How to improve your transaction success rate

Running a business can be a complex and stressful experience, but there are some aspects which are relatively simple. One of these is the basic principle stating that you want to get paid for the goods or services which you provide. In the past, this was a simple process because it merely involved taking cash payments from people visiting a bricks-and-mortar store. The rise of digital technology has changed all of this.

What is transaction success rate?

Transaction success rate (TSR), or payment success rate, is the percentage of attempted transactions that are completed successfully. 

It is usually expressed as a percentage, so the number reflects how many payments reach your business out of every 100 payments made to your app or website. If 70 out of every 100 payments are successful, then your payment success rate is 70%. 

This figure also includes the occasions when customers make a second or third attempt to complete an unsuccessful payment, so there may not always be an exact correlation between your payment success rate and the revenue your app or website is bringing in. 

Common reasons for lower transaction success rate are using payment methods that are less reliable, like cards, poor internet connection, errors with your payment provider, human error on the side of the customer, and more.

What are the challenges around transaction success?

In the digital age, merchants have to deal with two challenges regarding payment success rate:

• Taking payments using a range of different methods

• Taking payments remotely via an online presence

An ecommerce presence is now a necessity for virtually every business, and with online commerce comes the challenge of making sure that customer payments are processed safely and securely, and reach your business as quickly as possible. 

That’s what your payment success rate is all about, since the better the payment success rate, the better your cash flow, customer satisfaction and net profit are. In this article we explain how to improve your transaction success rate through a few relatively simple measures.

How to improve your payment success 

According to our own research, credit card payments fail 10–15% of the time, while other statistics show that 62% of customers who experience a failed payment opt never to return to the website in question. Therefore, finding ways to improve your transaction success rate is really important for your business.

First, recognise what factors are affecting your transaction success rate.

Factors impacting transaction success rate

There are many reasons why a payment potentially fails. In some cases, a customer might incorrectly enter a one-time password, or there could be a problem with the response from the payment provider. Amongst the most common causes of payment failure are the following:

• The customer takes too long to finish the payment process

• The customer cancels the payment 

• The process fails at the level of either the bank or the payment provider

A large percentage of failed payments can be put down to action – or inaction – by the customer. One of the ways to minimise failed payments of this kind is to make the experience of shopping on your website or app as user-friendly as possible. There are various ways to do this:

• Make the journey to checkout as frictionless as possible. The one-click payment method is a prime example of friction-free purchasing, where the journey from wanting to purchase an item to actually paying for it is as quick and simple as possible. The more steps involved in moving from placing an item in a cart to successfully paying for it, the more likely it is that the payment fails at some stage. Abandoned carts often happen because the shopper decides that the process is taking too long and involves too much effort. In the digital age of instant gratification, paying for your purchases has to be just as effortless as every other online interaction.    

• Allow guest checkout. Don’t insist on customers setting up an account in order to make a purchase. Enabling guest checkout makes it far more likely that a first-time customer completes their purchase, and the retention of contact details means it is possible to reach out subsequently to try and create a more long-term relationship. 

• Offer a variety of payment methods. Working with YouGov, we carried out a survey of 19,000 businesses and consumers in major markets around the world to determine which payment method was most popular in each major global market. The details can be found here, but the takeaway is that people around the world want to be offered a range of payment methods so they can use the one which they prefer in each instance. If they can’t find their preferred method – from bank debit to digital wallet or credit card – they may abandon checkout.

How can you improve your transaction success rate?

It’s clear that reducing friction, using a reliable payment processing method, and offering the desired customer experience are vital to maximising success.

Using a modern payments solution like GoCardless enables you to access reliable and secure payments easily, with added intelligence features like Success+, which automatically retries payments at the next best time if they do fail.

We can help

GoCardless is a global payments solution, setting people and businesses free from the frustrations and cost of outdated payment methods. Find out how GoCardless can help you with one-off and recurring payments.