Payment acceptance rates and what you can do to improve yours

How much attention are you giving to your payment acceptance rates? A single percentage point shift in one direction or the other could have a tremendous impact on your company’s bottom line. If you’re a director of payments or simply play a role in optimizing payments, we’ll break down for you the importance of payment acceptance and what you can do to boost payment acceptance rates that create new revenue streams for your company. 

What is payment acceptance? 

Payment acceptance refers to the percentage of payment attempts that are successfully processed. A payment acceptance rate is the percentage success rate, which is also referred to as a payment authorization rate.

An accepted payment is any payment that is processed. A rejected payment can occur for a variety of reasons, including: 

• Insufficient funds to process transaction
• Fraud attempts
• Expired cards

What kind of financial impact can payment acceptance rates have on a company? 

When a payment is rejected, it can lead to lost revenue. As the saying goes, “You only have one chance to make a first impression.” Even a situation as simple as a card decline (no matter the reason) could lead to a prospect or customer turning to one of your competitors to do business with instead. While it’s harder to find B2B numbers, 36% of consumers said in a survey that digital payment acceptance is a top factor in their purchasing choices. 

But it’s more than just the direct user experience that causes revenue to drop due to a rejected payment. Your ability to mitigate fraud and operate efficiently (by not tying up team members with resolving declined transactions) are other ways payment acceptance can impact revenue. 

Should you take your payment acceptance rate at face value?

Definitely not. There are a variety of factors that should be considered before you jump to any conclusions, including: 

• Different industries have different average acceptance rates. 
• Your customers’ locations can also influence acceptance rates. And if you are a global company, that also will complicate your rate.
• If you have a subscription element to your business, that can also influence rates. 

You’ll want to consider these factors among others when evaluating your acceptance rates.

What can you do to improve payment acceptance? 

There are a number of ways you can boost payment acceptance and the overall customer experience, including: 

• Expand your payment options. Offering a variety of payment options can increase the potential for payment acceptance. Payment options to consider include virtual payments, mobile payments, digital wallets, subscription payments, ACH transfers, credit cards, and debit cards. 
• Simplify the experience. Identify ways to make the purchase process as easy as possible for the purchaser. Simplify forms and reduce the touchpoints needed at the start of the payment process. 
• Analyze your analytics. Dig into your payment analytics to better understand what is causing payment rejections. Are there any trends? Are there any factors that should be filtered out to give you a clearer picture of your payment acceptance rate? 
• Harness the power of tokenization. One way to reduce fraud and better protect card data is through tokenization, which replaces original card data with a unique, generated “token.” Tokens are randomly generated and have no value to fraudsters by themselves, which means tokenization can reduce fraud and improve your payment acceptance rate.
• Implement more fraud protection. By reducing false declines, you can improve your acceptance rate. To do that, enhance your fraud prevention systems to better identify fraudulent transactions without declining legitimate ones. 

Learn 5 ways you can prevent fraud in accounts payable by clicking the handout below!

The information in this blog post is for educational purposes only. It is not legal or tax advice. For legal or tax advice, you should consult your own legal counsel, tax and investment advisers.