According to the Accuity 2018 Payments Industry Report, released today, payments providers are more focused on streamlining and automating the validation of bank and payment information in order to reduce payment failures and create a more trusted and transparent experience.
- Approximately 87 percent of banks and payment providers validate key payments information on behalf of customers prior to remittance
- Almost 50 percent are adopting technology to automate payments validation at the point of on-boarding
- 90 percent cite a payments failure rate under 5%, yet costs of failed payments has increased with more than a third reporting an average fee of more than $30 USD per transaction failure
Findings from the survey of over 100 financial institutions and payment providers revealed that against a backdrop of growing and increasingly complex cross-border payment volumes, the majority say they provide customers with the validation of key payments data elements prior to remittance, and many have invested significantly to automate this process. Moreover, over one third of respondents claimed that their customers expected their payments provider to complete such validations on their behalf, and bear the costs of payments failure.
Sarkis Akmakjian, senior director at Accuity, said: “In the digital, real-time economy, customers now insist that payment providers send payments at a lower cost, into more markets, and with greater certainty. The findings demonstrate that the industry is responding to this challenge by embracing technology that facilitates pre-validation services and seamless payment processing.”
The report also disclosed that over half (52 percent) of payment providers experience payment failure rates of less than one percent, and almost all respondents (90 percent) cite a payments failure rate under five percent. This is attributable to the way in which payment processors have embraced new technologies to differentiate themselves from other players in this increasingly competitive market. The trend indicates firms have pivoted to focus more on customer satisfaction and are now delivering the fast, accurate and reliable payments demanded by their clients.
However, despite the low payment failure rates, payment providers reported a rise in the overall cost of failed payments, with more than a third of firms reporting an average fee of more than $30 USD, while over 20 percent reported an average $40-50 USD failure charge. It is likely that these figures are a result of banks’ increased diligence in assessing and passing on fees, driven by tighter margins. The broader geographical disbursement of payment systems could also be contributing to payment failures in jurisdictions where payment systems are not as familiar.
Driven by competitive pressures of the current market, 93 percent of firms cited maintaining their reputation and relationships with customers as a top priority in 2018. Similarly, 87 percent of respondents stated that minimising the risk and exposure of failed payments was a key priority, as this would enable them to build greater trust with customers.
Sarkis Akmakjian said, “The adoption of new technology has the ability to reduce friction, and ultimately cost, in the payment process, but more importantly it is enabling payment providers to become more customer centric. The significant shift towards automation is key to meeting the dual-fold challenge of keeping up with the pace of regulation, while simultaneously winning customer satisfaction.”
For more information, please contact:
Imogen Nash, Accuity
Tel: +44 (0)7789 924 920
Francesca Bliss, Cognito
Tel: +44 (0)20 7426 9419
Notes to editors
About the Report
The Accuity 2018 Payments Industry Report questioned over 100 senior managers from global financial institutions and payments service providers in order to understand the issues affecting speed, accuracy and customer experience in payment processing. Each region of the world was represented, with 45 percent of respondents coming from Europe, 25 percent from North America, 16 percent from Africa and 6 percent from Asia. There was an even split between those who work at larger (assets of $100bn+) and medium/smaller organisations. In total, 24 percent came from businesses that serve their domestic market only, while 21 percent operate in 50+ markets.
Accuity offers a suite of innovative solutions for payments and compliance professionals, from comprehensive data and software that manage risk and compliance, to flexible tools that optimise payments pathways. With deep expertise and industry-leading data-enabled solutions from the Fircosoft, Bankers Almanac and NRS brands, our portfolio delivers protection for individual and organisational reputations.
Part of RELX Group, a world-leading provider of information and analytics for professional and business customers across industries, Accuity has been delivering solutions to banks and businesses worldwide for 180 years.