability of flagging new versus repeat customers, payment analytics can facilitate personalized marketing efforts. Analyzing spending trends can also guide customer engagement initiatives. For businesses observing a decline in repeat purchases, insights from payment analytics can shape loyalty programs or customer retention schemes.

Q: How Does Payment Analytics Assist with Resource Allocation?

Tracking transaction volume can highlight peak periods for a business, which can then inform decisions about staffing and operating hours. For example, understanding that higher transaction volumes occur at the end of the month can lead to more shifts being scheduled during that period.

Q: How Can Payment Analytics Help Spot Fraud and Prevent Transaction Failure?

Payment analytics is essential in risk management, enabling the flagging of fraudulent transactions, chargebacks, or theft. By closely monitoring payment fraud metrics, businesses can implement immediate actions to prevent fraudulent activity and mitigate damage.

Q: How Does Payment Analytics Contribute to Revenue Growth and Profit?

Businesses can utilize payment analytics to measure KPIs like average order value (AOV) and bundle size, leading to more effective sales and marketing strategies.

Q: What Role Does Payment Analytics Play in Improving Customer Experience?

Metrics like chargeback rate provide insights into post-purchase customer experience. Higher chargeback rates for certain products may indicate a need for better communication of policies and overall improvement of the post-purchase customer experience.

Q: What is the Function of Payment Analytics in Multi-Location Businesses?

For businesses with multiple locations or an omnichannel presence, payment analytics can aid in tracking payment trends by store, region, or channel. This data can inform decisions on what types of equipment to purchase for each location, ensuring that customers can always use their preferred payment method.

Q: How Do Systems Like Stax’s Dashboard Incorporate Payment Analytics?

Stax’s Dashboard provides actionable insights and easy-to-use payment solutions. It showcases key payment metrics, allowing businesses to get a better grasp on their performance. It also includes multiple data points for assessing fraudulent activity or failed transactions.