Payments: From cost-centre to efficiency-driver
Adyen explores how streamlining a payment process can create efficiencies throughout an organisation
When you go out to tender for a new payments service provider (PSP), you’re probably looking for the most cost-effective way of processing card payments. You’ll look for a payments gateway, you’ll look for a card acquirer, and you’ll look for a direct debit solution. And, while you might have several requirements, cost per transaction will be a key consideration. But none of this takes into account the much higher costs that are inherent with payments processing which is, conversely, also where the greatest gains are to be made.
These days, payments can be used to actively drive efficiencies in an organisation. It can streamline your processes, reduce your back-office costs, and ensure a better experience for your customers. Changing your payments provider is no longer about plugging new payments capabilities into your website; it’s about improving processes and ensuring the best results.
So what’s changed? In a nutshell, technology is better and faster. Having one technology partner looking after your entire payment flow from checkout right through to settlement means your payments run smoother. Your customers will find it easier to pay, you’ll spend less time doing the things you hate, and your internal stakeholders will be happy (especially your Accounts Clerk as they can stop ticking invoices).
Let’s break these benefits down step-by-step:
Did you know that 45% of consumers in the UK have abandoned a purchase because of a payment issue? And every time that happens, you pay. A payment issue can be anything from a poorly designed payment form, insufficient payment options, too many steps in the process, or redirecting to a third-party site that the customer doesn’t know or trust. This can result in delayed payments. You may also be faced with the cost of chasing the payment or the cost of the customer phoning your call centre. If that’s the case, the cost per transaction pales in comparison to the average cost per call.
In comparison, think about the payment experience you’re likely to find on a commercial ecommerce site. Checkout pages are well laid out, look great on mobile, and have popular payment methods like Apple Pay clearly displayed. Payments go through smoothly and, quite often, you haven’t even had to enter your card number. No need for manual intervention. Everyone can just get on with their day.
None of this needs to come at a premium. Modern payments technology is more efficient, which means lower costs overall.
Higher card authorization rates
25% of declined card transactions lack valid reasons (ever caught yourself saying: “But I have money in my account!”). Understanding why a payment fails should not be something you have to worry about. You can leave all that to your payments provider. The right algorithms will automatically detect which payments should be retried within milliseconds, reducing your number of failed transactions without any need for manual processes.
Staying secure and compliant
It’s believed that fraud costs public services an estimated £21 billion every year. This represents a significant cost-saving opportunity if you’re able to get a handle on it.
Risk management is both a science and an art, and it’s important to find the right balance between letting legitimate customers pay and stopping fraudsters. The key lies in data. The more your risk solution knows about the person trying to pay, the easier it is to make the right decision. Legacy providers simply don’t have the data they need to make these decisions. And again, the cost savings associated with reducing manual reviews or dealing with chargebacks is significant. So it’s worth getting it right first time.
And remember, the Payment Services Directive (PSD2) becomes enforceable in the UK in September 2021 so you’ll need to ensure your payment service provider can keep you compliant.
Lower administration costs
Sometimes an attitude-shift is needed to make the most productive changes. Often we see change champions in organisations confronted with objections like: “We’ve done it this way for years.” Or: “This is how we pay for things.” Modern payment processors are technology platforms. And, with technology, comes automation. So it’s worth asking a payments provider how they propose to simplify your processes.
So, the next time you see the Account Clerk thumbing through invoices, consider: Is this really the best use of their time?
Explore how Adyen can help
Adyen processes payments for some of the world’s leading businesses and has built up years of experience around optimizing payments to increase efficiencies and drive revenue. Find out how Adyen’s technology can help you deliver frictionless payment experiences while streamlining your operations behind the scenes.
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