How payment institutions can leverage data to support merchant customers
By Sophie Flynn, CFO of Nucleus365, a UK-based payments institution offering a centralised platform for global payment processing, FX and connected banking
The volume and efficiency of cross-border payments have increased considerably over the past decade. Figures from Statista show that, in 2018, $124 trillion US dollars in cross-border payments were made. In 2022, that had risen to $150.7 trillion. Based on these transaction figures, it is projected that the volume of cross-border payments will continue to rise annually.
There are several reasons for the industry’s impressive growth. Innovation in technology has made transactions easier and quicker to complete. Such innovation has been led by a new wave of payment institutions who are exploring how technology can be deployed to speed up and simplify transactions. Combine this with a merchant customer base that has a collective desire to invest in the latest payments technology, and the sector is booming.
This innovation, however, could not have come without the crucial data that underpins every transaction. Regardless of sector, any company challenge can be addressed through the effective leveraging of data. It is arguably the backbone of everything we do in business. And for the ongoing facilitation of effective cross-border payments, data is critical.
Real time analytics
Adaptability is key in any business, particularly for merchants in emerging markets, and having access to real time data and analytics means payments businesses and their merchants can be agile when needed. Where this is particularly beneficial is in the detection of fraud.
The digital payment model and the large volumes of cross-border payments being made hourly means there are multiple channels and parties involved in a single transaction, increasing the risk of fraud. In fact, the e-commerce industry loses almost £17.5 billion as a result of fraud every year.
Having access to real time analytics means payment institutions can better support their merchant partners by monitoring customer activity as it happens and identify and investigate any suspicious activity before any financial loss is incurred.
Similarly, this real time data can shape merchants’ entire business strategies. The ability to provide retailers with unparalleled insight into consumer behavior and sales trends in real time allows merchants to make short term changes to capitalise on daily spending trends, while shaping long-term sales strategies.
This granular insight is key for forecasting too. As a payment institutions and merchants’ partnership grows, so too does the volume of historic data that has been accumulated. This allows payments organisations to support and guide their merchants during times of predicted peaks and troughs in demand, to ensure retailers are prepared to capitalise on market opportunities.
Easy to understand interface
The amount of data payments providers and merchants collect is a blessing, but it can also be a curse if it’s not usable or presented in an easily digestible way. Having a real time dashboard with a simple interface means merchants can quickly view payment volumes, transaction activity, account information and more with just a few clicks. Without this ability, a business will struggle to be truly agile when responding to market conditions.
A dedicated service
Data is core to Nucleus365. As an Authorised Payment Institution, our goal has always been to support the growth of our merchants which is why we offer them access to data acquired through our platform. In addition, however, we provide a deep data analysis service to provide the additional insight needed for merchants to make important decisions.
In today’s world, leveraging data is the key to any successful business. The payment institutions who allow their merchant customers to collect and utilise this data most effectively will be the ones responsible for the next iteration of exciting new innovations in the payments space.
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