In the world of commerce, everything is driven by data. The information that merchants collect and analyze determines the marketing channels they use, what products they stock and which customers they focus on.

Meanwhile, the digital payments market was valued at $58 billion in 2020 and this is set to grow by 19 percent over the next seven years.

For any merchant, this means that whether they sell using online channels only, have a brick-and-mortar footprint or both, there’s a wealth of data to tap into. However, taking advantage of this data requires a clear “learn and adjust” strategy and powerful analytics tools.

In this blog, we will look at some of the ways merchants can leverage payment analytics to grow and transform their business.

The rise of payments data

At the turn of the 21st century, most payments were made in stores using cash or cards.

As a merchant, you could see how much money you made and the most popular payment method, but this was the extent of the insights available from payments data.

Fast forward to the present day, and a much more comprehensive range of information is available. From POS terminals to eCommerce websites, processing to delivery, social media reviews to repeat purchases, there are several data touchpoints merchants can utilize to learn more about the customer journey and the triggers that influence buying behavior.

Where is this data coming from? Through various means, such as connected devices like smartphones, inventory scanners and other payment devices. The range of devices and consumer touchpoints is increasing rapidly — one such example is the increasing popularity and familiarity with using virtual assistants like Amazon Alexa and Google Assistant. According to Statista, there will be 50 billion connected devices by 2030.

All these touchpoints are digital, creating a data trail and an electronic repository of invaluable — but raw — business information. The challenge is to visualize it and turn it into something you can use to gain positive business results.

Utilizing end-to-end intelligence

With all things in life, you get a more well-rounded and detailed story when information comes from multiple data sources. The same applies to payment analytics.

Rather than relying on just one stream of data, merchants need to combine different data sets to get a full 360º view of the customer shopping experience. For example, you can combine omni-commerce information from stores and online to fully understand your customers and their buying patterns, which can be further used to identify and reach out to first-time shoppers, or those moving between channels. It is also possible to easily decode when shoppers enroll in your loyalty program or what triggered that decision. It becomes possible to gauge the demand for “buy now, pay later” (BNPL) payment methods and other emerging trends such as QR codes, loyalty-integrated payments and self-checkout.

To do this successfully, merchants need to consider two key things:

First, do you have easy access to all the data needed in your organization? According to FSN, 30 percent of data is siloed, meaning that only specific departments and key people have full access to the information needed. If this is the case, working more collaboratively will break down any barriers in place.

Secondly, do you have the right analytics package (preferably as a part of an omni-commerce platform) to visualize this data efficiently across channels?

Customizing dashboards and showcasing data

According to a study by Mastercard,  nearly 45 percent of business leaders across industries acknowledge that they lack skills to interpret and apply analytics in the right business contexts.

Visualizing data makes it easier to understand and quicker to action. This means that it is critical to have analytics tools in place that give merchants the ability to customize intuitive dashboards and present payments data — all at the push of a button.

Bear in mind that when evaluating the best data to collect and visualize, different teams will want to see different things.

As an example, payment insights will be most relevant to the operations team. They can use this data to see which payment methods, acquirers or errors occur more frequently, so that they can optimize payment systems accordingly.

Conversely, consumer insights will be most relevant to the marketing team. Showing which demographics are buying which items, or which stores are more profitable, will help them to refine their advertising campaigns and improve overall conversion rates.

Looking to the past — and to the future

When forecasting for the future, historical data is critical.

Utilizing historical data to analyze trends over the past period through their analytics tool of choice can help merchants make informed decisions and identify potential opportunities. Having suitable data streams at hand allows teams to improve predictions and react more rapidly.

For example, if sales in a certain region are low due to competitive activity, a merchant can implement a promotional discount to entice shoppers to buy with them versus the competition — or perhaps stock certain key items that would make their brand stand out when there is a big event in town, or a lockdown period, or other consumer-influencing event from which the competitor stands to benefit.

Detecting minor issues before they become major problems

The rise of social media and online review platforms makes it easier than ever for customers to leave feedback if they are unhappy about their shopping or payments experience.

According to research, the vast majority (82%) of shoppers research products online before going in-store and over half (60%) say negative reviews dissuaded consumers from buying.

Payment analytics data can be used to identify problems before they affect customers, for example, finding erroneous payments and handling them before customers complain.

Many analytics systems allow merchants to set up trend triggers, providing alerts when potential issues are found.

Quick action helps to provide frictionless payment experiences and keeps customers happy.

In conclusion

There is more data available to merchants than ever before, making it possible to map out customer journeys, identify trends and achieve operational efficiency.

In return for identifying and analyzing this data, merchants can benefit from increased customer loyalty and revenue.

Finally, with the rise of connected devices and the growth of alternative payments (in 2020, digital and mobile wallets accounted for roughly 45 percent of global eCommerce payment transactions), the analytics options available to merchants and the entire digital payments ecosystem will only increase. For those not yet using payments data to their advantage — now is the time to start.

Learn about how ACI’s payment analytics capabilities help merchants to transform cross-channel payments data into profitable opportunities.

Contributing Author

John has been in the payments industry for 18 years. He started with a technical focus, building and deploying payment systems across EMEA. He spent time leading a professional services team for S1 Corporation and, subsequently, a solution design team. When S1 was acquired by ACI, he led the mobile banking team for a number of years, before transitioning to a focus on Merchant Payment solutions. During his time at ACI, John was responsible for the strategy of ACI’s Merchant Payment Solution. This included a full omni-channel offering, giving merchants the ability to offer a consistent and seamless payment experience across all their consumer touchpoints while managing the system through a single centralized business portal. Besides the core focus on merchant solution strategy, John played a leading role in driving innovation inside ACI – having launched a world-class mobile payments solution and integrated new and valuable capabilities for merchants into the ACI offering.