Insights Magazine from CMSPI
Page 7 | November 2021
Threats to Transaction Productivity
In most cases, these issues impact lots of parties in the supply chain, but it’s difficult to resolve because each lacks the data, resources and ability to communicate given that doing so would require sharing information with competitors. In this article, we follow the life-cycle of a single card transaction from checkout to billing, asking which pain points most threaten a merchant’s transaction productivity and how to resolve them.
The various determinants of a transaction’s productivity can be overwhelming for merchants looking to take stock, especially as consumer demand for frictionless checkout increases and suppliers vie for merchants’ attention with a host of seemingly unquantifiable benefits. Many merchants have attempted to mitigate risks at a price – from buying approvals-boosting ancillary products to adding orchestration layers to their payments supply chain. In doing so, however, their costs can rise further and cause overall productivity to decline. We’re trying to say: you should be able to have it all. In CMSPI’s experience, many of the issues merchants and their suppliers experience are inherent in the structure of the payments industry.
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Before a purchase is made, transaction data can be used to support personalized and measurable marketing programs. During a transaction there are opportunities to manage transaction costs without increasing fraud risk or transaction declines. And finally, after the transaction, payment reporting and analytics can help merchants identify and respond to trends that could impact efficiency and profitability.
Maureen Elworthy, J.P. Morgan
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