Payment analytics: 7 metrics you should actually track

You have a great product, but the desired revenue level remains out of reach? One reason could be your payment setup. It doesn’t mean you have to change everything. Analysing payment data from your merchant services can point you to the problem.

But what exactly is ‘payment analytics’ and which metrics should you focus on? In this article, we give you answers to these questions and more.

What is payment analytics?

When working with a payment service provider (PSP), you have access to a dashboard with different data. You can see, for example, that payment X was declined with error code Y, or transaction Z was successful. This information may look like a set of dry facts, but it can provide you with insights into customers’ preferred payment methods, underperforming channels, and reasons for failed transactions.

The key lies in the approach: simply collecting data or analysing it. What’s the difference? Data collection tells you that the conversion rate dropped by 5%. Payment analytics reveals that transactions from the UK routed through a specific acquiring bank were declined due to technical timeouts.

Once you understand the problem, you can solve it. In simple terms, payment analytics is the process of collecting and studying data from merchant services to turn it into revenue-generating insights.

Why does your business need payment analytics

Transaction analytics helps you understand where you’re losing money and improve:

• Conversion. If the conversion rate in a specific country drops, it might be because customers can’t find their preferred ways to pay. Adding local payment methods to your checkout can improve the situation.

• Revenue. Your revenue can slip away through hidden costs, and payment analytics helps spot where exactly it happens. Looking at how transaction processing fees vary by payment method, you can strategically add or remove options at checkout and find the balance between what works best for you and your customers.

• Customer experience. Payment analytics shows at which step card abandonment happens. You can use this information to improve the customer experience. If, for example, payer churn is high at the SMS code stage, try adding options with more “invisible” authorisation, such as digital wallets.

7 Key payment metrics you need to track

To move from basic tracking to strategic optimisation, focus on these metrics:

1. Approval rate shows the percentage of successful transactions.

2. Decline rate provides insights into the percentage of transactions rejected by the processor, gateway, or issuing bank.

3. Payment success rate is the ratio of completed payments against all attempted checkouts. It tells you how well your payment system handles traffic spikes.

4. Conversion rate is the percentage of website visitors who completed a purchase. It helps you align your payment performance with marketing spend and understand how functional your website’s layout is.

5. Chargeback & refund rates allow you to evaluate customer satisfaction with your product and the level of fraud.

6. Average transaction value (ATV) shows the average amount a customer spends per purchase.

7. Payment method performance lets you track which methods deliver the highest conversion rates in each market.

Identifying revenue leaks

Data analytics helps find where customers experience friction during shopping on your website and where your transaction processing isn’t performing well. Common payment bottlenecks and revenue leaks are:

1. Checkout & UX friction

Too many form fields and a lack of preferred payment methods lead to frequent card abandonment. To prevent this, ask only for essential info, provide a mobile-optimised layout, and partner with payment service providers that offer a broad range of payment solutions.

2. Technical issues 

Many things can go wrong during payment processing. Cross-border friction, technical glitches and systems incompatibility often lead to declined transactions. Smart payment routing can be a big help here: it ensures smooth processing and prevents lost sales.

3. Operational risks

Security issues or poor product quality fuel chargebacks. Frequent disputes, in turn, result in lost revenue, additional fees, and, in severe cases, the suspension of your merchant account. Plus, a low average transaction value (ATV) means that transaction processing fees eat into your profit margin. It’s a sign that your sales model is inefficient.

Gain ultimate payment insights with Payop

Payment analytics is key to turning the data you collect into profit. At Payop, we understand this. That’s why we offer a dashboard that includes all the key metrics you need to track to improve your payment strategy. You can generate reports for various time periods, monitor and analyse your financial flows, and choose payment solutions that perform best.

If you wish to include more local payment methods or offer alternative options like Pay by Bank, Payop has you covered. Our broad selection of methods helps you satisfy customers’ needs, regardless of the region you operate in.

Ready to turn payment data into insights that grow your bottom line? Contact us at sales@payop.com.