In today’s world, the customer experience is still king. Businesses are implementing major strategies to meet customer expectations. Find out more in this article.
Today’s consumers expect a convenient, safe, and instantaneous customer experience. To keep up with the speed of digital transformation, merchants are expected to implement omnichannel strategies and offer a range of payment modes on multiple networks, from credit cards to P2P to mobile.
The recent demand for a streamlined purchasing experience has led to innovations such as real-time payments (RTPs) and one-click orders, which aim to simplify the transaction process for customers from initiation to reconciliation.
A recent report by PYMNTS.com states that almost 86% of businesses that are using real-time payments generate $500 million to $1 billion in revenue. RTPs not only offer a quicker, more convenient customer payment experience, but they also have the added advantage of helping merchants bypass credit card fees.
RTPs and one-click payments, which allow users to make purchases through a one-step process by using stored payment information, promise instantaneous results. This growing trend for simpler payment processing puts pressure on merchants, processors, and banks to perform at a faster pace.
As payments become increasingly digital, so do solutions for managing transactions from end to end. Merchants today see an increasing need for a strong payments strategy that supports client-facing processes. By integrating payment processing with back-office account reconciliation, they can ensure complete visibility throughout the transaction lifecycle.
While digital payment methods continue to grow in popularity, payment processing remains largely unchanged. The transaction lifecycle consists of:
However, with the advent of digital payments, maintaining visibility throughout the entirety of the transaction lifecycle is vital. Payments visibility promotes a better understanding of how payments move through the tech stack and plays an instrumental role in identifying problematic or fraudulent payments, errors, and delays. With full visibility, it’s possible to track payments from initiation onwards, coordinate payment routing and processing efficiently, and establish intelligent fraud detection.
End-to-end transaction visibility relies on consistent and accurate reconciliation and reporting. Reconciliation consists of several steps alongside the transaction lifecycle:
Businesses often struggle to maintain accurate and consistent reconciliation, for a myriad of reasons such as:
A comprehensive reconciliation solution can ensure full visibility by managing the transaction lifecycle from beginning to end. Not only can it confirm the validity of individual transactions, but an integrated reconciliation solution can also flag negative activity, produce accurate and current data insights, and create a system of consistent reporting that will prevent loss and support business growth.
Many merchants currently rely on manual reporting and data entry to handle reconciliations and exceptions. When dealing with large-batch transactions, simple errors and incomplete information can increase fraudulent payments and refunds and cause other accounting and auditing issues down the road. An inability to detect transaction and accounting discrepancies results in revenue leakage and increased annual write-offs.
A business’s customer experience (CX) can also suffer, leading to canceled transactions and customer drop-offs.
Often linked to billing errors, revenue leakage occurs when preventable, repetitive admin tasks lead to the miscalculation of payments and incomplete accounting. It is most often caused by:
These types of errors create inconsistencies that must be reconciled and reported. When payments are not collected, usually because of non-payment or loss of physical inventory, they can also result in write-offs. Write-offs can have a detrimental effect on a business’s bottom line in the long term. Offsetting bad debt only increases a merchant’s chance of going out of business.
In payment processing, the accuracy of financial information can make or break a sale. Insufficient systems for checking and updating information can cause payment delays, transaction cancellations, and higher numbers of chargebacks and refunds. Over time, these inefficiencies add up and may ultimately endanger merchant account eligibility with providers and processors, or cause financial hardship.
The payments industry has made great strides to enhance the customer experience by introducing and optimizing omnichannel strategies. But as the payments industry’s painful shift into digital transformation continues, challenges still remain. As per a recent report, almost 30% of customers are willing to pay more for excellent customer service.
Payment processing is a critical touchpoint for CX, and insufficient back-end solutions can harm end-user satisfaction and customer loyalty. According to a report, each year, businesses lose up to $75 billion due to poor customer service.
A truly optimal CX strategy begins in the back office with administrative systems put in place to support client-facing functions. Integrated reporting and accounting can work together to create a foundation for secure and successful payment reconciliation.
Many businesses continue to run payments reconciliation through legacy systems that cannot support the needs of emerging technologies, enabling a cycle of revenue and customer loss.
Businesses risk alienating their customer base and endangering revenue growth by not updating their reconciliation systems and making room for integrated payments and accounting solutions.
The threat to legacy payments will continue in 2022. Get in touch with us to understand how we can help you.
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