Harnessing Payment Data to Increase Profitability

Data quality and accuracy are the foundation of effective business decisions and long-term success. Fuel marketers can leverage payment data to unlock valuable insights and enhance operational efficiency. 

Have you ever wondered which specific customers or deliveries cost your company the most in transaction fees? Which divisions incur the highest payment acceptance costs, or how your payment mix compares? That information is already available, but only if your payment processor has the advanced technology to provide the reporting insights you need.

Payments Auditing

It starts with a payments audit, according to Jon Gilbert, Director of Business Development at Qualpay. “A well-conducted audit clarifies where the company’s payment expenses lie and offers actionable insights and best practices to streamline operations and boost profitability,” he explains.

A payments audit provides a detailed analysis of all expenses incurred when accepting ACH and credit card payments. For fuel marketers, this comprehensive review should clearly outline the four primary components of credit card processing costs: dues and assessments, third party payment gateway fees (if applicable), processor markup, and interchange fees.

Beyond simply itemizing expenses, a thorough payments audit examines the marketer’s current payment collection, storage, and automation practices. By evaluating the company’s procedures, the audit can identify opportunities for improvement and recommend best practices to enhance security, efficiency, and cost savings.

The company can determine its true cost per delivery with the compiled data. Most companies calculate a cost per delivery from standard expenses such as overhead, transportation, and labor costs, but rarely consider the payment transaction fees attached to each delivery. Gilbert explains that the cost for accepting a credit card can vary significantly, as much as a $7-to-$15 deviation for a single $1,000 transaction. Reducing those fees can make a big difference in a company’s bottom line.

Payment Method Optimization

Gilbert calls the process to reduce those costs, “Payment Method Optimization.” Qualpay helps the company review their customers’ payment preferences by business type and user age group. Growth opportunities come in finding more convenient ways to bill customers and make it easier for them to process their payment without taking out their wallets. Companies struggling with late payments and arrears should ensure they are providing their customers with enough options, including email notifications, text-to-pay, and self-serve portals so payments can be made at the customer’s convenience, rather than during work hours.

Another important analysis included in Qualpay’s payments audit is a look at payment trends. Qualpay’s monthly decline report helps determine how many payments are being declined and why. In many cases, the issue is simply expired credit cards that have not been updated. There are two easily implemented solutions: utilizing account updater software that will connect the payment processor to the bank to automatically update the card information; and Qualpay’s Card ID report which can identify expired cards or those nearing their expiration date, so the company can help customers keep their accounts current.

As important as it is to get paid as quickly and efficiently as possible, it is just as important, if not more so, to ensure that your processor is passing the correct data to the bank to receive the lowest interchange rate on commercial cards. “I know we can save about 30 percent on every transaction,” Gilbert asserts. “Most companies are using older processors that pass Level 2 compliance data. Our system collects and distributes the additional data to reach Level 3 and 4 compliance, which earns the company the lowest available rate, substantially reducing the cost per transaction.”

Cost Allocation Reporting

If your company has multiple lines of business or locations, Qualpay’s cost allocation reporting can provide more granular insight to fees and customer behaviors. These monthly reports break down transaction fees by location or business division, compare and contrast those costs, and identify any trending changes over time.

With this, businesses can ascertain which divisions have the highest transaction fees and their causes. One location, for example, may have a higher percentage of high-fee credit card transactions, and might consider offering incentives to reward customers who convert to lower-cost ACH payments.

“These are just a few of the insights available through a payments audit. It makes sense to get an understanding of how your payments set-up and rates compare with other providers. Our auditors review your statements, help you understand the fees you are paying, and give you actionable steps to reduce your costs,” Gilbert concludes.

Jon Gilbert is Director of Business Development at Qualpay. For more information or to schedule a payments audit, contact Jon at (207) 321-1150 or email jon@qualpay.com.

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