How merchants underestimate the payments process and leave huge opportunities up for grabs

3 January 2020 – By Chantal de Meere

Some time ago I asked a CFO of a large online travel agent about the percentage of outages they have with manual transfers. He answered without a glance or blush: “We have a dropout rate of only 10% in our reconciliation.”

Although this concerned manual bank transfers of an online travel agency, an outage of more than 1% in the reconciliation process is certainly no exception. However, by fully digitising the payments process and optimising available functionalities of your payment partners, a dropout of less than 0.5% can easily be achieved.
Many companies see their payments processes and platforms as a domain of “techies”. Due to a lack of knowledge, they assume their PSP will take care of the difficult issues. But because of this, huge opportunities are missed to save costs and increase conversion.

Everything that takes place online is becoming simpler for the end-user, while behind the scenes everything is becoming more complex. This is also true for online payments and PSPs. In addition to iDEAL, credit card and PayPal, dozens of domestic and international payment options are offered. Behind these are several schemes, processors and clearing houses, each with their own reconciliation rules, timelines and conditions. PSPs such as Adyen, Stripe,, Worldpay, Ingenico and many others offer plug & play solutions to get rid of all that complexity at once. In addition, they offer more and more platform capabilities to increase conversion and improve efficiency, such as client-side encryption, split pay-out solutions (marketplace pay-out), Business Intelligence tools, intelligent routing, account updaters, retry logic, customer profiling, advanced fraud management and so on. Working with a PSP makes sense, but is not a magic bullet.

Here is why:

The first mistake many companies make during PSP selection is underestimating the complexity. Often, emphasis is put on price, rather than a well-founded assessment of the business, operational and technical requirements the company needs versus what the PSP has to offer. Furthermore, the payments platform’s capabilities are often presented as the ultimate solution for the merchant’s challenges. It is therefore assumed that the PSP will take care of everything after the integration phase.

This leads to the second challenge: the optimal deployment of the PSP’s functionalities remains the responsibility of the merchant. In other words: every merchant working with a PSP should organise itself accordingly.

It is my experience that overall knowledge and ownership of the payments process is crucial for continuous optimisation of conversion, cost reduction and automation.

During the PSP selection and later in the implementation phase, disciplines such as Finance, IT, Marketing and e-Commerce are involved in the project. To get the platform live as quickly as possible, the “must-haves” list is kept as limited as possible. After the launch and the elimination of aftercare issues, everyone retreats and is relieved that the project is over. The consequence is a lack of ownership and subsequently internal knowledge gets fragmented with the following issues as a result:

   1. Little insight in how to steer towards cost reduction (processing costs, transaction costs, interchange fees, cross border, fx and costs related to internal processes);

   2.  Limited understanding of how to increase payments conversion based on rejected or unsuccessful transactions considering that little to no use is made of available PSP functionalities and Business Intelligence tools;

   3.  An unhealthy dependency on the PSP or other third parties.

It is therefore imperative that someone within the organisation takes ownership of the payment partner(s) and associated processes. Someone who has overall knowledge of the payments process and is the link between Finance, IT, e-commerce and Business Intelligence. Someone who understands how a payment is processed from A to Z and how processes can be streamlined, costs can be reduced at transaction and process level and conversion is increased based on specific data and functionalities that the PSP has to offer.

Sounds easy, doesn’t it? Unfortunately, there is no skeleton key that fits all locks. It takes thorough analysis and hard work to engineer the optimal solution and take advantage of all the benefits of working with a specialised PSP.

At Connective Payments, we have broad experience in dealing with these challenges. We can help by analysing your payments process and design it in such a way that you reduce costs while increasing conversion rates; we can train your staff in payments knowledge and ownership or support you in the selection and/or implementation of one or multiple PSP’s. Finally, we help to turn your vendors into true business partners.

About Chantal de Meere:
In her 14 years of experience in the e-commerce and payments industry, Chantal de Meere gained a true passion and expertise of the technical and commercial requirements of the payments process for both Merchants and Payments Service Providers.
She provides a holistic approach in her analysis and advice to optimise and automate payment infrastructures, increase conversion and reduce costs.
Chantal manages digital transformations of Online, Subscription and Omni-Channel businesses to implement changes in their payment environment including analysis, requirements definition, architectural design, vendor selections and implementation.
Using her knowledge of Online, Subscription and Omni-Channel businesses, she provides services to PSP’s and banks to optimise and innovate their products and service offerings towards their specific merchant target groups.

Contact Chantal at

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