Cost reduction through competitive routing was selected least often among nine benefits, at 19%, yet 60% of respondents measure payments optimization by processing cost and only 25% say it is a top-tier strategic priority with board-level visibility.
Access to richer payments performance data across all channels was the payments orchestration benefit retail payments professionals selected most often, at 47%, according to new research from ACI Worldwide , an original innovator in global payments technology. Respondents could pick up to three from nine options, and reduced payment-processing cost through competitive routing was selected least often, at 19%. The research was commissioned and funded by ACI and designed and fielded by Retail Systems. The findings are published in the report, The Revenue Hidden in Plain Sight: Closing the Retail Payments Optimization Gap.
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Retailers rank richer payments data as the top benefit of payments orchestration, yet 60% still measure payments optimization by processing.
Payments orchestration is a platform that connects and manages a retailer’s payment ecosystem. It can provide the means for payments optimization, including the ability to route transactions, retry declined payments, and bring performance data from multiple providers together.
Key Findings at a Glance:
- Data outranks routing. Access to richer payments performance data across all channels was the most-selected orchestration benefit at 47%, followed by an improved ability to retry declined transactions without customer friction at 44%. Reduced payment-processing cost through competitive routing was selected least often, by 19%.
- Cost-centric scorecards. The cost of payment processing is how 60% measure the success of payments optimization. Revenue directly attributed to payments performance gains is used by 37%, and 9% have no defined metrics at all.
- Limited board visibility. Payments optimization is a top-tier strategic priority with board-level visibility at 25% of respondents’ organizations, leaving 75% who did not report board-level visibility for it.
- What retailers plan next. Over the next 12 months, 61% plan to engage external expertise or a managed optimization program, 57% plan to implement or expand a payments orchestration solution and 30% plan to adopt AI or machine learning tools for payments optimization.
- A visibility gap. Only 30% place their payments performance at or above market benchmarks, and 12% say they do not have enough visibility to assess it accurately.
“Payments teams are often asked to make a revenue case with a cost-centric scorecard,” said Dan Coates, Director, In-Store and Omnichannel at ACI Worldwide. “The question is how approval rates, declines and retries affect completed sales. Processing cost matters, but on its own it is only part of the picture, and in my experience the teams that can also show what payments performance contributes are the ones that get the investment.”
What retailers want from payments orchestration
Asked which benefits of payments orchestration are most relevant to their business, respondents could select up to three of nine options. Access to richer payments performance data across all channels was selected most often, by 47%, followed by an improved ability to retry declined transactions without customer friction at 44% and greater flexibility to expand into new markets or geographies at 36%. Routing-led benefits ranked lowest. The ability to route transactions across multiple acquirers to improve approval rates was selected by 26%, and reduced payment-processing cost through competitive routing by 19%.
How payments optimization is measured
Respondents could select all measures that apply. The cost of payment processing was the most common measure, cited by 60%, followed by customer conversion and basket completion rates at 58% and reductions in fraud and chargeback rates at 51%. Revenue directly attributed to payments performance gains was cited by 37%, and 9% said they have no defined metrics for payments optimization success.
Board-level visibility and planned changes
Payments optimization is a top-tier strategic priority with board-level visibility at 25% of respondents’ organizations, leaving 75% who did not report board-level visibility for it. Over the next 12 months, 61% plan to engage external expertise or a managed optimization program, 57% plan to implement or expand a payments orchestration solution and 30% plan to adopt AI or machine learning tools for payments optimization. Just 7% do not anticipate significant changes to their current approach. Respondents could select up to three planned actions, and these figures reflect stated intent rather than commitments already made.
Performance visibility and barriers
Only 30% of respondents placed their payments performance at or above market benchmarks, and 20% described it as adequate but below potential. A further 22% reported significant performance gaps they lack the resources to address, 15% reported underperformance relative to the market, and 12% said they do not have enough visibility to assess performance accurately.
Asked to select up to three barriers to improving payments performance, respondents pointed most often to internal resource or budget constraints, cited by 55%, followed by the difficulty of balancing fraud prevention against false declines at 35% and competing internal priorities slowing decision-making at 34%. Lack of clear ownership of payments optimization was cited by 32%.
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