Did you know that the market for payment analytics software is growing at a CAGR of 5% (2023 to 2033) and is estimated to be valued at $6,440.5 million by 2033?
The truth is that if a business aims to succeed with its online customers today, it is imperative for the company to gain solid insight into several payment-related factors:
- Payment trends
- Customer experience
- Payment preferences
- Shopping behaviour
…and much more. To that end, payment analytics can prove to be of crucial importance. It is the process by which businesses can apply data collection, collation, and analytics to information collected from various sources like debit cards, credit cards, eWallets, payment gateways, etc.
This payment system information gives a competitive advantage to a business as it helps deliver exemplary shopping experiences to customers.
Let’s examine eight crucial ways payment data analytics can boost business growth.
8 ways payment data analytics helps with business growth
Analytics isn’t solely meant for sales representatives or marketing professionals. It is a crucial part of the decision process of a customer that has the potential to make or break a deal.
The following 8 ways determine how important payment data analytics is for business growth:
1. Determine customer lifetime value
One of the most important metrics that payment analysis helps your organisation understand is the lifetime value of your customers.
Every business gets customers that buy once and leave; they also get customers that return for repeat purchases. Understanding the revenue stream generated from your repeat customers helps you plan your resources and capital accordingly.
It helps you take better decisions on strategising for customer loyalty and customer acquisition. It also enables you to understand the profile of customers that buy from your brand repeatedly, helping to streamline marketing campaigns in alignment with analytics results.
2. Measure impact of business activities
Business activities that directly concern customers typically comprise of marketing campaigns, price updates, changes in demand, etc.
To fully picture the impact of your marketing campaigns, it is crucial to also understand the results of conversion – whether or not your emails were clicked and URLs followed, whether or not a discount coupon was redeemed.
3. Reduce cart abandonment rate
The average cart abandonment rate is as high as 75% globally, making it a major challenge in the e-commerce industry. Understanding why a shopper’s cart abandonment is vital to address the issue and encourage customer spending.
Some shoppers might have been merely browsing without the intention to purchase. However, it is a significant concern if they initiate checkout and encounter obstacles leading to cart abandonment. Therefore, gathering valuable data on various metrics, such as traffic sources, payment preferences, available checkout methods, cart abandonment funnels, etc., becomes imperative.
This data-driven approach allows businesses to identify problem areas and take necessary steps to rectify them.
4. Reduce chargebacks
Chargebacks are a bane for eCommerce businesses. These are the payments that a customer demands as refunds against fraudulent transactions, disputes, inferior quality products, damages, non-receipt of orders, etc.
Not only do they reflect badly on a brand’s reputation, but they also create significant problems for the revenue stream. Payment data analytics is one way to understand which transaction type frequently leads to a chargeback and identify the pattern.
It helps your business strategise against such an incidence and prepare a management plan in case chargebacks occur despite your efforts.
5. Improve forecasting
Payment data analytics is a crucial aspect of sales forecasting. It can help draw up a data-backed report for past performance, project the expected sales and transaction preferences for the immediate future, and forecast future sales and revenue, extrapolating from existing data.
Additionally, payment analytics can be leveraged to generate the possibility of failure of digital payments by deriving from the transaction failure patterns in history.
6. Identify payment preferences
Offering customers their preferred payment method can significantly improve their shopping experience with your business. Payment data analytics can help you identify how your customers complete transactions. By categorising this data based on demographics and cohorts, such as region, nationality, gender, age group, etc., you can gain valuable insights.
Personalising the shopping experience based on this information can be a brilliant strategy for your business. Enhanced and customised shopping experiences foster customer loyalty, ultimately contributing to the long-term growth of your business.
7. Improve customer experience
Payments analytics provide you with insights pertaining to successful transactions, failed transactions, problematic transactions, etc. It helps you understand where exactly your customers are facing problems while paying for the products they purchase.
It helps you identify and streamline the bottlenecks in the payments process, providing a seamless payment experience to the customers. A happy customer is a returning customer, which drives business growth.
8. Improve revenues and profits
Payment analytics give you an insight into how your payment gateways and financial products perform at the last point of sale. It lets you identify the services your customers use most and which ones they opt out of.
Strategising to evolve your payment systems according to contemporary trends and demands helps you to boost your revenue by closing more sales successfully.
In addition to giving you insights into how your customers use your payment system, payment data analytics helps you derive strategies for future growth.
To aid your business in incorporating efficient payment systems into your commerce suites, we at Plural offer a range of products and infrastructural solutions that enable business success:
- Payment gateway: a comprehensive payment gateway service
- Affordability Suite: Make big purchases affordable through offers, discounts and EMIs
- Tokeniser: Our RBI-compliant solution for a faster and more secure checkout experience
- Payment Links: Collect payments through links on SMS, email, Instagram and more
Visit the website to learn more about how Plural can help your business grow and reinforce your payment analytics.
Amrita Konaiagari is a Marketing Manager at Plural by Pine Labs and Editor of the Plural blog. She has over 10 years of marketing experience across Media & Tech industries and holds a Master’s degree in Communication and Journalism. She has a passion for home décor and is most definitely a dog person.