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How to Use Data Analytics to Improve Payment Processing Efficiency

Learn how to leverage payment data analytics to optimise payment processing efficiency, reduce transaction costs, improve approvals, and gain actionable insights.

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Payoneer Team

As a small business or sole trader, do you really need to spend time on payment analytics? If you think payment metrics are just something for big businesses and banks to concern themselves with, think again. There’s a lot you can learn, not just about ongoing transactions, but how they drive your business – in other words, this window onto customer behavior can reveal real insights from which you can benefit. 

The why and how of analytics for payments

Transaction data insights into your payment platform are important as it will allow you to optimize your payment systems for the convenience of your customers and the benefit of your company – creating a smart and secure payment system for your business. The information you glean can make an important difference to your financial operations and help you to make informed decisions, no matter the size of your business.

So what does payment analytics involve? It’s a way of monitoring your transaction data insights by collecting, standardizing and analyzing data from your ecommerce payment solution. Using the right tools, you’ll be able to see trends and patterns in performance, efficiency and customer behavior. With this business critical information, you’ll be able to improve the efficiency of your payment performance, streamline your payment operations, work out where and when it’s best to withdraw funds, and detect areas of weakness.

These are the steps to follow for effective payment data analysis:

  • Identify the source of data that can provide  useful information, looking at the dashboards on your payment platforms, ecommerce systems, CRM data and your website analytics.
  • Gather and standardize the data from different sources and combine them onto spreadsheets.
  • If you use a platform like Payoneer, you’ll be able to access analytics like sales data, payment methods, and types and locations of transactions, all included in the fees you pay.
  • Use an API if this would help you to combine analytic data from diverse sources.
  • Identify KPIs and expand your reach as the data matures.
  • Use descriptive analysis to inform you about payment trends and patterns.
  • Diagnostic analysis of the data will allow you to identify and address problems in your payment processes.
  • Predictive and prescriptive analysis can be used to underpin decision making based on forward trends.

By monitoring your transaction data insights regularly, you’ll see how key metrics change over time and what effects your decisions are having on your payment processing as you move forward. 

How the numbers tell a story

What exactly can you learn from payment data analytics? There’s a wealth of information contained within transaction data insights. You can use them to:

  • Track and unlock global revenue growth
  • Manage cash flow
  • Manage your FX more effectively by using local receiving accounts
  • Monitor payment fraud
  • Formulate a customer retention strategy
  • Allocate appropriate resources to customer service activities
  • Make ROI calculations on payment channels by looking at payment methods used across different regions and transaction types
  • Analyze transaction amounts to work out where offers and discounts can be most effective
  • Gain early intelligence on areas of strength and weakness
  • Improve your payment processes and interrogate payment declines and failures

Frequently asked questions (FAQs)

The following data will prove useful for analyzing your payment metrics:

  • Authorization rates
  • Transaction success rates
  • Payment latency
  • Chargeback rate
  • Refund rate
  • Costs per transactions
  • Retry success rate
  • Customer payment preferences

There are multiple ways of monitoring your payment process performance:

  • Payment gateways such as Payoneer
  • Business intelligence tools
  • Data integration platforms
  • Custom dashboards
  • Specialist payment analytic platforms

However, for small business and freelancers, using the tools provided by your payment gateway will likely be adequate to avoid extra expense.

Yes – the data can provide you with valuable information to ensure more payments go through.

  • Look at which banks and credit card companies make the most declines, and identify alternatives
  • By using dynamic retry logic, you can check failures under optimal conditions
  • Ensure all your customer credentials are updated regularly to minimize declines

Identify local payment methods with higher acceptance rates for each market when you get paid by clients from all over the world.

Cutting down payment fraud has very obvious benefits, and payment data analytics can be an important element in this. You can use it to:

  • Identify anomalies such as unusual amounts, velocity, IP addresses or physical locations
  • Spot patterns and trends in the above anomalies
  • Harness machine learning models to find parallels with historical fraud data
  • Monitor chargeback ratios by customer type, product or market
  • Tune fraud filters in real time on the basis of analyzed data
  • Jointly assess different sources of data, such as device fingerprinting and behavioral analytics, to identify areas of concern

If you’re accepting payments from customers all over the world, analyzing the data from multi-currency and cross-border payments will make a significant contribution to ensuring you’re keeping your payment processing efficient. Track the following analytics in your international payment data:

  • Look at spot versus fixed rates to track and optimize your FX costs
  • Compare different markets to reveal regional performance variance
  • Track cross-border surcharges and use local receiving accounts to keep your FX costs under control
  • Analyze settlement reconciliation across time zones, countries and currencies

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