Getting Ahead of Payments as a Head of Payments – Part Two
Our payment experts provide three industry trends merchants should be watching and a few words of wisdom for those seeking to better understand their data in this two part blog series.
In Part One, we discussed two payment trends merchants should be watching when analyzing their data. Up next, we will reveal the third payment trend and a few words of wisdom from our payment experts.
PINless
It’s been almost three years since the Federal Reserve’s Regulation II PINless clarification which specified “card-not-present transactions are a particular type of debit card transaction for which two unaffiliated networks must be available.”1 This has opened savings opportunities for merchants; however, its implementation doesn’t come without challenges. As a result, the Federal Reserve reports a continuous shift of card-not-present transactions towards dual-message networks.
“Putting pen to paper on network agreements doesn’t always ensure savings. Merchants need to be vigilantly monitoring their data, working with their processor/processors, and keeping contact with their partner networks to ensure the following:
1. Optimal routing decisioning is in place – either through ML models with appropriate consideration for network incentives, or accurately constructed routing tables if via the processor. While many merchants will focus on maximizing performance through authorization or cost reduction on a transaction-by-transaction basis, many also require consideration for volume thresholds and other commercially agreed restrictions. Monitoring routing orders. Monitoring routing orders is an ongoing process, one that will need to continue throughout the life of a merchant’s current network deals.
2. Ensuring that the proper interchange and scheme (network) fees are implemented. Merchants must work with both their processor and the card networks they have partnered with in order to ensure the proper implementation of incentive pricing. To achieve maximum savings, merchants must be vigilant and monitor their data to verify they are still receiving this pricing ongoing.
If there is an issue with either or both, there could be a significant impact to overall savings or an impact to agreed-upon network requirements.”
Damian Diaz, Associate Consultant, CMSPI
For merchants who have PINless enabled, it’s important to keep a close eye on its implementation. For those who haven’t enabled PINless, understanding your card-not-present debit volume and weighing the cost of implementing PINless could have a great impact on your payment strategy.
3 Words of Wisdom from Payment Experts
1. Familiarize yourself with your data.
Any dataset can be intimidating to begin analyzing; make that a payments data set and it’s basically like learning a new language. Our experts who work each day with our clients’ data remember what it was like to start their journey and – as simple as it sounds – say that spending more time in the reports and familiarizing yourself with the data is the best way to become more confident with it.
2. Industry collaboration is invaluable.
No merchant should be an island. There are plenty of opportunities for merchants to collaborate, including CMSPI’s Executive Forums and monthly townhalls, where they can share experiences and knowledge. Being open to learning from other payment leaders in the industry is key to understanding your data better.
Our flagship annual event Client Connect is being held on October 7th and 8th this year and is a great place to start for Payments Managers looking to get more actively involved in the merchant cause.
3. You don’t know what you don’t know.
The intricacies of payments mean that knowing what ‘good looks like’ is impossible for an individual merchant. There are simply too many variables influencing payments performance to be able to conduct a benchmarking exercise by MCC, industry, product, or setup. The only way to truly understand how your payments are performing is by seeing the best possible performance for that exact transaction’s characteristics – something we at CMSPI have been staunch believers in for many years. Our focus on investing in a platform that enables merchants to see this true assessment of performance continues to drive significant value for the world’s largest and most sophisticated companies
Conclusion
From our payment experts to yours, we hope these trends and tips can make your experience with payment data a little less dauting and a little more productive. CMSPI’s Merchant Payments Intelligence allows our analysts to see market-wide trends and help our clients navigate their payments data, creating a strategy unique to them and their goals. A huge thank you to our analysts for providing insight into what payment trends to watch out for and sharing a few tricks of the trade.
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