How to get leadership buy-in for your payment transformation initiative

“Payments aren’t a priority right now.”

I’m sure you’ve heard that before when pitching a payments project. And, like you, we fundamentally disagree. Optimized and efficient payments are non-negotiable and a priority for any business with growth ambitions.

If you take a step back, it’s pretty staggering that despite the plethora of evidence from case studies highlighting the pivotal role of payments in the success of giants like Uber, Amazon, and Airbnb, many executives still haven't caught on to the importance of payments to their organization’s success.

But on the other hand, we totally get it. Amidst a sea of pressing priorities, payment transformation doesn’t often stand out as a project that’ll move the needle enough. And after all, if it 'works,' why bother fixing it?

Does this narrative sound familiar? Do you feel like you’re banging your head against a brick wall when advocating for change in how your company does payments? 

Don’t throw in the towel just yet. Keep pushing for change, and hammer home these six compelling reasons why it pays to invest in payments.

#1 Generate more revenue

Have you ever spoken to someone in the business about authorization rates and seen their eyes glaze over? You’re not alone. Most people across the business don’t care about authorization rates. 

And why should they?

However, they do care about revenue. And, as we all know, authorization rates directly correlate to revenue.

That's the story you must tell when talking to the leadership team about payments.

Show hard figures demonstrating how even a slight uptick in authorization rates can translate into massive revenue boosts. And remember to highlight how the complexity of your legacy payment is keeping your company from realizing these gains.

It might seem straightforward, but sometimes, the most obvious points are the ones that slip through the cracks. We've witnessed countless presentations that dive deep into payment intricacies without ever tying it back to what truly matters to the business: revenue.

#2 Slash costs

Over the past decade, most merchants have experienced significant increases in the direct and indirect costs of accepting payments. 

If we take direct costs first, research from the British Retail Consortium found that retailers spent £1.26 billion in the UK on card processing fees in 2022. That's an average of 8.43 pence per card payment—a figure that's been climbing steadily in recent years.

Many of these retailers are likely paying over the odds. And it's not just retailers, we see companies from all industries wrestling with sky high payment costs. Typically there are a few reasons why. It could be that they use a single processor and therefore have little negotiating power to reduce costs when contracts come for renewal. Or if they’re using multiple processors they may have limited ability or resources to build least-cost routing logic in the back end meaning they fail to meet agreed volume thresholds that can lead to reduce processing costs.

When you also factor in the indirect costs associated with payments—such as the drain on time, money, and resources that come with the considerable engineering resources required to develop and maintain integrations with a convoluted network of payment services—the case for modernizing the payment stack becomes even more compelling. 

#3 Increase customer satisfaction and loyalty

Acquiring new customers is more expensive than ever. In fact, over the past eight years, the average customer acquisition cost (CAC) has increased by 222%. That means two things:

1. Businesses must ensure they’re converting the customers they bring to the checkout.
2. They must also ensure that they’re offering incentives and creating an experience that makes them want to return again and again. 

Payments play an instrumental role in allowing any business to achieve these objectives. 

That could be by enhancing customer conversion at the checkout by offering the most relevant payment options. Or it could be optimizing merchant-initiated transactions to help mitigate churn in subscription payments. Or maybe it's minimizing false declines to ensure revenue isn't left on the table due to avoidable payment failure.

These are particularly persuasive arguments for those on the executive team focused on marketing or the customer experience. And you can back your arguments up with these stats: 

1. 59% of consumers abandoned their carts when their favorite payment method was unavailable. PayPal.
2. 45% of consumers will not retry a false decline payment and will abandon the purchase. Checkout.com.‍
3. 40% of subscription businesses say payments are a top concern, given that 35% of merchant-initiated transactions fail. Chargebee.

#4 Drive operational excellence 

Legacy payment stacks breed inefficiency, a point underscored earlier when discussing the engineering team. But they’re not the only team impacted. Inefficient payments negatively affect every team in an organization—whether they realize it or not.

Consider the support team. They want to solve customer issues quickly and in real-time, but often, they’re not getting the data fast enough from the payment stack to inform them when a customer fails to check out, let alone what went wrong.

And this operational inefficiency comes at a cost.

Take a VIP customer who spends £250,000 annually with a luxury watch retailer. One day, they’re back shopping for a new watch, and their payment keeps declining. Ultimately, they grow frustrated and find an alternative watch on a competitor's site. That VIP customer never returns to the first watch retailer, seeing them lose £250,000 in annual revenue instantly.

It’s an extreme case, but similar situations play out daily on every digital storefront. 

However, issues like these can be avoided when the payment stack is tightly integrated using an underlying payment infrastructure. This will ensure that data flows from one service to another with issues and allow you to build triggers into your payment flows that alert the customer support teams in real time when events like the above occur. 

While this argument may not be as immediately convincing as the first three, it demonstrates how investing in a modern payment infrastructure can unlock margin gains across the organization.

#5 Uncover actionable insights 

Every business leader is looking for data that will give them a competitive advantage, and payment data might be just what they’re looking for. Payment data is a goldmine that can provide actionable insights into:

• Customer preferences and how to maximize online conversion rates amongst different demographics.
• What products and services market to customers (and where). 
• Where there is a greater risk of fraud and the strategies that are working to mitigate risk.

And that’s just the tip of the iceberg. 

The problem is that many businesses aren’t getting any of these insights. That may be because they’re using multiple processors, which map and share their data in different formats, requiring a full-time data science team to make any sense of it. Or perhaps that data is just falling into a black box.

Unifying your payment stack using an underlying infrastructure is one of the most efficient ways to change this dynamic and start unlocking these insights. 

If this sounds like something that would go down well in your business, take a look at this blog from Adrien Lillo de Botmiliau. He provides examples you can share with your executive team on why payment data is your business's hidden treasure.

#6 Accelerate business growth

There’s some ambiguity to the term accelerate business growth; it means different things to different businesses. Ultimately, the core message is the same: a legacy payment stack will keep a business from achieving its goals—or at least make it much harder.

So, when making a case for investing in payments, you should discuss the company’s short—to medium-term plans and outline how your current payment setup might prevent those from becoming a reality. 

And share a few case studies showing how other businesses have entered new markets or created entirely new business models because they made a strategic investment in their payments.

Learn how Dabble, the Australian social betting app, rapidly expanded into the US with its agile payment infrastructure.

Make 2024 the year of payment transformation

Getting internal buy-in for a significant transformation project in an area as complex and crucial as payments is challenging, especially in today’s economic climate. But with constant education, proper positioning, and hard data points, you can become the catalyst for change.

In fact, as of last year, we started to see an awakening amongst more business leaders about the importance of payments to their present and future success. 

And, as the champion for payment transformation within your organization, you have a unique opportunity to drive real change and help payments (and you) take a seat at the top table.