Adyen (ADYEN:AMS), the financial technology platform of for global businesses, has recently released a report titled Strategies to reduce your total cost of payments.
The research report, supported by data from 100 global, enterprise businesses, aims to highlight opportunities to boost revenue and “cut costs through the effective implementation of payments technology.”
The comprehensive analysis revealed “how much enterprise businesses can save on the total cost of payments, painting a clear picture: the right strategies will drastically save costs and gain revenue at scale.”
Businesses must evaluate payment providers “on more than price alone.”
Focusing solely on surface-level factors often “leads to hidden costs down the road.”
When it comes to the total cost of payments, the transaction fee “is merely the tip of the iceberg. Initial savings might not translate into long-term cost efficiency.”
Globally, interchange and scheme fees typically “make up 85% of the payment costs for businesses.”
Many transactions are treated as cross-border. Domestic transactions in the market where goods and services “are being sold are a lot cheaper than cross-border transactions. Up to 59% cheaper.”
For international businesses that “are thinking about expanding to new markets, this presents a big opportunity.”
Local acquiring and machine learning can “help optimize payments for cost, without having to sacrifice authorization rates.”
This is what Adyen’s Intelligent Payment Routing “does, which recently launched US debit payment routing.”
Strategic use of innovative solutions can reap great rewards. In the analysis, updating primary account numbers (PANs) in “real time saved these businesses $1.08 billion in the last 12 months.”
Additionally, the use of network tokens “increased authorization rates 6% compared to PANs. ”
Adyen’s analysis reveals that businesses “lost $474 million due to offline declined transactions in 2023.”
In 2023, the 10 largest businesses saved “two million in-person transactions or $42.1 million by using Adyen’s Store and Forward solution. ”
80% of retail transactions occur in stores, yet businesses often “lose significant revenue due to long checkout lines and poor payment experiences.”
Queue-busting solutions like self-checkouts and mobile POS (mPOS) systems are becoming essential, “allowing faster in-person payments and reducing wait times.”
Adyen’s research shows the benefits of “offering solutions that speed up transactions and provide customers with more flexibility in how, when, and where they shop will do for the bottom line.”
Adyen can help you “streamline your fleet management and launch new terminals in no time via a centralized back office, reducing Full-Time Equivalent (FTE) costs by up to 75%.”
Processing payments across geographies and channels “with a single provider will reduce complexity while freeing up resources, including in reconciliation departments.”
Research methodology
This report provides a detailed analysis of potential cost-saving opportunities, “focusing on a comparative analysis across the top 100 businesses based on processed volume globally within Unified Commerce and Digital.”
This analysis covers all cost optimization strategies “mentioned in the report for the period from June 1, 2023, to May 31, 2024, with the exception of two specific areas: Intelligent Payment Routing, where data is drawn from a pilot study on US Debit transactions conducted between 15th July to 15th August 2024, and Store and Forward, which includes aggregated data from the top 10 businesses using Store and Forward in 2023, as well as estimated data for the top 100 businesses based on declined in-person transactions during the same year.”
The aggregation of this data facilitates the “generation of comparative insights while ensuring merchant anonymity and data privacy.”
The data aggregation facilitates the analysis “of business performance, while also ensuring privacy.”