How payment data drives business success

They say data is the oil of the digital age. And it’s easy to see why.

If used correctly, data holds untold savings potential and is a valuable resource for all kinds of businesses. But many businesses are not harnessing their data – especially when it comes to payments.

Understanding the need for payment data

There’s a surprising amount of data that can be gathered from payment data: Beyond knowing where the money is going and how much is being spent for each category, businesses can greatly improve how efficiently they operate when it comes to, say, travel payments or procurement.

In the end, data provides the insight and overview – in a word, transparency – needed to optimize payments. And it’s clear that this transparency is growing in demand.

In our 2024 survey of 534 purchasing managers in Europe, almost a third (31%) listed transparency among their top three most important characteristics for their payment solution, alongside security and reliability. ^[1]

With this in mind, it’s worth knowing why data is so valuable when it comes to managing costs accrued by businesses.

What counts as payment data?

Payment data refers to any kind of information associated with a payment transaction, including basic information like transaction amount and payment method, as well as more detailed data like invoice/reference numbers and payment identifier codes.

Not all this data is created equal, with some information having more use than others.

Examples of payment data

When thinking of payment data, a few things come to mind:

• Transaction amount
• Payment method
• Cardholder information
• Billing address
• Currency
• Invoice/reference number

This is all great to know. But over time, you can use this information to identify patterns and trends:

Transaction volume and frequency – leads to better management of expenses

Average transaction value – provides insight into the scale of payments

Invoice processing time – helps identify bottlenecks or delays

Seasonal variations – good for anticipating changes in cash flow

Early payment opportunities – highlights opportunities to take advantage of early payment discounts or incentives

Payment processing costs – assesses the costs associated with different payment methods & processing channels

Environmental impact – necessary for compliance & reporting obligations

As you can see, while little information can be extrapolated from an individual payment, when you start to consider the volume of payments made by businesses every week, month, or year, it’s possible to start seeing trends and patterns. It is at this scale that the most useful insights can be made – like trend analysis and forecasting.

The good news here is that the amount of payment data is only set to increase. For example, the onset of autonomous and invisible payments via IOT devices is expected to significantly boost the amount of payments and data being gathered. ^[2]

The issue is, however, that there are numerous payments being made of different amounts to different providers. This makes it easy to lose track of the bigger picture.

How do you collect payment data?

While it’s possible to note down all the payment data yourself, this is far from convenient. Instead, most modern payment software does this for you to varying degrees.

But what really makes payment data collection possible at scale and with high detail is integration.

The role of platforms in data collection

For example, integrating your accounting software with your payment processing systems allows for automatic capture of transaction details.

The same sort of synergy is possible by implementing customer relationship management (CRM) systems that can help track payment histories and interactions with your customers, providing valuable insights for financial analysis and decision-making.

And with the onset of embedded payments, this is becoming even easier.

By integrating payments into your platform or service, you’re able to not only maintain visibility over the process, but also keep the data in-house.

That’s not to mention the growth of AI, SaaS, and other digital technologies – these digital platforms are ideal for tracking and analyzing your payment data.

In the end, it all comes down to the reporting. What use is data if it is not comprehensible or actionable?

Being able to breakdown costs into the different channels and categories makes this information more relevant for a business. This is how it can then be leveraged to manage costs. Having this transparency is a gift that keeps on giving.

Now, in terms of actual applications, there are a few ways in which this data can be utilized to increase efficiency.

5 ways you can use payment data to increase efficiency

Data is only valuable if you use it. It needs to be gathered, analyzed, contextualized, and then utilized to achieve any sort of goal. There are a few different ways that payment data can be leveraged to increase the efficiency of businesses:

1. Identifying inefficiencies through transparency

Acting on inefficiencies helps keep businesses lean. Cutting unnecessary costs and bloat from the budget is crucial to surviving in an increasingly dynamic global market. To achieve this, however, it helps to have the details laid out in front of you to truly grasp the situation.

Having a more holistic overview will allow you to identify areas of improvement across the company. Once you have the bigger picture, you can then start to home in on discrepancies.

For example, you could look closely at your business’ travel policy, and start weeding out expenses that are non-compliant to keep the travel budget in check.

There are many small optimizations like this that can be made over time, which will add up to significant savings. That is the main takeaway here – you are not likely to find any one significant inefficiency in the business. Instead, it is a few things here and a few more there.

2. In negotiations

Perhaps the biggest cost-saving measure this data can bring about is the ability to negotiate terms. Having data at hand when beginning with proceedings will give businesses an upper hand when in talks with hotels, rental services and more.

Knowing how often you have used their services and how much you have paid will give you leverage on negotiating a deal together and building a relationship between your brands. While the other business gains a loyal customer, you will be able to save on costs.

It comes down to showing the value your business provides to them, and then outlining how further cooperation would be beneficial to both sides. As you can imagine, this is much easier to argue when you have concrete evidence at hand.

3. Data-driven decision making

Making changes in a business is hard at the best of times, but hurdles like the pandemic make it that much more difficult. In the end though, there will never be a perfect time to make changes.

So, with that in mind, the best time to make decisions is when you have quality data to base them on.

Whether it comes down to better allocation of spending, clearer invoices, or overall better understanding of expenses, taking the time for an in-depth look at the available transaction data can greatly benefit a business.

4. Meeting sustainability targets

Every business should have some sort of plan when it comes to their approach to sustainability. With the likes of ESG finance and data, it is becoming easier than ever to get a true picture over who is and isn't being proactive.

Consider using data to not only meet expectations, but surpass them. Carbon offsetting is one way to go about this, or otherwise consider your approach to business travel. Even just a switch like taking the train on your next business trip could make all the difference. You just need to look at the data.

5. Complying with regulations

Speaking of sustainability, regulations are also gaining attention. One key example of this is the Corporate Sustainability Reporting Directive (CSRD), a legal framework in the EU that requires large and listed companies to report on a wide range of factors relating to sustainability and societal impact.

Using certain payment tools can streamline this reporting and associated processes. For example, it’s possible to pay for flights and automatically receive a detailed emissions balance sheet that tracks the emissions for each journey.

Other ways to integrate data into your business

Not every business will benefit directly in these ways from the use of data. However, there are still other ways in which data can be used in your business – maybe not for efficiency, but for a better understanding of your travelers.

Travel managers, for example, can use information they collect to understand travelers at their business. They can investigate areas of improvement or even just better allocate resources as needed. Just knowing this information is important for bookkeeping and reporting, after all.

Don’t overlook your payment data

In the end, whether you make use of it or not, you will be keeping track of expenses in your business. Does it not make sense to utilize this to add extra value? Even just having an overview can make a difference.

However, it is then up to you to decide how these changes are implemented in your business. Only once you act on these insights can you start to truly reap the rewards.

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Banner photo by PeopleImages on iStock

[1] Corporate payment plays an important role for European companies | AirPlus.com

[2] Payment optimization: Transforming data into insight | JPMorgan.com