The pace of change within the payments sector continues to accelerate, driven by new technologies such as Artificial Intelligence, Machine Learning and Blockchain and unrelenting consumer demand for faster and easier payment methods, writes Jonas Reynisson
Innovation is having a profound impact in delivering world-class customer experience for organisations that are able to harness new technologies in an integrated and secure way.
But at the same time, innovation poses serious challenges and complexity to businesses across all sectors.
Payments professionals find themselves under ever greater pressure to drive innovation and customer experience, whilst also ensuring compliance, managing security risks and fraud, and increasing conversion rates within a payments eco-system that is becoming more fragmented and fluid. For many payments professionals, there simply isn’t enough time in the day.
The result is that payments teams struggle to give sufficient focus to ensuring that their day-to-day payments operations are optimised and delivering maximum value to the business. In the hurry to embrace the next new payment method and second guess the future, our industry too often overlooks its performance today.
emerchantpay recently undertook global research into the current payments landscape, exploring challenges and priorities for payments teams across a wide range of industries, from travel and retail, through to gambling and forex.
In particular, the study examined the extent to which performance is becoming a critical factor within payments strategy, and the challenges facing professionals as they look to optimise performance across all areas of their payment infrastructure.
Pressure to perform
Payments departments are coming under increased pressure from senior leadership to improve in all areas of payments but, most often, this means driving optimisation of existing payments systems.
Two thirds of payments leaders admit that they need to make significant improvements in payments performance in the next 12 months to avoid losing customers and revenue and, worryingly, 59% acknowledge that their organisation is already losing revenue due to shortcomings with their payment gateway.
As customer experience becomes the big battleground across all sectors, organisations simply cannot afford to deliver poor payment experiences; consumers, particularly millennials, will not tolerate it and will share their grievances far and wide on social media, doing immense damage to a brand.
Worryingly, however, there is not a single area of payments where payments leaders are satisfied with their performance, whether that be in their ability to analyse decline codes and fraud data to set better rules, or to monitor fraud in real-time. What’s more, far too many organisations are failing to review and optimise payments performance on a frequent basis, meaning that they cannot track the impact of optimisation measures and use this insight to make informed decisions.
Barriers to payments performance
Whilst payments leaders and wider business stakeholders acknowledge the need to prioritise performance across the payments eco-system, many are struggling to implement the required processes, skills and resources.
So often payments performance takes a back seat to other, seemingly more urgent priorities, particularly compliance obligations around ever-changing regulations, or else optimisation is held back by budgetary constraints, outdated technology and tools, and a lack of appropriate partners and vendors.
There is also a major challenge in accessing high quality payments data on which to base decisions, and a lack of in-house resources and skills to turn data into meaningful, actionable insight.
Having clear visibility and understanding of current activity and processes across all payment infrastructure is absolutely critical to optimising performance yet, remarkably, 75% of payments leaders report that analysing payments data remains a challenge within their organisation.
At a broader, organisational level, senior leadership still remains indifferent towards payments, with a lack of understanding about the importance of instilling a modern, agile payments infrastructure within the organisation. Only 39% of payments leaders feel that the wider business fully recognises the value of optimising payments performance, and only 35% believe that business stakeholders fully understand the benefits of an agile payment infrastructure.
The result is that payment leaders cannot generate the support, resources and investment required to make a significant impact on performance.
Putting performance first
As all sectors try to get to grips with non-stop disruption and a constantly evolving competitive landscape, the need to ‘do more with less’ and drive efficiencies and margins becomes more acute. This is particularly true when it comes to payments performance.
Of course, innovation will continue to drive the payments industry forward, but this focus on the future needs to be balanced with a genuine commitment to ensuring that today’s payments processes are fully optimised and delivering as much value as possible to the organisation.
Currently, too many businesses are ‘leaving money on the table’ by not offering their customers the fastest, easiest, most personalised payment experiences possible and by not fully understanding, detecting and preventing fraud.
Businesses across all sectors need to examine their current processes for tracking, measuring and improving payments performance and to develop a roadmap to ensure that performance becomes the lens through which all payments strategy is developed.
As an industry we have to get better at communicating the importance of payments performance, highlighting both the negative impact of poor payments performance (on customer experience and the bottom line) and the potential for optimised performance to drive brand loyalty and sales.
This means building robust business cases to secure the internal support and investment required to address performance issues and implement the right processes and behaviours within their teams.
To read more about the research, the Performance Pulse white paper is available for download here.
Jonas Reynisson is CEO, emerchantpay