By Brandon Banks
In today’s rapidly changing business landscape, payment processing has become a crucial factor in shaping the success of a business. A well-planned payment strategy can be the key to creating a smooth purchasing experience for customers, while also boosting a company’s bottom line. However, it’s easy for merchants to get caught up in the daily grind of running their business and neglect the important task of staying up to date on payment industry standards.
By taking the time to understand payment processing and implementing a well-designed payment strategy, businesses can set themselves up for sustained success. Payment processing is much more than just a necessary aspect of operations — it can be a powerful tool in business growth strategy.
The Need for a Future-Conscious Mindset
To truly succeed in the world of commerce, merchants must develop a future-conscious mindset. While it’s crucial to address immediate problems and find what works today, it’s equally important to consider the long-term implications of your decisions.
Your commerce challenges will only become more complex as your business grows. The decisions you make at the outset will directly impact your ability to adapt. This is especially true when it comes to payment processing.
For example, if you choose a payment processor that’s only capable of handling a limited number of transactions per day, you may find yourself scrambling to upgrade or change systems when your volume increases. This can lead to operational disruptions, customer dissatisfaction, and even impact the competitive advantage of your business.
Understanding and Overcoming Growth Blockers
A growth blocker is any complexity that enters your payment stack and inhibits business growth. Growth blockers come in many forms, including the following:
- limited international connectivity
- low authorization rates
- gateway outages
- payment processor friction
- merchant account shutdown
- fragmented payment flows and checkout experiences
- gateway lock-in
- limited payment methods
- high chargeback rates
- payment declines
- fraud
- and many more
To develop a future-conscious payment strategy, it might be helpful to imagine yourself as a mechanic running a diagnostic on a car engine.
Just as a mechanic would examine each part of the engine for potential issues, you should dissect your payment strategy to find problematic areas that could create growth blockers. Consider these three key questions:
- What are your growth blockers? Identify vulnerable components within your payment stack that need improvement, optimization, or replacement.
- What business outcomes are you striving for? Develop an optimal payments strategy that delivers desired results with minimal effort and costs.
- Is your payments strategy adaptable and scalable? Determine what’s working and what’s not. Does your payments strategy align with your long-term vision and organizational goals?
The 8 Components of a Payment Strategy
A payment strategy that’s future-proof and designed for long-term growth incorporates the following the eight components:
- Connectivity — In our globalized economy, it’s crucial to have the ability to expand into new markets quickly. A single, simple connection point that links a global network of payment processors and gateways is an asset.
- Security — In an age where data breaches are all too common, it’s essential to protect your sales and customers by preventing fraud and minimizing chargebacks.
- Recovery — Every declined transaction is a lost sale. Minimizing decline rates can significantly improve your bottom line.
- Adaptability — The payment landscape is continually evolving. To stay competitive, you need to keep your payment stack modern and be open to adopting new and innovative technologies.
- Control — Gateway lock-in can limit your flexibility. It’s important to have control over your processing data and stored tokens.
- Optimization — Making your transactions smarter by increasing authorization rates and reducing payment processing costs can lead to significant savings over time.
- Redundancy — No system is perfect. Having a contingency plan in place for declined transactions, gateway outages, and merchant account shutdowns can save you from unnecessary headaches.
- Optionality — Ensuring continued command of your payment strategy with gateway and processor choice, and the ability to evolve and adapt unrestricted, is crucial.
By integrating these components into your payment strategy, you’ll enable your business to adapt to changes and scale confidently.
Rather than being reactive, you’ll be proactive by identifying potential growth blockers before they become major issues. This future-conscious approach will empower you to navigate the complexities of the commerce landscape with ease, ensuring your business thrives today while also preparing it for the challenges of tomorrow.
Looking Forward
This is just the beginning. The payment landscape may be ever-changing, but with the right strategy, you can ride the wave of change and transform potential challenges into opportunities for business growth.
The importance of a strategic approach to payments cannot be overstated. While the day-to-day operations of your business are essential, taking the time to strategically plan for the future can set your business up for long-term success.
If you’re feeling overwhelmed and don’t know where to start, reach out to Nexio. Our team of experienced payment professionals will collaborate with you every step of the way while providing trusted advice and expertise. We strive to help you put together the ideal payment strategy, allowing your business to grow and compete in today’s increasingly challenging environment. Start making strides towards long-term success by taking control of your payment landscape — contact us today!