How harnessing data has spearheaded the payment industry’s growth

There aren’t many sectors that haven’t benefited from the use of data. In fact, the ability to collect, assess and utilise data has allowed many sectors to flourish over the past decade. The fintech industry - and payments specifically - is a shining example of this.

It’s hard to comprehend the scale and pace of the innovation that has taken place across the payments sector in recent years - and that growth is showing no signs of abating either. According to figures from Statista, cross-border transactions reached $150.7 trillion in 2022, up from $124 trillion in just 2018 alone. 

The development of cross-border payments is driven by several factors - most notably, and unsurprisingly, technological innovation, which has facilitated quicker and more efficient transactions. At the forefront of this innovation is a new wave of payment institutions, innovating and investing in ways to harness data to accelerate and simplify transactions for their merchant customer base. 

Like most, data has been an integral part of the expansion of fintech businesses, which has underpinned its entire growth strategy to date and will continue to do so in the future. So, how can it be used by payment institutions and merchants moving forward?

Adaptability is essential in any business, but is of greater importance for merchants focused on scaling-up. Having access to real-time data and analytics allows payments businesses and their merchants to react promptly whenever necessary. This is especially pragmatic when it comes to fraud detection.

The digital payment model and the large volumes of cross-border payments being made hourly means there are multiple channels and parties involved in a single transaction, increasing the risk of fraud. So much so that it is reported that financial fraud can cost the e-commerce sector as much as £17.5 billion annually.

With accessible real-time analytics, payment service providers can serve their merchants more effectively by keeping track of their customers’ behaviour, examining any suspicious activities simultaneously and combating any fraud before it happens and any financial loss is incurred.

This real-time data has a direct impact on a merchant’s business strategy too. Thanks to payments businesses' ability to cast live insight into customer behaviour and sales trends, retailers and merchants can make short-term adjustments via daily spending trends, as well as drawing long-term sales plans.

This insight is crucial when forecasting too. The historical data that has been amassed allows payment service providers and merchants to better predict peaks and troughs in customer demand, allowing them to capitalise on market possibilities.

Despite the volume of data that payments providers and merchants collect, it can also be a headache to understand if utilised improperly or presented in a way that cannot be fully grasped. As such, a real-time dashboard (e.g the Nucleus365 dashboard) with an intuitive design can be instrumental, with which merchants can easily inspect payment volumes, transaction activity, account information, and more with just a few clicks. 

Here at Nucleus365, the use of data is core to our strategy and our offering to customers. As an FCA Authorised Payment Institution, we are committed to backing the growth of our merchants by granting them unrivalled access to the data and insight we collect on their behalf, to ultimately inform better decision-making. 

The successful use of data is the backbone of any successful business, and the payment organisations that provide enhanced data collection services to their merchant customer base will be the ones who thrive in this competitive markets.

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