Payomatix founder links payment approval rates to revenue risk

Ruchi Rathor, founder of Payomatix, has argued that payment approval rates should be treated as a commercial measure, rather than a back-office technology indicator. In a Finextra community opinion post, Rathor defined the metric as the percentage of payment attempts that complete successfully and said even limited improvements can affect revenue capture for businesses processing large transaction volumes.

Rathor said companies often assign payment performance to engineering teams, while the effects of failed transactions reach sales, customer service, retention and operating efficiency. Finextra labelled the post as external content provided by an author without editorial editing and said it reflected the author’s views.

Failed payments create wider costs

According to Rathor, an unsuccessful payment can cost more than the value of the transaction at the checkout. She said businesses may lose the immediate sale and also face more support requests, higher cart abandonment, weaker customer confidence and extra operational work to resolve the issue.

For subscription companies, Rathor said recurring-payment failures can raise involuntary churn, cutting into repeat revenue when a customer leaves because a scheduled payment does not go through. That makes approval performance relevant to businesses that rely on predictable cash flows, including software, media, consumer services and other recurring billing models.

Rathor identified several sources of failure across the payments chain. Some are linked to customers, including low balances, expired credentials and data-entry errors. Others arise from infrastructure or institutional controls, including authentication problems, fraud-screening rules, network outages, issuer declines, connectivity interruptions and other disruptions.

How the payment chain affects the customer

The payment process involves several parties, including the merchant, the payment provider, the issuing bank and the network. Rathor said customers generally do not separate those roles when a transaction fails. They experience the failure at the point of purchase and may abandon the order, use a rival platform or reduce future engagement.

The mechanism is straightforward: a merchant can win the customer’s intent to buy, but the transaction still needs to pass through authorization, authentication and risk controls before funds move. If one stage rejects or interrupts the payment, the business may lose demand it has already generated through product, pricing or marketing activity.

Rathor said better payment performance can improve conversion rates, customer retention, lifetime value and operating efficiency without requiring additional marketing spending. She framed payment optimization as a way to increase revenue from existing customer demand, rather than relying only on new traffic or new product launches.

Data and routing tools under scrutiny

Rathor said payment operators are using operational data to identify weaknesses in the transaction process. Metrics cited in the post include authorization rates, decline reasons, retry success patterns, transaction completion times, geographic performance and the effectiveness of different payment methods.

She said these indicators can help businesses find recurring issues and adjust payment strategies based on evidence. Rathor described payment optimization as a continuing analytical practice, not a one-time technical deployment.

Looking ahead, Rathor said artificial intelligence, real-time analytics, adaptive authentication and intelligent routing are expected to play a larger role in improving payment outcomes and reducing unnecessary friction. She added that technology alone is unlikely to remove every obstacle, and said organizations will need to keep reviewing payment results as customer expectations and market conditions change.

This story draws on original reporting from Finextra Research.