Here’s how businesses can grow through a strategic payments set-up

Growing a retail business can be an arduous process in any milieu. The complexity covers factoring in the distribution aspects to logistics, marketing to customer service, and then the expansion into new channels and markets. Retailers have to then contend with language barriers, cultural nuances, local regulations, and partners as well.

Amidst all this, it can be easy to overlook the payments infrastructure. But that would mean missing a huge opportunity, as the right payments platform can increase revenue and drive business growth. Smart business owners leverage payment tools to effectively integrate them into the growth strategy of the business.

The payment experience has long been neglected, with retailers generally choosing to outsource the responsibility to traditional banks. Retailers are now beginning to develop strategies around integrating payments into their value proposition. While some still see payment as a process to be optimised from a technical and cost standpoint, implementing a solid payments strategy will prove to be an opportunity for retailers to gain revenue advantage.

A report by Forrester found that businesses working with Adyen typically increased revenue by 1 per cent. So, if a company’s annual revenue is $50m, they could look at an additional annual revenue of $500,000, with a few modifications in their payments infrastructure.

Deriving increased value from payments requires careful thought and execution. The changing business landscape has led to a new age in the payments market, with a focus on customer experience. Increased e-commerce also necessitates a robust platform. The right payments infrastructure has the potential to unlock more revenue and offer retailers a competitive edge. This could be facilitated by the following steps:

Implementing easy buying experiences with an optimised checkout

The checkout page, where customers land when they hit “buy”, is where they enter their payment details before completing the purchase. Almost 86 per cent of respondents of an online shopping survey said they have abandoned their shopping cart before checking out, because of cumbersome payment issues .

A poorly designed payment form, insufficient payment options or too many steps in the process could force shoppers to abandon the purchase. Simplifying checkout makes customers return again, and again.

Increasing conversion rates with local payment methods

Businesses of all sizes are expanding across borders. But rushing to launch localised websites and set up entities in new markets, it’s important for businesses to consider how international shoppers want to pay.

Hundreds of millions of potential customers don’t use international credit cards, but prefer local payment methods, like online banking, open invoice, and e-wallets. It is imperative that businesses work with a payment provider that offers the preferred payment methods for the shoppers in the country or region so that they do not abandon the transaction due to non-availability of their payment methods. For instance in the Middle East, Saudi shoppers are accustomed to paying via Mada, but in Egypt people are prefer to pay via Meeza or Fawry.

Recognising loyal shoppers and blocking fraudsters

As businesses expand, the risks of fraud increase. Data can be used to block fraudsters and protect loyal and legitimate customers. Research company Edgar Dunn & Company (EDC) found that 24 per cent of businesses reported that more than 10% of transactions, initially rejected as fraudulent, were legitimate customers. These ‘false positives’ are most likely not going to return for any future purchases as they do not feel welcome.

To combat different types of fraud, using multiple tools such as 3D secure can help retailers form a strong defence. A good risk management system will combine different tactics; including fraud detection technology, supervised machine learning, customisable settings for the business, testing and experimentation. This eliminates the risk of blocking shoppers instead of fraudsters.

Ensuring valid payments are authorised quickly

Card transactions account for a majority of retailers’ payments. It is important that these are authorised without a hitch and merchants have full control and insight into the process and data. According to the latest retail report by Adyen, 25 per cent of declined transactions lack valid reasons.

If a payment provider is not an acquirer but works with a third party, it’s hard to say if the reason for the declined payment was valid. Working with a payments provider with built in acquiring ensures all valid payments get accepted and there is visibility on the decline reasons.

Providing rich data insights into customer behaviour

If all payment data from all devices, channels, and markets feeds into the same platform, retailers can have a global snapshot of customers in one place. Thus, they get detailed insights into customers’ preferences, target specific customer segments, and deepen existing relationships.

Retailers can then measure the impact a new store has on e-commerce sales, identify clusters of online shoppers to help decide where to open a new store and the proportion of in-store shoppers originates overseas.

Payments can be a key tool in increasing revenues and growing the business overall, while providing opportunities to reduce operating costs. From being viewed as a necessary evil and cost centre, payments have become a key enabler of an integrated and seamless shopping experience.

Today’s customers expect seamless, quick, and personalised transactions, necessitating the need for more customer-centric payment models. With the focus now on winning and retaining customers, it’s time for retailers to act now to improve their payments experience.

Sander Maertens is the head of Middle East at Adyen