6 Ways Online Payment Technologies Will Revolutionize Your Business

Feb 08, 2016 3:27 PM  By

What the typical merchant wouldn’t give to be able to read a customer’s mind. The next wave of payment technology will focus on offering merchants more insight into the customer journey – especially during the checkout and payment phases. Data-driven intelligence will enable merchants to cater to customer needs in a more individualized and sophisticated manner, requiring less effort, cost, and resources.

In this piece, I will discuss six ways that merchants can leverage their payment data and optimize the customer experience without compromising data security or operational efficiency.

Understanding the Path to Purchase

Many merchants struggle to pinpoint the exact reasons for shopping cart abandonment, but better data resources can help them identify the specific point in the customer journey where shoppers abandon the purchase. Knowing when consumers are abandoning the checkout helps retailers draw conclusions about why they are not converting.

Globalization, Localization and Personalization

When targeting cross-border customers, merchants need to be aware of the unique needs of shoppers in other localities. Shopping on foreign websites can be confusing to consumers, especially if they are not able to pay with payment methods conventionally used in their region.

Merchants can make the cross-border shopping experience more inviting and comfortable by simply knowing where a consumer is based and automatically localizing the experience accordingly. This includes dynamically offering relevant payment methods based on the customer’s region.

For example, the retailer can offer targeted promotions, share relevant information about its brand in that locality, and provide a consumer experience tailored for the cultural conventions of that location.

Many consumers abandon their checkout at the payment stage simply because the payment methods they prefer to use are not available to them on the merchant’s website. This can be easily resolved by creating rules about the payment methods available to consumers in different geo-locations or at different IP addresses.

Protecting Your Consumers from Fraud

The ability to detect fraud early on and protect consumers from data breaches is another way retailers can encourage brand loyalty and customer satisfaction. Merchants can integrate data tools that learn customer behavior, detect anomalies, and flag transactions as potentially fraudulent.

For example, if a loyal customer has always shopped with the brand from an IP address in California, but suddenly is paying from an IP address in a region in China associated with fraud, the payment technology can either decline the transaction or flag it for manual review by a company fraud expert.

Maximizing Your Payment Rules

Back-end inefficiencies are another major barrier in the checkout which can easily be solved with better data transparency. The ability to analyze when and where certain credit cards are declined is crucial to ensuring better acceptance rates and ultimately more revenues. Merchants can use decline rate data to create customized rules that prevent the factors causing the declines and reroute transactions to decrease transaction costs.

Better data can help merchants identify, for example, imprecise fraud protocols that automatically decline specific card schemes, currencies or customer locations, and many payment providers now offer solutions that route payments between financial institutions to prevent these problems. A retailer based in the United States can decide to route all payments from European credit cards to payment providers in Europe and all local transactions to its local provider in order to reduce credit card decline rates, as well as cross-border and currency conversion fees.

Offering the Omnichannel Experience

Many of today’s major retailers strive to offer customers an omnichannel experience and maintain both online and brick-and-mortar stores, but are ill-equipped to achieve a seamless experience across all channels.  Today’s sophisticated data technologies enable retailers to not only analyze transaction data per retail channel, but also to see the bigger picture and understand performance across all channels. With this transparency into their payment data, merchants can better optimize performance for every platform.

The Challenges of Data Maintenance and Storage

Although data-driven technologies have many benefits for retailers, using and storing data is not without its risks and challenges. To store customer data, merchants are required to comply with a number of regulations and security protocols, many of which are time-consuming and vary by country.

Today, however, most payment technology offers data storage capabilities, maintains compliance and upholds security standards for the retailer, while still providing visibility to customer data.

Many payment solutions use hosted payment fields to overcome data-related challenges. This method enables a third-party technology to collect, store, and secure data via white-labeled payment fields that share the same look and feel as the merchant’s ecommerce site, but which are hosted by a PCI compliant third-party’s server. When a customer inserts payment information into each field, the information is captured by the data technology and securely stored for the merchant.

 The Possibilities of Big Data

Data intelligence offers retailers critical knowledge and insight into the customer payment process, enabling them to create the best checkout experience to meet customers’ needs. Whether merchants are active online, in-store, or across channels; whether they target local shoppers or a global audience; and even whether they offer physical or digital goods, merchants can best guide their customers through the checkout process using data from customer interactions with the brand, ultimately maximizing business performance.

 Oren Levy is CEO of Zooz.

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