The definitive guide to Improving Payment Success Rates

Payment Success Rate (SR) is a critical metric for merchants as it directly affects their business operations and financial performance. SR measures the percentage of successful transactions completed by a merchant without any issues or failures. A high Payment Success Rate is crucial for merchants as it directly impacts customer satisfaction, revenue generation, operational efficiency, reputation, and relationships with payment providers. Monitoring and striving for a high SR is essential for merchants to thrive in the competitive marketplace and build a successful and sustainable business.

What is Payment success rate ?

Payment Success Rate is a metric that measures the percentage of successful transactions completed without any issues or failures. It is commonly used in various industries, particularly in e-commerce, finance, and online payment processing, to evaluate the effectiveness and reliability of transactional processes.

The Payment Success Rate is calculated by dividing the number of successful transactions by the total number of attempted transactions and multiplying the result by 100 to obtain a percentage. For example, if a merchant attempted 100 transactions and 95 of them were completed successfully, the Success Rate would be 95%.

Payment Success Rate is an important metric for businesses as it provides insights into the effectiveness of their transactional processes and the overall customer experience. A high SR indicates that the majority of transactions are completed successfully, leading to customer satisfaction, revenue generation, and a positive reputation. On the other hand, a low SR may indicate issues such as failed transactions, payment errors, or order fulfillment problems that can result in dissatisfied customers and potential revenue loss.

Monitoring and improving SR can help businesses identify and address bottlenecks, technical glitches, or operational inefficiencies that may hinder successful transactions. By striving for a high SR, businesses can enhance customer satisfaction, optimize their processes, and ultimately drive growth and profitability.

Let’s understand the various levers which impact the Success Rate.

Factors which affect Payment Success Rate (SR)

Several factors can influence the Payment Success Rate (SR) in various industries. Understanding these factors is crucial for businesses to improve their transactional processes and ensure a high SR. Here are some key factors that can affect SR:
Technical Infrastructure: The reliability and performance of the technical infrastructure, including servers, networks, payment gateways, and software systems, can significantly impact the success of transactions. System downtime, slow response times, or technical errors can lead to failed transactions and lower SR.

1. Payment Processing: The efficiency and accuracy of payment processing systems play a critical role in transaction success. Issues such as declined payments, incorrect transaction information, or payment gateway failures can result in failed transactions and negatively impact SR.
2. Website/App Performance: The performance and usability of a website or online platform can influence transaction success. Slow page loading times, navigational difficulties, or checkout process issues can frustrate customers and lead to abandoned transactions.
3. Security Measures: Strong security measures are essential to protect customer data and ensure secure transactions. However, overly strict security measures or complex authentication processes can create barriers for customers and potentially increase the likelihood of failed transactions.
   4.** User Experience**: A smooth and user-friendly interface, intuitive navigation, and clear instructions can improve the user experience and increase transaction success. On the other hand, a complicated or confusing user interface may lead to user errors or transaction abandonment.
4. Inventory Management: Adequate inventory management is crucial for successful transactions, particularly in e-commerce. Maintaining accurate stock levels, preventing overselling or out-of-stock situations, and providing timely updates on product availability can contribute to a higher SR.
5. Order Fulfilment: Timely and accurate order fulfilment is vital for transaction success. Delays in shipping, incorrect product delivery, or inadequate packaging can result in customer dissatisfaction and potential transaction failures.
6. Customer Support: Effective customer support and responsive communication channels are essential for addressing customer inquiries, concerns, or issues related to transactions. Prompt and satisfactory resolution of customer problems can help improve SR.
7. Fraud Prevention: Implementing robust fraud prevention measures is important to protect against fraudulent transactions. However, overly stringent fraud detection mechanisms may also flag legitimate transactions, leading to false declines and a lower SR.
8. Customer Trust: Establishing and maintaining customer trust is crucial for transaction success. Factors such as a strong reputation, transparent policies, secure payment options, and positive customer reviews can instill confidence in customers and increase the likelihood of successful transactions.

Businesses must continuously monitor and analyze these factors to identify areas of improvement, optimize processes, and enhance the overall tPayment Success Rate.

How to calculate Payment Success Rate (SR)?

Calculating the SR provides merchants with valuable insights into their payment performance, financial analysis, operational efficiency, customer experience, and fraud prevention.

To calculate the Payment Success Rate (SR), follow these steps:

1. Determine the total number of attempted transactions: Identify the total number of transactions that were initiated or attempted during a specific period. This can include online purchases, payment transactions, or any other relevant type of transaction.
2. Determine the number of successful transactions: Count the number of transactions that were completed successfully without any issues or failures during the same period. These are transactions that have achieved the desired outcome, such as successful payment processing or order fulfillment.
3. Calculate the SR percentage: Divide the number of successful transactions by the total number of attempted transactions and multiply the result by 100 to obtain the SR percentage.

Let’s consider an example to illustrate the calculation of SR:
Total attempted transactions: Over the course of a month, a merchant had 500 attempted transactions, including online purchases and payment transactions.
Successful transactions: Out of the 500 attempted transactions, 480 transactions were successfully completed without any issues or failures.
SR calculation: Divide the number of successful transactions (480) by the total attempted transactions (500), and multiply the result by 100: (480 / 500) * 100 = 96%.

In this example, the Payment Success Rate (SR) is calculated as 96%. This means that out of all the attempted transactions, 96% were successfully completed without any issues or failures.
The calculation of SR may vary depending on the specific context and industry. The definition of a successful transaction and the inclusion or exclusion of certain types of transactions can be tailored based on the organisation’s objectives and requirements.

Importance of Payment Success Rate (SR)

Payment Success Rate (SR) holds significant importance for businesses across various industries. Here are some key reasons why SR is important for businesses:

1. Customer Satisfaction: A high SR indicates that a significant proportion of transactions are successfully completed without any issues or failures. This translates to a positive customer experience, as customers can trust that their transactions will be processed smoothly. Customer satisfaction is crucial for businesses as it leads to customer loyalty, repeat purchases, and positive word-of-mouth referrals.
2. Revenue Generation: Successful transactions directly contribute to revenue generation. A high payment success rate means a higher percentage of completed transactions, resulting in increased sales and revenue for the business. Conversely, a low SR indicates potential revenue loss due to failed transactions or dissatisfied customers who may not return for future purchases.
3. Operational Efficiency: Monitoring and improving SR can help businesses identify inefficiencies in their transactional processes. By analyzing failed transactions and addressing underlying issues, businesses can optimize their operations, streamline workflows, and improve overall efficiency. Enhanced operational efficiency leads to cost savings, faster transaction processing, and improved customer service.
4. Reputation and Trust: A high SR builds a positive reputation for a business. When customers consistently experience successful transactions, they develop trust and confidence in the business. This trust contributes to a positive brand image, strengthens the business’s reputation, and differentiates it from competitors. A solid reputation enhances customer loyalty and attracts new customers.
5. Customer Retention and Acquisition: A high SR fosters customer retention by providing a reliable and satisfactory transactional experience. Satisfied customers are more likely to continue doing business with the company, increasing customer lifetime value. Additionally, a positive SR can attract new customers who seek trustworthy and efficient transaction processes, facilitating customer acquisition.
6. Financial Performance: SR is a key performance indicator that reflects the financial health and stability of a business. Investors, shareholders, and stakeholders often consider SR when evaluating the company’s performance. A consistently high SR can attract investors, enhance stock performance, and positively influence the business’s valuation.
7. Payment Provider Relations: Businesses that maintain a high SR can build strong relationships with payment providers. A higher payment success rate record demonstrates the business’s ability to handle transactions efficiently and reduces the risk of fraud or disputes. Payment providers may offer favorable terms, lower transaction fees, or additional support to businesses with a high SR.
8. Insights for Improvement: Monitoring SR provides valuable insights into transaction patterns, potential issues, and customer preferences. By analyzing transaction data, businesses can identify areas for improvement, such as optimizing checkout processes, enhancing security measures, or addressing common customer pain points. Continuous improvement based on SR analysis leads to a better overall customer experience and business performance.

A high Payment Success Rate is crucial for businesses as it directly impacts customer satisfaction, revenue generation, operational efficiency, reputation, customer retention, and financial performance. By prioritizing and improving SR, businesses can foster customer loyalty, drive growth, and establish a competitive advantage in the market.

How to improve your Payment Success Rate (SR)?

Improving Payment Success Rate (SR) requires a combination of strategic measures aimed at enhancing the overall transactional process and customer experience. Here are some effective ways to improve your SR:

Opt for a Seamless Integration

Choosing the integration model for your payment gateway can have a significant impact on Payment Success Rate. The integration method depends on the scale and requirements of your business. Here’s a breakdown of the two common integration models:
Seamless Integration: This model is suitable for large-scale businesses with a dedicated development team. With seamless integration, the payment option is selected on the merchant’s website, and the payment gateway (PG) directly takes the customer to the bank’s 3D Secure page for authentication. This integration offers more control and flexibility as the payment options can be designed to match the merchant’s website. The look and feel can be customised, providing a cohesive user experience. Seamless integrations lead to higher Success Rates as it avoids redirections/hops and provides a native experience which is aligned with the website/app.

Non-Seamless Integration: This model is often preferred by small-scale businesses or startups that do not have a dedicated development team for payment gateway integrations. In non-seamless integration, the payment option is selected at the PG’s end, and then the PG redirects the customer to the bank’s 3D Secure page for authentication. Payment aggregators like PayU, CCAvenue, or BillDesk simplify the integration process, as the merchant only needs to integrate with the aggregator. The payment collection and completion process is handled by the PG, reducing the technical complexity for the merchant.
Providing a native payment experience that seamlessly integrates with your app or website’s interface is crucial for building trust and increasing the success rate of transactions. When the payment process aligns with the overall design and user experience of your platform, it instills confidence in customers and reduces any doubts they may have about completing the payment.

Conversion optimised Checkout Design

The checkout page is a critical component of the customer journey, and it plays a significant role in determining whether a customer completes their purchase or abandons their cart. The checkout design, including the payment options, is crucial for providing a smooth and seamless experience that encourages customers to complete their transactions.
The order in which payment methods are presented also plays a critical role in influencing customer decision-making. For example, if your brand offers high-ticket items and customers frequently use EMI (Equated Monthly Instalments), it is beneficial to display credit/debit cards as the topmost option along with any available EMI offers. This increases the probability of purchase. Some merchants prefer showing all saved payment methods in a single container at the top for easier customer access. We’ve written about checkout experience in-depth here.

Outages

This is to warn the customer of the poor success rate for payment instruments.
This guides the customer to select an alternative payment method with a better success rate based on real-time detection of poor performing payment options and disabling/alerting the user about the same on the payments page
The crux is to define the thresholds for each payment method and run continuous analytics for the transaction success rate. The algorithm should run at a shorter frequency (every or rolling 15 mins) to understand any dip in the success rate to highlight the anomaly on the payment page
Customers do not select the low success rate payment instruments on the checkout page leading to the selection of alternative payment instruments with better success rates.

Payment Routing/Orchestration

Payment Processes are nothing short of intricate mazes with multiple legs involved. At any given time, there’s a possibility of a Payment getting lost. Payment Orchestrators essentially act as a guide, using automated transaction routing to detect the best routes to direct payments through. Consider it the shepherd of Payments. Payment Orchestration Platforms (POPs) shepherd payments to the best payment service providers that reduce failures and boost conversion. We’ve written about Payment Routing and how it can help your business grow here.
Payment orchestration platforms offer benefits to companies of all sizes, from SMBs to sprawling multinational enterprises, seeking to keep pace in today’s fast-paced business climate. The average transaction success rates in India tend to hover around around 65-70%. While there are a host of reasons due to which Payments fail, upwards of 10% of such failures can be mitigated with a Payment Orchestration Platform.
By streamlining the payment process, enhancing the customer experience, and driving up conversion rates, Payment Orchestration platforms have become essential for businesses looking to stay competitive and maximize their revenue.

Breadth of Payment Instruments

Customers have diverse Payment preferences. From UPI for cab rides to BNPL for groceries, it is important for online merchants to carry a plethora of Payment Instruments so that customers can pay via their preferred Payment instrument with ease.
Understanding your product and customer behaviour through analytics and feedback systems is crucial. Stay on top of emerging payment trends like UPI and offer various payment options, including credit card payments such as 0% EMI, cashbacks, and BNPL services like Lazypay and Simpl.

Configure Alerts

Merchants must keep their tech and analytics teams updated on their desired method of calculating success rates and the threshold at which they want to receive alert notifications.
Here are a few examples of alerts that you can easily implement in your system:

1. Alert when the success rate of a payment gateway (PG) falls below your threshold for a specific payment type over the last 100 transactions.
2. Alert when the success rate of a PG drops below your threshold for a specific payment type in the last overlapping 5 minutes.
3. Alert when the PG or PG aggregator API indicates that a particular bank is experiencing poor performance.
4. Alert when there is a significant decrease in the delta between the week-on-week graph of payment transactions, surpassing a predefined threshold.
5. Alert when the number of pending response statuses in failed transactions increases, indicating that payment confirmation from the PG is pending.
6. By setting up these alerts, you can proactively monitor the performance of your payment systems and take timely actions to address any issues or potential failures.

Allow customers to save their Card

Offering the option for customers to save their card details for future payments provides convenience and streamlines the checkout process. Instead of entering card details for each transaction, customers can simply select their saved card, enter the CVV number for authentication, and proceed with the payment. You can further integrate a CVV less flow to reduce a step in the process. This reduces the hassle and time required to complete a transaction, enhancing the overall customer experience.
By securely storing the card details in a tokenised format, you can ensure that customers’ information is protected and encrypted. This allows for a seamless and efficient payment experience, encouraging repeat purchases and customer loyalty.
This reduces the chances of typo-errors, reduces time to complete transactions and improves the customer experience. Saved cards see upto 10% better Success rates.

Linked Wallets

Enabling the option for customers to link their payment wallets, such as PayTM, PhonePe, and other to the merchant website or app can offer a convenient and seamless payment experience. When a customer links their wallet, it allows them to view their current wallet balance directly on the payments page during the checkout process.
By having this information readily available, customers can easily authorize transactions using their linked payment wallets with just a few clicks, without the need to enter wallet credentials or undergo additional verification steps. This streamlines the payment process and reduces friction, enhancing the overall customer experience.
Without the functionality of linking wallets, customers would need to manually link their wallets for each transaction if they wish to use their payment wallet as a payment method. This can be time-consuming and may require entering wallet credentials or undergoing additional authentication, which can create unnecessary steps and potential barriers for completing the transaction.
By offering the option to link payment wallets and displaying the wallet balance on the payments page, merchants can provide a convenient and efficient payment method for customers who prefer using their payment wallets for transactions. This feature not only saves time for customers but also encourages the use of wallets, which can be a popular and preferred payment method among users.

UPI Intent

When it comes to UPI (Unified Payments Interface) transactions, there are two types of flows: Collect and Intent transactions.
In a UPI collect flow, the merchant sends a transaction request to the customer’s VPA (Virtual Payment Address) linked mobile number and UPI app. The customer is then required to leave the current page and click on the link shared in an SMS or tap on the app notification. This interruption breaks the payments journey, as the customer is redirected to the UPI app for authorization. After authorizing the transaction, the screen remains in the UPI app, and the customer has to use the operating system’s screen switch feature to return to the merchant’s app, once again disrupting the payments flow.
On the other hand, in a UPI intent call, the merchant initiates a request that triggers an app switch tray displaying all the installed UPI apps on the customer’s mobile device. The customer can then select their preferred UPI app from the tray to complete the transaction. After the transaction is successfully completed within the chosen UPI app, the customer is seamlessly redirected back to the merchant’s app, specifically to the transaction summary page. This flow ensures a smoother and more integrated payments experience for the customer, as there is no need for multiple app switches or interruptions.
The UPI intent flow is indeed designed to provide a better user experience and higher success rates compared to the UPI collect flow. The intent flow eliminates the need for multiple app switches and interruptions, allowing customers to complete transactions seamlessly within the merchant’s app.

Native-OTP

In order to enhance the success rate and improve customer experience during the 3D Secure authentication process, the Direct OTP or Native OTP solution offers a more seamless and streamlined approach. Instead of redirecting the customer to the bank-controlled page for OTP entry, this solution provides a native app screen where customers can directly enter the OTP without leaving the merchant’s app or website.
By eliminating the page redirection, the Direct OTP solution reduces the potential points of failure associated with poor network connectivity or handshake loss. This results in a smoother and more reliable authentication process, ultimately leading to higher success rates and a better customer experience.
The technical enablement of Direct OTP is the responsibility of the payment gateway (PG). The PG needs to establish the necessary integrations and communication channels with the banks to facilitate the validation of OTPs entered by customers within the native app screen. This integration ensures that the OTP authentication process can be completed seamlessly within the merchant’s platform, without the need for redirection to external bank pages.
By leveraging the Direct OTP solution, merchants can improve the success rates of credit and debit card transactions, reduce potential friction points, and provide a more seamless and convenient experience for their customers.
Read more about Juspay’s Native OTP here.

Quick pay

One effective strategy to personalize the payment process and provide a faster checkout experience is to display the last used payment method prominently on the payments page. This approach takes into account the customer’s previous transaction and showcases the preferred payment method, making it convenient for them to proceed with the checkout.
For instance, if a customer has previously used a Visa card and saved it for future payments, the payments page would prioritize the saved Visa card option by placing it at the top of the available payment methods. This allows the customer to quickly select the familiar and preferred payment method, streamlining the checkout process.
By personalizing the payment options based on the customer’s history, merchants can enhance the user experience and facilitate faster checkouts for repeat customers. This approach reduces the time and effort required for customers to locate and select their preferred payment method, contributing to a smoother and more efficient payment process.

1-click Payments

1-click Payment methods lead to better success rates and enhanced customer experience. By reducing the number of steps in the transaction process, the chances of the user successfully completing the transaction are higher compared to status quo. 1-click Payments are supported on UPI via Juspay’s HyperUPI. Read more about it here.
Implementing 1-click payments on cards by combining the CVV-less flow with Native OTP can further streamline the checkout process and enhance the user experience. This configuration eliminates the need for the customer to enter the CVV (Card Verification Value) for the selected saved card, and with the auto-reading and auto-submitting of the OTP, the transaction can be completed seamlessly.
With the CVV-less flow, the saved card is selected as the payment instrument, and since the CVV is not required, the customer can proceed directly to the next step without having to input additional details. Additionally, the Native OTP solution simplifies the OTP validation process by providing a native app screen for entering the OTP, making it even more convenient for the user.
By combining these features, the transaction process becomes extremely streamlined and requires minimal effort from the customer. This frictionless experience not only saves time but also reduces the chances of errors or distractions that could lead to transaction abandonment.
Implementing 1-click payments with CVV-less flow and Native OTP can significantly improve the checkout experience, increase customer satisfaction, and potentially boost conversion rates by providing a seamless and convenient payment option. Read about the CVV less flow here.
Businesses can enhance their Payment Success Rate by optimizing payment routing, reducing transaction failures, preventing fraud, improving the user experience, and gaining valuable insights into transaction performance. These enhancements ultimately lead to higher customer satisfaction, increased revenue, and improved overall business performance.

Elevate your Success Rates with Juspay

Payment Success Rate (SR) is crucial for businesses as it directly impacts customer satisfaction, revenue generation, operational efficiency, reputation, customer retention, and financial performance. A high SR signifies a smooth and reliable transactional process, instilling trust in customers and enhancing the overall user experience.
To improve SR, businesses should focus on optimizing their transactional processes. This includes streamlining the checkout process, offering a variety of secure payment options, strengthening security measures, and enhancing website performance. Efficient inventory management, prompt order fulfillment, and responsive customer support are also essential.
Regular testing, monitoring analytics, and seeking customer feedback provide valuable insights for continuous process improvement. Leveraging tools such as Juspay’s Smart Routing, Retry Mechanism, and fraud prevention solutions can further enhance Payment Success Rate. Emphasizing a culture of continuous improvement and embracing customer-centricity are key to driving higher SR.

By prioritizing and improving SR, businesses can foster customer loyalty, drive growth, and establish a competitive advantage in the market, ultimately leading to improved customer satisfaction, increased revenue, and enhanced business performance.

FAQs About Improving Payment Success Rates

1. Does the Payment Success Rate get affected as per the payment gateway?
Yes, the Payment Success Rate (SR) can be affected by the choice of payment gateway. Different payment gateways may have varying levels of reliability, efficiency, and compatibility with different payment methods. It’s important for businesses to choose a reputable and reliable payment gateway that aligns with their specific requirements

2. How often should businesses monitor their Payment Success Rate?
Businesses should monitor their Payment Success Rate (SR) on a regular basis to ensure ongoing performance and identify any potential issues. The frequency of monitoring can vary depending on factors such as the volume of transactions, business goals, and industry standards.

3. What is considered a good Payment Success Rate?
A good Payment Success Rate (SR) can vary depending on the industry, business model, and specific circumstances. However, in general, a high SR is desirable for businesses as it indicates a reliable and efficient transactional process. While there is no universally defined threshold for a “good” SR, a benchmark of 95% or higher is often considered favorable.