In the omnichannel retail era, merchants have an ever increasing amount of payment data streaming back to them from various sources – in-store, online, mobile and social. This massive volume of information is one of the modern retailer’s most valuable assets when it comes to better understanding their consumer, improving their payment authorization rates and locking out fraud. And yet, properly leveraging payment data requires expertise, resources and a lot of time. That’s why, of the mountains of data produced, less than 0.5% is ever analysed and used by retailers.
This is an area in which the merchant’s payment service provider (PSP) can offer crucial assistance. The truly forward thinking PSPs are now putting data at the heart of their omnichannel retail payment solutions, crunching the data behind every payment and reporting back to clients with never-before-possible insights that eliminate risk, enhance the customer experience and maximize revenue.
The typical modern retailer sells through a number of channels, online and offline. While ecommerce consumer behaviour is relatively easy to follow, the in-store shopper is much harder to track scientifically. With 92% of all transactions still taking place offline, this represents a knowledge gap for the omnichannel merchant.
At Payvision and Acapture, we centralize data from all transactions processed through our solution, whether they be point-of-sale, desktop or mobile. The consumer journey can be understood from touch point to touch point, creating a more complete view of the buyer and supporting the development of a tailored product and service.
While you might think a payment will be authorized so long as the buyer has enough funds in their account to cover the purchase, other factors can get in the way to disrupt the process. In particular, transactions are often rejected when one of the banks involved demands stringent security standards that are not being met. For example, they might block payments coming from banks registered in certain countries or using particularly tight security checks. So, even though the consumer is totally honest, the payment never reaches the retailer.
Using data science, we can increase the chances of every legitimate transaction being authorized. Based on past transactions, we predict which banks are most likely to accept which transactions, and route our clients’ payments accordingly. The results are better authorization rates and higher revenues.
When it comes to fraud, PSPs perform a delicate balancing act. Their platform must be secure enough to keep the fraudsters at bay while being flexible enough to accept as many legitimate transactions as possible. In the past, PSPs have been overly cautious. For example, they have blocked the IP address of entire countries where fraud is prominent, cutting out millions of potential genuine customers in order to stay protected.
At Payvision and Acapture, we have developed a data driven fraud solution that makes this balance far easier to strike. This system uses intensive data mining to reduce the chances of ‘false positives’ – instances where a perfectly good payment bears some resemblance to a fraudulent one and is rejected. By using specific historical transaction data rather than making broad, sweeping rules, we can massively improve authorization rates without putting our clients at undue risk.
Given that consumer data is so important to every ambitious company, it’s understandable that omnichannel retail platforms are desperate to find out more and more about their buyers. On the other hand, elongating the sales process in order to collect as much information as possible is liable to see the buyer abandon the purchase in frustration.
Again, a balance needs to be struck and that balance will depend mainly on the type of product being sold. For example, an Uber customer expects no more than a single, quick step to purchase their taxi journey. An airline customer, however, is comfortable filling out five or six webpages to book their holiday. At Payvision and Acapture, we specialise in tailoring the checkout process to the merchant’s specific industry. This way, we ensure you accrue as much potentially valuable payment data as possible without exasperating your target audience.
As you can see, the scientific use of payment data is changing the way retailers operate. Yet there are pitfalls that need to be avoided in order to successfully implement such a strategy. Here at Payvision and Acapture, our team of experts specialize in maximizing our clients’ revenues through the intelligent use of data. This is how we help our merchants stay ahead of the competition in the rapidly shifting omnichannel retail world.
This article originally appeared in the March issue of POSitivity magazine.