The Strategic

Importance of
Payments in the US
From Cost Center to Revenue Generator
Flipping the script:
payments as a
competitive advantage
creating new challenges for businesses. Profit
margins and operational efficiency continue to
dominate boardroom conversations following
Jim Cho, Vice President the global COVID-19 pandemic.
and Head of Revenue
Growth, North America As it happens, the same technologies that have
[email protected] disrupted the status quo and shifted customer
expectations promise to open up exciting new
business opportunities. For businesses today,
modern payments infrastructure transforms
payments from a cost center into a source of
While digital technology has been evolving revenue and a competitive advantage.
rapidly for decades, the pace of change
has increased by orders of magnitude over This guide, produced by Checkout.com in
the past two to three years. Just look at partnership with Oxford Economics, shows
how ChatGPT has disrupted industries and you how.
captured our imaginations since launching
in November 2022. We’ll share:

In payments, the same is true. Online • H

 ow leaders in enterprise and high-
and mobile spending have surged. And growth organizations feel about the latest
consumers are more comfortable with developments and trends in payments
digital than ever before. Increasingly, • H
 ow they’re using new technologies to thrive
they expect every payment to be smooth in the digital economy
and seamless.
• T
 he impact they’ve seen as a result of
A surge of readily available customer data their efforts
– in 2020, every person on Earth created
1.7MB of data about themselves every Each section concludes with a reflection
second – has helped businesses better question we hope will spark productive debates
understand their consumers and adapt within your organization.
to their changing expectations. Online
checkouts are increasingly frictionless and If you’re a senior business leader – whether
borderless, and there’s an ever-growing you focus on strategic growth, financial
array of payment methods for customers to management, customer engagement,
choose from. product innovations, or operational efficiency
– this report is for you. I hope you find these
But if it has never been easier to complete insights helpful.
an online transaction – whether buying
a tennis racket, paying a utility bill, or If you have any questions or want to learn more
sending money to a family member abroad about how modern payments infrastructure can
– the uncertain economic climate is also benefit your organization, we’re here to help.

2
Methodology
Checkout.com and Oxford
Economics gathered the data
in this guide by surveying
500+ US merchants.

We also interviewed:

• F
 ortune 100 businesses like General
Electric HealthCare

• H
 igh-growth B2C and B2B technology
companies like Vimeo and Getty Images

• E
 stablished payments companies like
American Express

• U
 p-and-coming payments innovators
like Melio

All the businesses included

in the survey results make at
least 30% of their revenue
from online payments.

3
Payment optimization:
a vital driver for success
Our survey results uncovered two “The payment space is evolving quickly,
key insights. and this is creating new opportunities.
Take instant payments in the US. Not only
First, in the current economic climate, are they a very interesting development,
business leaders are most concerned because they offer immediate access to
about attracting and retaining customers, capital, but they have the potential to really
maximizing revenue, and increasing move the needle.”
operational efficiency.
Aharon Levine, Vice President
Second, businesses with optimized of Payments Strategy at Melio
payment processes were more likely to have
addressed these challenges successfully
and reported being more agile, adaptable, “In the current landscape, agility and
and responsive to their customers’ needs. adaptability are incredibly important.
There continues to be a lot of innovation,
For this reason, understanding and both in the US and internationally.
harnessing the power of modern payments Companies should strive for a data-driven,
infrastructure is no longer optional. collaborative, compliant and customer-
It’s a must. centric culture that supports the adoption
of these innovations and meets customers
where they are.”

Paul Martin, Vice President of

Global Emerging Payments and
Strategy at American Express

4
Main findings

64% of Only 23% of 32% of 36% of Marketplace

respondents respondents participants respondents
think optimizing their said their organizations said they need more spent more than 20%
payments strategy has see payments as a resources and support of their time on manual
positively impacted cost center. Overall, to optimize payments payment splitting. This
revenue. Payments most respondents view performance. highlights the need
were also more likely to payments as a valuable for more automation
be viewed as a source asset that helps them to streamline
of value rather than a attract more customers admin processes.
cost center within and boost revenue.
their organizations.

Merchants with Payment data has Merchants who

optimized payments huge potential haven’t been proactive
were better able for improving marketing, about optimizing their
to meet consumer sales, and customer service, payments infrastructure
demand for personalized as well as strengthening face higher costs,
experiences, increase anti-fraud protection higher risk of fraud,
loyalty, and reach without impacting and less transparency.
new markets. processing times.

5
C-suite perspective: the
impact of optimized payments
Modernizing your payment stack benefits all core business functions – the executive office,
finance, operations, marketing, and technology. Understanding how payments impact
each function is a crucial step toward optimizing your payments
strategy and ensures your teams derive tangible benefits.

CEO CMO
Digital infrastructure offers significant Data about buying behavior and geographic
competitive advantages, most importantly, trends enable more targeted campaigns
a newer, superior customer experience at while creating opportunities to enhance
lower cost and reduced tech debt burdens. the customer experience and increase
It’s also easier to comply with subtly conversions; faster checkouts, greater choice
different regulatory requirements in multiple of preferred payment options, and other
jurisdictions and, so, to minimize legal and features that increase customer satisfaction.
reputational risks. Transaction data also improves inventory
management by providing granular insights
CFO like average transaction amounts.
Instant payment processing and automation
improve liquidity, cash flow, and efficiency CTO
while lowering transaction fees and other Serverless technology reduces infrastructure
costs. It also reduces the need to handle costs, ensuring optimal performance and
physical cash. And it’s easier to expand minimizing downtime. When integrated with
into new markets and create new revenue SaaS applications, it enhances backend
streams. services, streamlines integration capabilities,
and offers customization options. In the long
COO term, modern infrastructure eases the tech
Operate more efficiently with automated burden and makes it easier to innovate.
invoicing and real-time analytics. Digital
infrastructure is also easier to scale and has
more robust anti-fraud protection, which
lowers risk and enhances brand reputation.

6
 How optimizing 64% recognized their payment strategy
played a critical role in increasing revenue
payments boosts over the past 12 months. 63% believe

revenue payment leaders will have a more important

role over the coming decade, and only
23% of respondents view payments as a
“I think optimized payments is probably cost center.
one of the easiest ways for US merchants
to drive incremental revenue when The biggest benefit of optimizing
they’re looking at expanding their payments is that it enables merchants to
global footprint.” deliver better security and a smoother
payment experience.
Eric Christensen,
Global Director of “More and more, what you don’t offer
Payments at Getty Images in terms of payment solutions is even
more important than what you offer.
Forward-thinking companies increasingly When you launch additional payment
recognize the pivotal role of payments. capabilities, you really begin to see how
With a sophisticated modular payment much more value you can create for your
stack, companies unlock revenue growth customers. Had you not looked at your
by leveraging business intelligence to database, you would’ve missed out on
enhance customer experiences, optimize those opportunities to do right by your
performance, increase conversions, and customers and grow your business.”
streamline reconciliation.
Aharon Levine, Vice President
30% of businesses in our sample report said of Payments Strategy at Melio
that online payments account for between
71% and 80% of their total revenue. As
it becomes clearer that optimizing their Modern payments infrastructure gives
systems can boost these numbers even both customers and vendors more choice
further, leaders’ perceptions of payments and flexibility.
are changing.

Share of revenue from online payments

31% to 40% 3%

41% to 50% 6%

51% to 60% 12%

61% to 70% 29%

71% to 80% 30%

81% to 90% 14%

91% to 100% 6%

7
 Customers can buy with confidence, so Consider split payments – the process of
they’re more likely to return in the future. dividing a sum into installments between
Similarly, if vendors can get paid in the way multiple sellers.
that best suits their businesses, they’re
more likely to stick with a marketplace or 36% of the US marketplaces and payfacs we
other platform long-term. surveyed said they spend considerable time
doing this manually. Optimizing the payments
“When I want to pay, I have my process can fully automate this daunting and
preferences. But my vendor may want error-prone task.
to receive funds differently. Being able
to meet those preferences on both A streamlined payments infrastructure
sides goes a long way, and it actually simplifies tasks, improves tracking, and
accelerates technology and innovation enhances security. Centralizing data
because you’re not interfering with how streamlines benchmarking, sales forecasting,
businesses prefer to deal with their cash and resource allocation. This all-in-one system
flow. You’re enabling it.” reduces errors and risks while also automating
chargebacks, refunds, and payouts, freeing
Aharon Levine, Vice President resources to focus on strategic growth.
of Payments Strategy at Melio
Reflection question
How does my organization view the role
Optimizing payments systems also frees up of the payments leader? And, how much time
valuable time and resources you can direct does my payments team spend on operational
towards revenue-generating activities. tasks that can be automated?

Proportion of time spent splitting payments

Industry: Marketplace Platforms or PayFac

0% to 5% 19%

6% to 10% 7%

11% to 20% 40%

21% to 50% 26%

51% to 75% 10%

8
 Enhancing the It’s only by meeting customers’ expectations
and minimizing friction that organizations can
customer experience foster customer satisfaction and loyalty.

with seamless “One message I’d stress is that it’s not just
payments the backend of payment processing that can
cause issues. Some aspects of the customer
experience, like elements of the checkout
“The customer experience is what I like
page, may also be driving negative payment
to call a super-mega-overarching-
performance. And improving them can
critical-A1 priority, and it should come
improve payment performance.”
above everything else. The customer
experience is the most important thing
to consider when you make decisions Justin Kim, Vice President
about payment processes, tech, and of Product at Vimeo
anything else in your business.”

Our research not only strongly supports this

Justin Kim, Vice President
view, but highlights the important role of
of Product at Vimeo
payment choice in meeting these expectations.
Offering a wide range of payment options,
including alternative methods such as mobile
Recognizing payments’ instrumental role
wallets, has a huge impact on any business’
in enhancing the customer experience
ability to attract new customers and maximize
and fueling growth is the cornerstone of
revenue.
sustained business success. According
to Salesforce, 88% of customers say the
When customers abandon their cart, it’s
experience a company provides, including
usually down to issues at the payment stage.
when it comes to payment, is as important
In particular, the two biggest reasons for cart
as its products or services. And 73% expect
abandonment are:
companies to understand their unique
needs and expectations. • N
 ot being able to use a preferred local
payment method or pay in the local currency
Put simply, seamless payments experiences
aren’t a luxury, but an absolute necessity. • L
 ack of digital wallet options

Impact of failure to activate local payment methods

No impact 1%

Minimal impact 12%

Moderate impact 36%

Significant impact 44%

Very significant 8%
impact

9
 51% of US merchants told us not catering to But, seamless online payments go beyond
local payment preferences has negatively just diverse options; they demand optimized
affected their business over the past 12 backend processes for speed, security, and
months. As a result, merchants who do reliability. This means real-time card validation,
offer the proper choices and are sensitive user-friendly authentication, and continuous
to local payment preferences stand out monitoring to address issues promptly.
from the crowd, gaining a significant Modern payment infrastructures now bridge
competitive advantage. front-end user experiences with backend
efficiency, delivering seamless payments
“Recognizing the importance of catering that meet the evolving expectations of
to diverse customer preferences, our today’s consumers.
objective is to ensure that regardless of
the customer’s location or the nature of Reflection question
their purchase, their preferred payment What payment improvements has my
option is readily available. This approach business made in the last year to enhance the
not only accommodates individual customer experience and make it a priority?
customer needs but also enhances our
checkout conversion rates.”

Kelsey Dowling, Senior

Staff Technical Product
Manager, GE HealthCare

10
 69%
of respondents agree
their C-suite understand
the value of payments
Unsurprisingly, our research found there’s
to the business growing recognition of payment data’s
strategic importance. Nearly 70% of
survey respondents agreed that the
C-suite valued payments.

“A payment geek’s best friend is their

payments data, especially around
authorization performance.”
Using payment data
to boost revenue Eric Christensen,
Global Director of
Payments at Getty Images
“Harnessing payment data has allowed
us to strategically align payment By unlocking a wealth of information
experiences, improve payment about customer behavior, preferences,
transaction performance, and strengthen and spending patterns, payment data is
fraud detection measures, resulting in a powerful tool for targeted marketing
increased order conversion rates and strategies. When integrated with Customer
seamless settlement of transactions.” Relationship Management software,
Enterprise Resource Planning software,
Kelsey Dowling, Senior and other systems, payment data becomes
Staff Technical Product even more powerful, as it gives you a
Manager at GE Healthcare holistic view of customer interactions and
business performance.
Payment data is fundamentally changing
how US businesses operate by providing You gain comprehensive insights into
unprecedented consumer insights. This customer preferences, buying patterns,
data-driven understanding of customers and satisfaction levels. It’s also easier for
enhances operational efficiency, reduces many teams within your organization to
compliance risks, and ultimately fosters view the data, enabling more customer-
growth by optimizing processes and centric strategies, better decision-making,
improving the overall customer experience. and, ultimately, stronger growth.

11
I am given the support and resources necessary to help
deliver optimal payments performance for our business

Strongly disagree
2%

Disagree
2%

Neutral
27%

Agree
54%

Strongly agree
15%
Statements in regards
to payments
I get C-level buy-in for the value of payments
to the business

Strongly disagree
1%

Disagree
8%

Neutral
22%

Agree
50%

Strongly agree
19%

Working to improve payments performance

is interesting and rewarding

Strongly disagree
0%

Disagree
4%

Neutral
36%

Agree
39%

Strongly agree
21%

The Payments Leader’ will be a professional

role of growing presence and significance in
Challenges outweigh the rewards in my role the coming decade

Strongly disagree Strongly disagree

4% 0%

Disagree Disagree
31% 2%

Neutral Neutral
49% 36%

Agree Agree
14% 42%

Strongly agree Strongly agree

3% 21%
 Analyzing payments data can also shed “Granular payments data you can precisely
light on operational inefficiencies within tie back to the customer transaction
your organization: bottlenecks and manual journey is key to optimizing payments. You
processes that could be streamlined to want to be able to quickly slice and dice
save time, free up resources, and improve by any number of dimensions including
the customer experience. And, even more customer, product, subscription plan
significantly, it can shine a spotlight on purchases, payment method, currency,
compliance issues and other risks. countries, and so on.”

Despite these significant benefits, our Justin Kim, Vice President

research suggests payment data remains of Product at Vimeo
largely underutilized. Around one-third of
survey participants told us they need more
support and resources to deliver optimal Reflection question
payments performance. And around 10% What quantifiable value or tangible
said they faced fines due to payment impact has my organization gained from its
processing issues, with 38% of them saying payments data in the last year?
the fines were significant.

13
 Fighting fraud “By utilizing card-on-file tokenization,
we ensure enhanced security measures,
through safer streamline compliance with PCI DSS,

payments and simplify the auditing process. This

reinforces our commitment to protecting
customer data.”
“The US payments landscape is very
Kelsey Dowling, Senior
dynamic. On the one hand, there’s
Staff Technical Product
constant evolution – new tech, new
Manager at GE Healthcare
providers, new methods. On the other,
there are also new regulations and attack
paths that bad actors can take. So, I think But real-time fraud detection and monitoring
the biggest trap or mistake companies systems have an equally important role to
can make is to rest on their laurels and play. As the adage goes, prevention is better
become complacent.” than cure.

Justin Kim, Vice President Modern anti-fraud systems use a combination

of Product at Vimeo of machine learning algorithms and rule-based
protection to detect patterns and anomalies
humans can’t. Real-time monitoring also makes
In 2021 alone, online payment fraud it possible to take immediate action, blocking
increased 285%. And, by 2025, losses are bad actors before they’re able to cause lasting
expected to exceed $206 billion. damage.

Fraudsters are getting smarter about Businesses should also consider choosing
exploiting the growing volume of online payment service providers on the basis of how
commerce and capitalizing on businesses’ much data they can supply them with. Fraud
vulnerabilities. This is heightening the and chargeback analysis contains valuable
risk of financial losses and, crucially, of insights you can use to thwart future attacks.
reputational harm. But the more data you can obtain, the better
equipped you are to proactively keep your
Yet, our research found that only about 35% customers (and reputation) safe.
of survey respondents receive fraud and
chargeback analysis from their payment “Analyzing spending patterns and trends
service providers. This suggests a gap in helps identify partnership opportunities,
security strategies and highlights the need inform marketing efforts, and improves
for businesses to prioritize fraud detection user experiences. Fraud and risk data helps
and prevention. ensure secure payments, while cross-
channel and cross-product data enables
Advanced security measures like a seamless customer experience. Data
tokenization, which replaces payment helps inform everything we do at American
details with unique, randomly generated Express. It gives us deep customer insights,
codes, and encryption, which encodes helps improve risk management, enhances
payment data so unauthorized individuals the customer experience, and drives
can’t read it, significantly reduce the risk of revenue growth during the scaling process.”
data breaches.
Paul Martin, Vice President of
Global Emerging Payments and
Strategy at American Express

Reflection question
How often do I optimize my business’
fraud strategy? And, how quickly can I respond
and dispute chargebacks?

14
Expert Spotlight:
Unleashing the power of
US payments optimization
To fully grasp the potential that lies within the
US payments landscape, payments leaders
need to understand the transformative
Ahmed Siddiqui, Author advancements and inclusive solutions that
of The Anatomy of the exist today. There’s an incredible opportunity
Swipe and Chief Payments in this dynamic and complex ecosystem for
Officer at Branch payments professionals to provide more
choices and solutions to meet consumers
where they are. By understanding the
historical infrastructure and exploring new
possibilities, payments leaders can unlock the
Archaic. Slow. Limited. That’s how most true potential of the US payments industry.
think about payments innovation in the
US. But another way to think of it is vast,
robust, and full of options. The US payments Embracing card-based
infrastructure facilitates the movement
of substantial sums of money within its
payment methods and
borders — the Automated Clearing House innovations
network (ACH) pushed over $70 trillion
in 2022. This scale of operations is a At the core of the US payments system is a
significant consideration when assessing strong, dependable card-based infrastructure,
the adoption rate of faster payment with US consumers and businesses relying
innovations such as FedNow and RTP in heavily on card payments. As a result,
comparison to other regions. modern payment methods and innovations
in the US are built around cards. I am
While the US may not have the same speed genuinely excited about the likes of Cash
in money movement as some other parts App and Venmo, which have illustrated the
of the world, no single form of payment is power of card rails and popularity of instant
mandated. That may make the widespread payments. These platforms along with push-
adoption of faster payments a little slower, to-card mechanisms like Mastercard Send
but it has given the opportunity for new and Visa Direct have been instrumental in
technologies and solutions to emerge. revolutionizing the speed of payments in the
Key players like Visa, Mastercard, and US. Instant payments rail Visa Direct processed
American Express have made remarkable $5.9B in FY 2022 in contrast to only $500M in
advancements in delivering solutions that RTP payments that have been processed since
dominate the market. its inception over five years ago.

15
 While they have a ways to go in contrast to
push-to-card innovations, the introduction
Prioritizing the
of RTP and the more recent unveiling of customer experience
FedNow signify significant strides toward
achieving widespread coverage in the Because of this emphasis on choice and
US. These innovations have provided options in the US, payments leaders should
remarkable performance, widespread prioritize optimizing the customer experience.
coverage, and growing adoption as It’s essential to go beyond the successful
users begin to demand more seamless completion of a transaction and support
user experiences. what happens afterward. Often, the last mile
of the payment process, such as contacting
When it comes to receiving payments, the customer service for payment reversals or
tap-to-pay feature on iPhone has emerged troubleshooting payment issues, is overlooked
as one of the most exciting developments. by payments leaders. But, this aspect is crucial
A new way to embrace card payments, in shaping the overall customer experience,
this technology has opened doors for which holds significant weight in the success
individuals who may not have considered of businesses.
themselves as traditional merchants. With
just a smartphone, anyone can accept Consider what’s going to keep a customer
payments and become a small business, coming back to your experience when they
eliminating the need for expensive, bulky have so many options. To create a positive
hardware. The ease of set-up also promotes customer experience, payments leaders
greater inclusivity and accessibility. should invest in robust customer support
channels, offering timely assistance and
Although complete coverage remains a solutions. By addressing the customer’s
challenge, the promise of these innovations journey beyond the payment itself, business
is undeniable, instilling a strong belief that leaders can offer more transparent and
the industry will embrace faster payments. efficient communication regarding payment
As a result, the payments landscape will processes, potential delays, and any necessary
offer increased efficiency and accessibility, reversals that would enhance customer
benefiting businesses and consumers alike. satisfaction. This attention to detail in the
post-payment phase is crucial for building
trust, maintaining loyalty, and differentiating
in the highly competitive US market.

16
 Collaborating to Payments leaders can strengthen in-house
teams by equipping them with the right
combat fraud partners. Businesses should invest in
experienced professionals and empower
To strengthen a seamless payments them with the authority to respond quickly
experience, businesses also need to stay to evolving fraud trends. Additionally,
ahead of fraud. Fraud impacts both the partnering with reputable fraud prevention
customer experience and your bottom solution providers can further enhance
line. Because the US is slower to adopt security measures. These partnerships
faster payments and fraud is rapidly enable access to advanced technologies
evolving, the landscape is particularly and AI/ML tools, as well as expertise
vulnerable. Collaboration, partnerships, specifically designed to combat fraud.
and pooling experiences can better prepare
payment leaders. There is no question that the US payments
landscape is a dynamic space that presents
To yield faster (and more effective) fraud unique challenges and opportunities for
mitigation, collaboration among industry payments professionals. And, the tide
players is pivotal. Sharing insights, data, seems to be turning in what seems to
and best practices within the payments be the slow-to-modernize US payments
ecosystem facilitates a collective effort ecosystem. That’s why it’s important
in detecting and preventing fraudulent to better understand the diverse range
activities. Establishing industry-wide of payment methods available, the
consortiums also fosters a collaborative infrastructure underpinning the US
environment where businesses can economy, and the diverse (and changing)
identify emerging fraud patterns more demands of the US consumer.
swiftly, proactively respond to threats,
and implement necessary measures By staying curious and continuously
to safeguard the integrity of the US questioning existing norms, we can drive
payment ecosystem. meaningful advancements and make
payments more accessible, efficient, and
secure. Together, we can shape a future
where payments become seamless and
empower businesses and individuals alike.

17
The path forward: modern
payments infrastructure
as a strategic imperative
“If you’re not happy with what you see in But, beyond the financial bottom line,
payments, do something about it and be embracing modern payments infrastructure
an agent of change.” also has other significant benefits for US
organizations. Greater operational efficiency.
Justin Kim, Vice President Greater security. Less risk. Better decision-
of Product at Vimeo making through the insights in payments data.

And, most important of all, greater

In 2023, US merchants can no longer customer satisfaction, more loyalty,
expect consumers to accept whatever they and enhanced reputation.
have to offer without question.
In short, optimizing payments systems is an
Today’s consumer has very clear ideas unmissable opportunity to stand out and
about what the shopping experience stay ahead. A way to not only unlock the
should look like. They expect tailor-made, full potential of your operations, but also
highly personalized service as a matter of to enhance the power of your brand.
course. And our data leaves no doubt that It’s now time to take action and embrace
smooth, seamless, and secure payments the path forward. By investing in modern
increasingly hold the key to meeting and, payments infrastructure, your organization
indeed, exceeding this expectation. can thrive in the dynamic and competitive
US market, leading the charge into the
Two-thirds of the organizations we future with confidence.
surveyed told us implementing payment
strategy improvements has played a critical
role in boosting revenue over the past
twelve months.

18
Checkout.com is the enterprise payments platform designed to
power high performance. Our modular technology is built for
flexibility, scalability, and efficiency – transforming payments
into a revenue driver. With an expert team spanning 19 offices
worldwide, we deliver clear insights, strategic partnership, and
measurable value, helping you navigate the complexities of
payments. Join global brands like Sony, SHEIN, Wise, Patreon,
and GE HealthCare and thrive in the digital economy.

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