The global digital payments market is projected to exceed $12.5 trillion by 2027. It’s become evident that the way merchants manage their payment operations can significantly impact their bottom line, stability, and future expansion. As a result, forward-thinking merchants are recognising the importance of payment optimisation.

In this article we’ll share an insight into the best practices for merchants looking to optimise their payment ecosystems. From mobile optimisation and local acquiring, to fraud detection and automation, we'll explore a holistic framework that can help you continuously monitor, benchmark, and refine your payment performance. Additionally, we'll discuss the emerging trends of PayLater (or B2B Buy Now Pay Later) and how it can be seamlessly integrated into your overall payment optimisation strategy.

What is Payment Optimisation?

Payment optimisation is the process of enhancing your payment strategy, technology stack, and payment processing to achieve a range of crucial objectives relating to cost, risk & payment experience.

To dig a little deeper, these could include reducing transaction costs, improving authorisation rates, minimising instances of fraud, and providing a seamless customer experience across all channels.

In optimising your payment ecosystem, you can unlock significant advantages including financial benefits, better operational efficiency, and a strengthened competitive position. Let’s cover how this plays out…

Key Drivers of Payment Optimisation

Several factors have contributed to the growing importance of payment optimisation for merchants:

1. Evolving Buyer Preferences: The rise of mobile-based commerce, increasing adoption of digital payment methods & demands for flexible payment terms has driven a change in buyer preferences. B2C payment experiences have come a long way, with much innovation happening in this space. This has led to heightened expectations on the B2B side. B2B Buyers now expect the same fast, frictionless, and secure payment experiences, and merchants must adapt their payment strategies to meet these evolving preferences to maximise conversion.
   
   
2. Global Expansion and Localisation: As merchants expand into new markets, they must navigate diverse payment preferences, regulations, and infrastructure. Embracing local acquiring and supporting a wide range of payment methods can be crucial for success in these new regions.
   
   
3. Fraud and Security Concerns: The growth in digital payments, brings with it a rise in fraudulent transactions and data breaches, necessitating robust fraud detection and prevention measures to protect both merchants and their buyers.
   
   
4. Operational Efficiency and Cost Optimisation: Streamlining payment processes, automating tasks, and reducing transaction fees can lead to significant cost savings and improved operational/financial performance.
   
   
5. Competitive Differentiation: Merchants that excel at payment optimisation can gain a competitive edge by offering a superior customer experience, reducing operational overhead, and unlocking increased sales & order value.
   
   
6. Multichannel Sales Channels: B2B commerce happens offline and online. This multichannel approach is only increasing as more & more merchants are looking at eCommerce and online sales channels as key growth opportunities. Unifying payment methods and onboarding experiences across online and offline channels leads to a more connected experience for the buyer, removing the friction that often comes with a multichannel buying experience.
   
   

Establishing a Payment Optimisation Framework

To effectively optimise your payment ecosystem, we recommend the following four-step framework:

Objective

Identify the core objectives for your organisation relating to payments, these objectives will be different for all businesses, and will likely change depending on the wider context in your business. So there isn’t a set of default payment optimisation objectives you should be focused on. This will come internally, and should be related to the strategic objectives of your business.

Examples of payment optimisation objectives:

• Cost Optimisation
• Revenue Growth
• Increase market share
• Customer experience
• Conversion optimisation

Monitor

Merchants should continuously track and analyse their payment performance in the context of the objectives. Improving the visibility of how your payment ecosystem is performing requires clear data and continuous analysis. Define the metrics that are relevant to your objectives and ensure your collecting data in a structured, accessible way. This is an important consideration for which partners should be used in your payment ecosystem; are they able to provide this data and how will they provide it.

Examples of metrics;

• Payment method adoption rates
• Conversion rates
• Approval rates
• Transaction costs
• Share of wallet
• Dispute resolution

Benchmark

Compare your payment metrics against industry standards and best-in-class performers to identify areas for improvement. Whether you’ll be able to access these benchmarks will depend on your industry. Look for market intelligence & research companies that may be able to support you with benchmarking.

Improve

Once you’ve defined your objectives, identified the performance indicating metrics, and have a clear picture of what great looks like, you're ready to start implementing payment optimisation strategies.

As we’ve covered, every business’ situation is different and the strategies required will vary entirely from one case to the next. Therefore it’s impossible for us to provide specific strategies for your business in an article like this (but get in touch with our team to talk about our B2B payment solutions) or read on for some examples of how merchants can achieve objectives relating to combatting fraud, optimising for mobile payments, embracing automation & offering flexible payment terms to buyers.

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Combating Fraud and Enhancing Security

The Growing Threat of Fraud

Fraudulent transactions pose a significant risk to merchants, not only in terms of financial losses but also in terms of customer trust, reputation, and long-term sustainability. As the digital landscape evolves, the threat of fraud continues to escalate, requiring merchants to take proactive measures to safeguard their operations.

Strategies for Fraud Detection and Prevention

1. Implement Real-Time Fraud Monitoring: Deploy advanced analytics and machine learning algorithms to continuously monitor transactions and identify suspicious patterns in real-time, enabling prompt intervention and prevention of fraudulent activities.
2. Leverage Multi Layered Authentication: Incorporate robust authentication methods, such as biometric verification, 3D Secure protocols, and behavioural analysis, to verify the legitimacy of transactions and prevent unauthorised access.
3. Streamline Chargeback Management: Implement automated chargeback management processes to efficiently handle disputes, reduce the administrative burden, and minimise the financial impact of fraudulent chargebacks.
4. Foster Collaboration and Information Sharing: Engage with industry associations, regulatory bodies, and other merchants to stay informed about emerging fraud trends, share best practices, and collaborate on effective countermeasures.

Frictionless Buyer Authentication with Kriya.

With Kriya, buyers are instantly authenticated in a single flow at checkout. Once authenticated, Kriya provides the buyer with spending limits and payment terms for the buyer to choose from. This all happens in the checkout, providing a frictionless experience. Not only that, Kriya takes on the risk and handles payment collection. 

• Instant buyer authentication & spending limits set by Kriya
• Offer Buyer flexible payment terms
• Kriya pays you in full on delivery of order
• Kriya takes on the risk & handles payment collection

Learn more about preventing fraud with Kriya

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Optimising for Mobile Payments

The Rise of Mobile Payments

The proliferation of smartphones and the increasing popularity of digital wallets have transformed the payment landscape. Juniper Research estimates that by 2028, mobile wallets will be responsible for over $16 trillion in transactions globally. Merchants should consider whether mobile payments should be part of their payment optimisation strategy to cater to this growing segment of mobile-savvy buyers.

Benefits of Mobile Optimisation

1. Increased Sales and Customer Satisfaction: By providing a seamless, mobile-friendly checkout experience, you can appeal to a wider demographic.
2. Enhanced Security: Mobile payment methods often incorporate robust security features, such as biometric authentication and tokenization, which can help build customer trust and reduce the risk of fraud.
3. Improved Operational Efficiency: Mobile payments can streamline recordkeeping, reduce manual errors, and provide real-time transaction data for better business insights.

Strategies for Mobile Optimisation

1. Integrate Mobile Wallets: Enable support for popular mobile wallets like Apple Pay, Google Pay, and Samsung Pay, which offer a frictionless checkout experience for buyers.
2. Develop a Mobile-Friendly Checkout: Ensure your online checkout process is optimised for small screens, with a clean, intuitive user interface and minimal steps to complete a transaction.
3. Leverage Mobile-Specific Features: Utilise features like one-click payments, biometric authentication, and location-based services to enhance the mobile payment experience.
4. Provide In-App Payments: If you have a mobile application, integrate seamless in-app payment capabilities to streamline the purchasing process for your buyers.
5. Monitor and Iterate: Continuously track mobile payment adoption, conversion rates, and customer feedback, and make iterative improvements to optimise the experience.

Embracing Automation and Streamlining Processes

The Benefits of Automation in Payment Operations

Automating key payment processes can reduce manual errors, improve operational efficiency, enhance data tracking and reporting, and provide cost savings. By leveraging automation, merchants can free up resources to focus on strategic initiatives and core competencies, rather than repetitive administrative tasks.

Automation Strategies for Payment Optimisation

1. Automated Invoice Processing: Implement automated invoice processing solutions to ensure timely payments, avoid late fees, and strengthen supplier relationships.
2. Automated Reconciliation and Reporting: Leverage payment automation solutions to automate the reconciliation of transactions and generate comprehensive financial reports, and provide valuable insights for decision-making.
3. Automated Chargeback and Dispute Resolution: Streamline the handling of chargebacks and disputes through automated workflows, reducing the administrative burden and improving response times.
4. Automated Subscription and Recurring Billing: Automate the creation, management, and processing of recurring billing and subscription plans, enhancing customer retention and predictable revenue streams.

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Leveraging PayLater (Buy Now Pay Later) for Payment Optimisation

Understanding PayLater (Buy Now Pay Later)

PayLater, also known as Buy Now Pay Later (BNPL), is an emerging payment method that allows buyers to purchase goods or services and pay for them in instalments, often interest-free. This flexible financing option has gained significant traction, as it offers an alternative to traditional credit cards and provides greater control over their purchasing power.

The Benefits of Integrating PayLater

Incorporating PayLater into your payment optimisation strategy can deliver a range of benefits for your business:

1. Increased Sales and Conversion Rates: By offering a more convenient and accessible payment option, you can attract new buyers and encourage higher average order values, leading to increased sales and improved conversion rates.
2. Enhanced Customer Experience: PayLater aligns with the growing buyer preference for flexible and transparent financing options, enhancing the overall customer experience and building brand loyalty.
3. Reduced Risk and Improved Cash Flow: As the PayLater provider assumes the credit risk, you can receive upfront payment while your buyers pay in instalments, improving your cash flow and reducing the burden of managing credit and collections.
4. Expanded Addressable Market: By catering to buyers who may not have access to traditional credit or prefer to spread their payments, you can reach a wider audience and unlock new growth opportunities.

Strategies for Integrating PayLater

To effectively integrate PayLater into your payment optimisation strategy, consider the following steps:

1. Evaluate PayLater Providers: Research and compare various PayLater service providers, considering factors such as global coverage, supported currencies, integration capabilities, and risk management capabilities.
2. Seamlessly Integrate PayLater: Ensure a frictionless integration of the PayLater solution into your existing payment infrastructure, providing a seamless checkout experience for your buyers.
3. Promote and Educate: Actively promote the availability of PayLater as a payment option and educate your buyers on the benefits and features of this flexible financing solution.
4. Monitor and Optimise: Continuously track the performance of your PayLater integration, including adoption rates, average order values, and customer feedback, and make adjustments to optimise the experience.

By embracing PayLater as part of your overall payment optimisation strategy, you can unlock new revenue streams, enhance customer loyalty, and position your business for long-term growth in the evolving digital payment landscape.

Kriya is the Enterprise PayLater Solution.

Kriya enables flexible B2B payment terms for enterprise merchants. B2B buyers expect to have the same flexibility that they enjoy in B2C transactions and Kriya allows merchants to offer this - through both online and offline channels. Kriya’s PayLater solution allows Buyer to select pay in 3, or 30/60/90 day payment terms, while the merchant is paid upfront on delivery of the goods or services sold by Kriya. Kriya conducts instant, seamless credit checking, authentication & sets credit limits at the point of purchase, taking on all of the credit risk.

• All credit risk is taken on by Kriya
• Receive payment upfront, even when Buyers select PayLater options
• Automated credit checking and authentication
• Built for all types of B2B payments: Online & Offline channels
• Backed by Barclays, Santander, Northzone & others
• API, hosted payment flow & plugin integration options
  
  

PayLater is driving real growth for our merchants:

• 40% Buyer Adoption
• 2x Likelihood of repeat orders
• 45% Revenue Growth
• 4x Increase in acquisition of new Buyer

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Book a call with our team today

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