Maximizing Revenue and Streamlining Operations With Cost Data

Payment processing fees are complex and an ever moving target. In a recent blog post on optimizing the total cost of payment acceptance, we dug into many of the different fees and costs associated with payment processing and even offered some solutions for keeping costs low. Today, we’re going to explore cost metrics a little differently; instead of seeing them only as a heavy burden every commerce business must bear, we’ll reframe them as an important data stream that can drive different aspects of your business. Whether your focus is on maximizing revenue, pricing your products, or simply deciding what types of information you should ask consumers for or send with each transaction, fee data can guide your strategy.

We’re not talking about just any fee data, but specifically the fee data available for download through our brand new payments data streaming service, Puffin. Puffin by Pagos ingests all of your payments data via our no-code data connections and harmonizes it together into downloadable reports you can integrate into any workflow or tools you already use. Even more, you can set up Puffin to automatically generate and send you these reports on a monthly, weekly, or even daily basis to power even more powerful workflows. Let’s explore how Puffin’s downloadable cost reports can change the way your business thinks about and integrates fee data into your existing processes.

The Value of Puffin Cost Reports

Peacock—our data visualization platform—contains a Costs dashboard with various graphs, all demonstrating your fee volume over time, broken down into cost categories and subcategories. This is an invaluable tool for establishing your cost baseline and spotting trends in the types of fees you pay. But what happens when the amount of money you're charged in specific categories or subcategories changes unexpectedly? To determine how to respond, you’ll want to dive into the details of your specific fee statements or invoices; depending on what you find, you may want to change your processing strategy or reach out to your payment service provider (PSP), acquirer, or even Pagos for help.

And where can you dig into those details? In your Puffin cost reports! 

Empowering Vendor Management and Optimization

Managing vendors and partners and optimizing fee structures can be a time-consuming process, often requiring both engineering work and manual data extraction. With Puffin, we've simplified this process, allowing businesses to manage vendors more effectively without any extensive internal effort. In other words, Pagos does the work for you so you can find actionable insights in your data faster.

For example, let’s say you’re regularly reviewing the Cost dashboard in Peacock and monitoring your share of fees in the penalties subcategory. Card brands typically charge penalties in response to your processing behavior and the information you send to your PSP when authorizing or settling transactions; as such, these fees are directly related to things that are in your control to varying degrees. When looking at your data for the last three months, you use the Peacock Compare To filter to see how your penalty fees from December 2023 - February 2024 compare to your average penalty fee amount from the previous period (September - November 2023):

You notice that your penalties crossed $200,000 in January, which is above the previous amount. The next step is to open a discussion with your PSP or your own engineering team about what behavioral changes you could make to reduce penalties, such as adjusting your retry strategy or sending postal code with all transactions. Perhaps you have a bug that you had not spotted, or your acquirer has actually changed their implementation with the networks on how they process (since there are quarterly updates!). Identifying exactly what changes to make requires you to dig into the specific details behind any penalties you’ve paid—details that are easily accessible in your downloaded data from Puffin. 

In your Puffin cost report, you can quickly extract penalty line items to explore with your PSP account manager and discuss areas for improvement. And this is only one example—you can dig into this level of detail for all fee types that make up your total costs! Depending on your use case, you can dig into the line-item details of any fee, including downgrades, changes to network assessments, and even network token or account updater costs. You’ll never have to fish out the details from old invoices again! Identify areas for improvement and drive cost-saving initiatives without monopolizing time and resources from your operations teams.

Improving Revenue with Cost Data Integrations

Revenue growth is obviously a top priority for your business—and arguably the biggest component of any payments optimization strategy. With Puffin's seamless data integration capabilities, you can enhance your revenue streams by directly incorporating fee details into your optimization strategies. A prime example of this is using fee data to design your retry strategy. 

Retrying transactions can greatly benefit revenue by flipping declined transactions into successful sales and therefore reducing churn while enhancing the Life Time Value of that customer; on the other hand, you pay for every transaction attempt (even if it fails) and card brands may even penalize you for excessively retrying failed transactions. As such, if your team wants to optimize your retry strategy, you must ensure the model takes into account all associated costs, including excessive retries. With Puffin you can schedule an automated report that delivers fee details to a secure file transfer protocol (SFTP) site on a monthly basis. Your payments optimization team can then pick up that report, filter to the specific fee line items associated with retries, and update their model accordingly. And because Puffin delivers the report continuously, you can track cost fluctuations as they happen and monitor if any changes you make to your retry strategy have an immediate impact!

Here’s an example of what that downloaded report looks like (note that we give a lot of visibility on the specific Visa and Mastercard fees):

Establishing a Single Source of Truth

The most obvious benefit of Puffin cost reports is simple: they provide you with a single source of harmonized fee data. For businesses working with multiple acquirers or PSPs, harmonizing fee data can be an extra challenge. Puffin addresses this issue by providing a single source of clean data for all transactions and fees across all partners. With this, you can quickly root out inconsistencies between how your vendors charge you and quickly establish the best routing strategy for different types of transactions. 

Get Started With Puffin!

When it comes to designing an optimized payment processing strategy, data-driven decision-making is more critical than ever. With Puffin, businesses can harness the power of payment fee data to drive revenue, streamline operations, and direct vendor negotiations. Puffin is your ultimate solution for payment fee management. Experience the power of Puffin and unlock new possibilities for your business today.