Driving Business Growth with Payments Data

Far too many companies are deeply underutilizing their payments data. Transactions are going through and revenue seems to be flowing smoothly, so what is there to discover in the data?

So much.

Payments data is one of the richest datasets a business generates, identifying who your customers are, how they prefer to pay, and how your payments setup is serving them. Buried in it are things you might not think to look for, like quietly churning subscribers or bugs in your code that leave your business vulnerable to fraudsters. You just need to know where to look.

We work with merchants who've found exactly that kind of thing hiding in their data once they finally had clear visibility. Here are three examples, each one a version of the same reaction: “Wait, we can see that?!”

Catch a Visa Problem Before Visa Tells You About It

Visa's Acquirer Monitoring Program (VAMP) replaced its older fraud and dispute monitoring programs earlier this year. They now calculate a single rate, combining your early fraud warnings (TC40 reports) with both fraud and non-fraud chargebacks (TC15 reports), and dividing them by your settled card-not-present transaction count. The threshold for landing in Visa's "excessive" tier is 1.5% for most merchants.

Unfortunately, Visa doesn't provide an easy way to calculate and monitor your VAMP ratio. You’re left to figure it out yourself, lest you risk crossing the threshold and finding out how bad your numbers are after Visa penalties have already kicked in.

Pagos merchants don’t have to wait for Visa to tell them they’re in trouble. The Chargebacks Metrics dashboard in Pagos Insights provides them with a single place to monitor their VAMP rate fluctuations in real time, across all transactions ingested directly from Stripe, Adyen, Chase, or via API for other processors. One of our merchants started using this visualization weeks before VAMP officially kicked off. When their rate started climbing, they tweaked their fraud rules immediately. They still crossed the threshold, briefly hitting 1.6%, but corrected course and were back under it within a month.

Compare that to three years ago when they spent five to six months trapped in card network monitoring programs while they sorted out a solution. Wrangling data, waiting on processor reports, and actually making fraud rule adjustments took time, and every minute spent on a fix meant more penalty fees and lost revenue. Same company, same situation; the only thing that changed was how quickly they could find the issue and correct it.

(Learn more about monitoring your VAMP exposure in this blog post.)

A Decline Isn't Always a Lost Customer

Subscription renewals are going to fail sometimes. Your payment operations and retry strategy dictate when those failures result in customer churn. 

A Pagos merchant recently learned how “shockingly low” (their words) their renewal approval rate was. When they dug into the reasons behind these declines, they discovered close to half were insufficient funds declines; customers weren’t choosing to leave, they just didn't have the money in their accounts at the exact moment of the subscription renewal charge.

That's a very different problem than losing a customer, and it comes with a very different fix. Using the Retry Performance dashboard, you can see which decline reasons are actually worth retrying and which ones aren't. For example, a closed account rarely converts no matter how many times you try it, but insufficient funds declines often do—especially if you wait and retry at a smarter time. That distinction let this merchant build a retry strategy around the declines that were actually recoverable, turning what looked like renewal churn into revenue they'd nearly written off.

For them, retries were even more compelling given how expensive it already was to acquire each customer within their target market. If you’re like them, and you spend real money attracting subscribers, a little more effort understanding and optimizing renewals is cheap by comparison.

Sometimes a Payments Bug Isn't a Payments Problem

Another Pagos merchant found an issue in their payment processing that didn’t even stem from their payment operations. It started as an engineering change on a completely unrelated part of the platform, made by a team that had no idea it touched payments at all.

The change inadvertently turned off device data capture, the information collected on each transaction and passed to Braintree to power its fraud scoring. Nobody on the engineering side connected that change to fraud outcomes, but once device data stopped flowing, Braintree's fraud model lost a key signal and chargebacks started climbing.

The merchant caught it in their chargeback chart before it became a real problem, then went looking for the cause. Filtering approved transactions by Track Device Data, they spotted a spike in Braintree transactions with no device data attached at all, traced it back to the engineering change, and got it reversed. They then built a custom chart to monitor device data capture going forward, so if it ever silently drops off again, they'll know the same day instead of finding out through a chargeback spike weeks later.

Payments data can reflect whatever the rest of the business is doing, whether that's a marketing campaign, a routing change, or a code change nobody flagged as payments-relevant. If you're only looking at it once a month to confirm the totals, you're missing what it can tell you about the rest of your company.

Don’t Treat Payments Data Like a Report Card

These examples realistically represent the kind of things sitting in your transaction data. You can either monitor your payments data and catch them now, or wait until the end of the quarter when you're drowning in fees, churn, or chargebacks that demand your attention.

Payments data is way more than a basic report on what you sold and how much it cost to accept payments. Look closely enough, and it becomes a strategic asset for catching fraud and maintaining your customer base.

Ready to start making better use of your payments data? Sign up for Pagos today.