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In the world of digital payments, there’s a crucial metric that businesses can’t afford to ignore—the ‘Transaction Success Rate.’ This isn’t just a fancy word; it’s an actual measure of how well businesses handle online transactions. Low success rates impact the overall conversion and revenue of the company. Moreover, they can also jeopardise a brand’s reputation and customer relationships.
What is ‘Transaction Success Rate’?
Simply put, Transaction Success Rate or Payment Success Rate tells us the percentage of successful transactions by your customers while trying to purchase your product/service. This metric acts as a report card for reliability and efficiency, mainly talked about in areas like online shopping, finance, and payment processing.
In mathematical terms,
Transaction success rate = (Number of successful transactions/Number of total transactions attempted)*100
For instance, if 100 transactions were attempted and 95 worked, the success rate would be 95%. Now, if your customer reattempts a failed transaction and it goes through, your revenue will not be affected. However, 33% of failed payments are not retried – which makes transaction success rate an important metric for businesses.
Why do transactions fail?
Exploring why transactions fail doesn’t point to a single reason. These reasons range from delays caused by customers to cancelled transactions or processing issues. The consequences of payment failures are multifold; losing revenue, unhappy customers, abandoned shopping carts and decreased brand value being the key ones. This highlights the need for businesses to understand why transactions are failing and increase success rates.
We have identified three main causes for payment failures:
- Payment delays caused by customers
- Cancelled transactions by customers
- Processing failures.
While we cannot solve for payment delays and cancelled transactions by customers, we can focus on keeping the processing failures to a minimum.
In a country like India with 350 million online users, a smooth payment experience is a must. If one-third of customers give up on a purchase because the payment didn’t work, and nearly 30% of abandoned carts are linked to payment issues, that’s a lot of lost business. Improving the Success Rate could mean up to 30% more revenue for a business.
As online transactions become the norm, businesses need to step up their game to keep customers happy. Making sure that transactions don’t fail isn’t just about making more money; it’s a smart move for any business wanting to stay competitive.
Solving the Problem: Payment Orchestration
Payment Orchestration or routing is like a tech-savvy conductor bringing together different payment methods and technologies. With payment orchestration, businesses can integrate and manage their entire payment process – from payment authorisation to transaction routing to settlements. It gives businesses complete control over how they collect payments.
A comprehensive solution to streamline transaction processing, a payment orchestration solution integrates various payment methods and technologies, allowing merchants to manage multiple providers through a unified platform. Using multiple payment gateways is one of the surest ways to increase transaction success rates and payment orchestration is the surest way to manage multiple payment gateways at one place.
How Payment Orchestration Helps with Success Rates
Seamless Checkout Experience for Customers: A payment orchestration platform is a strategic tool for businesses aiming to provide a hassle-free and cohesive checkout process across various payment gateways (PGs). Payment orchestration automatically routes the customer to the payment gateway with the highest success rate to reduce the risk of customers abandoning their shopping carts and contributes to a tangible boost in conversion rates.
Efficiency through Saved Payment Information: Your product/service is great and keeps the customers coming back for more. However, entering payment details each time can be a significant deterrent to completing transactions for these customers. Payment orchestration enables customers to save their payment details and streamlines the purchasing process.
Diversity in Payment Methods: Adapting to the diverse preferences of customers is crucial. Whether it’s UPI, credit cards, specific wallets, or the growing popularity of Buy Now, Pay Later options, businesses need to ensure that their payment system accommodates all these methods. Online customers expect to have options and any business selling their product/service online has to ensure that they meet these expectations to ensure an overall positive experience with payments.
Strategic Routing Rules: A substantial percentage of payment failures arise due to processing failures, which are often entirely avoidable. Integration with multiple payment gateways allows businesses to strategically route transactions and avoid these failures. How? In the event of downtime or server problems with one provider, a dynamic routing system switches to an alternative provider, ensuring the payment process continues smoothly. While the upfront cost of integrating with multiple providers might feel like a deterrent, the potential 10% uplift in revenue by improving the payments success rate fully justifies the investment.
FlowWise: Revolutionizing Payment Orchestration
flowWise, by Cashfree payments, is a complete payments management solution that stands out for its innovative approach to payment orchestration. Leveraging an optimal machine learning algorithm for dynamic routing, it achieves a 10% higher success rate. With a cloud-native stack, minimal downtime, and zero third-party dependencies, FlowWise offers a comprehensive solution for businesses seeking to optimize their Transaction Success Rate.
Explore integrating multiple payment gateways with a single click using flowWise now:
To sum up
Prioritizing Transaction Success Rates is a must for any business having online payments for fostering customer loyalty and increasing revenue. Multiple payment gateways are one of the surefire and proven methods to improve success rates. Businesses can offset the initial cost and effort by a huge margin by integrating payment orchestration solutions like FlowWise, that are designed for scaling businesses.
