4 Essential KPIs for Measuring the Results of Your Payment Processing Strategy

For a business owner, few things are as important as offering seamless payment processing. Unfortunately, this is easier said than done. In today’s payment business landscape, customer expectations are constantly evolving, making it harder to analyze your payment processing performance. This is particularly noticeable if you aren’t sure which KPIs to track.

Well, that’s why we’re here! Here are four essential KPIs that will give you a clear idea of how your payment processing strategy is doing and what you can do to improve it.

1. Payment Conversion Rate

The conversion rate is the most straightforward metric you can track, but it’s also the most important one. At a basic level, it tells you how many transactions were declined. For instance, having 85 successful transactions out of 100 gives you an 85% conversion rate.

The key to understanding your conversion rate is finding out why your transactions get declined. The more detail your provider can give you on this front, the better. For example, if most of your declines are associated with a particular bank, they may have adjusted their fraud rules. You can also track conversions by the type of card used, type of mobile app, and so on.

2. Cart Abandonment Rate

Many online shoppers seem to enjoy filling their carts, and then leaving before completing the purchase. The average abandonment rate over the last decade is about 70%. The question is: why does this happen in your store? Some common reasons include:

  • Having to create an account
  • Excessive extra fees
  • Trust issues with payment data
  • Slow delivery in the past
  • Lengthy checkout process

Tracking why your customers are abandoning the carts will help you figure out what you need to fix. Some possible solutions include making extra costs transparent, allowing customers to buy without making an account, and making the purchase experience more secure.

3. Payment Platform Uptime

Some issues that bring down your conversion rate may involve system failures. If this happens in a brick-and-mortar store, you may be able to rely on alternative solutions, such as credit card imprinters. In an e-commerce store, any platform downtime equals losing purchases.

This is why it’s so important to keep an eye out on your payment platform uptime. Ideally, you’d track both the instances and duration of your system failures. Though you can’t affect the performance of your chosen platform, you can decide to switch it out for another one.

4. Refunds and Chargebacks

Your chargeback rate is the biggest fraud-like scenario you need to monitor closely. On one hand, chargeback issues aren’t always about fraud. They can also be the result of legitimate grievances, such as your customers seeking a refund. Still, you should prioritize tracking your chargebacks and trying to reduce them as much as possible.

The reason why this is important is that processing too many chargebacks can cause you to end up on the Mastercard Alert To Control High-risk Merchants (MATCH) list. This is a record of merchants considered to be too risky to do business with.

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