Analytics powered by AI and machine learning technologies are a great match for e-commerce businesses across every industry. According to McKinsey, payment providers using machine learning stand to increase revenue from existing customers by 10 to 15% via new opportunities for upselling and cross-selling and improved customer segmentation.
Online payment processing is no exception, as AI solutions deliver value at different stages in the payments value chain – from approval rates and fraud detection to a better checkout experience.
Boosting payment performance
False declines are one of the most expensive mistakes of an e-commerce business. When a customer’s payment is incorrectly rejected after they initiate the transaction, the customer is far more likely to abandon their cart and turn to competitors.
Even though a majority of merchants have implemented advanced analytics such as churn rates and lifetime value, AI-based algorithms can correctly identify and flag true anomalies, replacing the rule-based system with a far more accurate solution.
As a merchant, if your approval rate is below 90%, it’s time to take action. First, understand why online transactions are failing, and this is where response codes come in handy. Make sure that your payment service provider shares these data points with you – or, better, use them to solve this problem automatically using sophisticated AI algorithms.
The PayU payment orchestration platform features analytics tools that help merchants keep track of payment approval rates by card countries, currencies, payment methods, and issuing banks and identify trend and year-over-year growth by using the historical data.
Handling segment-related peak season challenges
Some merchants may experience high volumes of relatively small payments to process during peak season. They need to have the right infrastructure to manage this extra load. Meanwhile, high-end and luxury e-commerce segments observe the reverse: fewer expensive transactions from wealthy buyers.
To solve both peak season scenarios, merchants need to ensure that their payment service provider can address the following issues: handling a large volume of online payments gracefully, while also supporting a broad range of payment methods.
With PayU’s payment orchestration layer and robust smart system, merchants can manage peak season efficiently while also providing a great checkout experience.
The benefits of local acquiring
Merchants looking to increase their approval rates should also implement a local acquiring strategy in key markets. Local acquiring gives you a competitive advantage in reducing processing costs and improving authorization rates. Again, this is a service you can expect from a payment service provider using innovative technologies.
Finally, merchants should refine their retry logic if a payment fails due to a technical error, such as a timeout. PayU’s platform includes the Smart Routing Engine – an end-to-end routing solution that lets merchants route payments to their optimal payment provider, perform A/B testing of the providers’ performance, and boost performance all-around with smart reporting.