In the world of online payments, the term Transaction Success Rate gets used quite often and with good reason.
Transaction Success Rate reflects how your online business gets paid and how the experience is for your customers. If you have low transaction success rates, that could mean trouble for your online business.
Low transaction rates can cause online businesses loses up to 30% of their revenue. It can also lead to 33% of your customers experiencing declines, creating a poor brand reputation.
What exactly is Transaction Success Rate?
TSR is the percentage of completed payments and shows how many payments got to your business for every 100 payments that customers make on your shopping app or site.
For instance, if a hundred payments are attempted on your site and eighty-five go through successfully, your transaction success rate is 85%. The rate won’t reflect your revenue since the payment attempts also include customers re-attempting to pay failed payments.
However, about 33% of customers won’t re-attempt a failed payment. Most customers are looking for a flawless payment process, and if they are frustrated when making payments, they will abandon the whole process.
Unlike other reasons for cart abandonment, payment failure is one of those determinants that merchants have no control over. So it means that all the marketing funds used to obtain those leads are wasted.
What affects Transaction Success Rate?
Since transaction success rate is measured by the transactions that have gone through, understanding what causes it is essential, and you should start by assessing payment failures.
Payment failures are caused by incorrect OTP, incorrect card details, or delayed response from the payment gateway. These are just a few causes that may affect your transaction success rate. Here are more reasons that may affect your transaction success rate.
Some of the more common reasons include a customer taking too long to finish their payment, canceling the transaction, or the payment processing platform was experiencing downtime.
Customers usually account for about 67% of all payment failures. While some of it can be deliberate, some can be unavoidable cancellations, such as if the customer has insufficient funds in their account. Other instances are if a customer attempts to pay through maxed out, blocked, or stolen credit cards.
Another reason is the issues with the payment provider. If the payment provider or the issuing banks are experiencing problems or downtime, the transaction won’t go through, which accounts for a payment failure.
About 20% of payment failures result from transaction errors between the payment provider and different intermediaries’ payment ecosystem. A few payment ecosystem players are card networks such as Visa, MasterCard, American Express banks, or payment processors.
Why is Transaction Success Rate significant?
In the world’s increasing desire to shop online, revenue from eCommerce has increased. Consumers want a smooth shopping experience, and failed transactions are a frustration that could cost you revenue and customers.
In the digital world, the transaction success rate is essential, and it reflects how you get paid for your goods or services. It also reflects how easy it is for your customers to purchase products or services from your business.
Low transaction rates can affect your business, and you could lose up to 30% of your revenue.
How can you improve the Transaction Success Rate in your business
There are numerous ways you can try as an online seller to stop payment failures and enhance the transaction success rate.
Create a simple checkout page – if you create a smoother checkout process for your customers, you will have few issues with customers canceling payments or abandoning their carts at checkout. Ensure that your checkout page is simple and doesn’t have complications that may frustrate your customers.
Have fewer steps during the payment process – ensure that your customers don’t need to fill in so many details during checkout. You can reduce the steps to make it less tedious for your customers. Only ask for their contact information, card details and create a less tedious process. You can have a “remember me” option for returning customers, making the process even quicker.
Don’t make account creation mandatory for customers – while getting your customer’s detail is essential for any business, don’t make it compulsory for customers buying from your website or shopping app for the first time to create an account with you.
Doing so may make some customers stop the entire payment process. Enable customers who don’t have an account on your website to pay using the guest checkout option and collect their email and other details needed for delivery.
Include different payment options – to increase your customer base and ensure a smooth and flexible payment option. Ensure you provide your customers with numerous payment options.
Cart abandonment and payment failures sometimes occur when customers can’t find their preferred payment method.
More innovative routing – about 27% of most payment failures are due to issues with the payment ecosystem, which can be avoided. If your business is integrated with multiple payment gateways and one server is experiencing system downtime, the other servers can hold down the fort and ensure business payments go through with no issues. Using more innovative routing options can increase your revenues by 10% because of an increase in transaction success rate.
Multiple payment gateways also help as your business grows and your transaction volumes increase. This helps avoid system downtimes when you have many customers shopping at the same time.
Save customer information – save your customer’s payment details to ensure a faster payment process when they return to your site to buy stuff. Integrating this future can save your customers time, especially when they have to enter their card number every time.
Transaction Success Rate is an essential factor in your online business. Ensure you provide your customers with an easy way to buy and pay for items and services on your site. Ensure you have identified the reasons causing a low transaction success rate in your business and implement the tips given in this guide above. Doing so will increase your revenue and the success of your online business.