A new survey of senior payments professionals from leading global payment service provider emerchantpay has found that merchants across a range of industries are seeing substantial losses as a result of unoptimised payment strategies.
In the Great Payments Transformation report, 91 per cent of the 954 payment leaders in the UK and Germany estimated they were experiencing revenue losses due to shortcomings in their payments systems. Of this number, over a third (36 per cent) said that 11-25 per cent of their revenue is being lost due to shortcomings in their payment gateway, and over half (55 per cent) predicted losing up to 10 per cent of turnover.
When looking at the impact on an organisation’s profitability, the survey found that 39 per cent of the largest businesses (£100m+ turnover) estimate 11-25 per cent of their revenue is being lost, while 54 per cent say up to 10 per cent is being lost due to a lack of optimisation in payments. This equates to 54 per cent losing a minimum of £1m (1 per cent lost revenue) a year, and 39 per cent losing a minimum of £11million (11 per cent lost revenue).
Those surveyed were keen to implement change swiftly, with nearly a quarter (23 per cent) saying they would need to make improvements to their payments strategy by the end of H1 2022 and a further 40 per cent saying change must happen by the end of the year, to avoid losing customers and revenue.
The majority of respondents (40 per cent) said that they would need to make these improvements by the end of 2022 (in the next 7-12 months) to avoid losing customers and revenue. 29 per cent said they would need to take similar action in the next 13-23 months, while nearly a quarter (23 per cent) in the next six months. It’s evident that organisations acknowledge the need for change to keep up with demand – driven by consumers and the industry alike.
In addition, payments performance is at the front of mind for merchants, with 80 per cent saying regular performance reviews are crucial as an area of customer support from their payment service provider.
However, several barriers to investing in optimising payments performance were identified when respondents were asked about their top three blockers. Regulation and compliance burdens were cited by 38 per cent of respondents as taking away time and focus. In addition, more than a third (36 per cent) of participants said a lack of data or access only to poor quality data was an issue. This is further amplified by a lack of in-house resources and skills hindering change, as cited by 34 per cent of participants. Data, in particular, is a concern, as 37 per cent of participants felt like their use of data to inform their payments strategies could be improved.
Svetlio Todorov, managing director at emerchantpay comments, “Improving payments strategies can deliver huge commercial benefits to businesses, helping to boost profit margins. However, while they understand this, payment leaders are being distracted by regulation and compliance, while experiencing a lack of high-quality data and a shortage of in-house skills. They know they need to act now to transform their payment strategies and systems, but lack the insights needed to drive change and buy-in from the wider business.
“By providing hard data and evidence to demonstrate why it pays to invest in optimised payment processes, strategic payments partners can give payments leaders the tools they need to build a case for continued innovation. Payments transformation is critical if merchants are truly going to keep up with customer demand and respond to the revenue losses identified in this research.”
Looking at what is required in a payment service provider (PSP), one that could tackle specific issues was favoured. Just under a third of payments leaders (32 per cent) cited offering a range of global payments options as a priority, with a further 32 per cent looking for payment routing capabilities. A further 30 per cent looked for integration options and 29 per cent were seeking anti-fraud solutions from their PSP. Interestingly, low rates was the least popular response (22 per cent), suggesting merchants are willing to invest in a PSP that will help them move the dial on issues that need to be addressed.
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