8 KPIs to Track for Better Payment Processing

Tracking, evaluating, and acting on data from KPIs helps in identifying critical issues and potential opportunities in the payment process.

Evaluating the performance of your payment processing system is vital for the success of your e-commerce business. Key Performance Indicators (KPIs) for payment processing help to dig beneath the surface and offer valuable data that can be used to achieve your business objectives. Tracking, evaluating, and acting on data from KPIs helps in identifying critical issues and potential opportunities in the payment process. It also allows you to monitor the performance of your payment processor and payment approval rate.

Here are eight KPIs for payment processing that will lead your e-commerce business in the right direction.

1. Conversion Rate

The payment conversion rate can tell you how many of the shoppers on your site become buyers. In other words, it represents the percentage of unique buyers who pay and complete the purchase successfully. The higher the number, the better your business is doing in converting shoppers.

You can calculate the rate by dividing the number of purchases by the number of shoppers/visitors. For example, if there are 1000 shoppers for the day on your site and 250 of them made purchases, the payment ratio is 250/1000, sometimes referred to as a ratio of 250:1000, or 25%. 

The payment conversion rate is the most fundamental and reliable metric that should be a part of the e-commerce merchant’s analysis.

2. Bank Approval Rate

The bank approval rate tells you how many of the transactions submitted to the bank are approved or denied. Sometimes, the customer’s bank that issued the card is responsible for the hard declines in payments, which can impact your sales. This may happen due to an attempt to use a lost or stolen card, or an expired card. Hard declines are permanent, while soft declines are only temporary authorization failures.

Resolving a decrease in your bank approval rate requires understanding the root cause of the hard declines. You can work with the payment processing service to identify the bank making the declines. 

Ask for information such as the bank name and bank identification number (BIN). You may also request a ‘decline reason’ report to review spikes. 

Another solution is for the payment processor to route transactions to different acquiring banks in the same region as the issuing bank. Approval rates tend to be higher when the acquiring and issuing banks are in the same region or country.

Hand reaching for KPI Key Performance Indicators on transparent screen
3. Revenue, Sales, and Rebills

Whether you are looking at a snapshot of today or a broader view of an entire month, it is important to closely monitor the amount of revenue coming in, and the number of sales and rebills incurred. 

Revenue, sales, and rebills are three separate KPIs. 

  • Revenue: sum of all transaction types, not including chargebacks, refunds, and partial refunds.
  • Sales: sum of all new sales during the month, excluding rebill, cross-sale, upgrade, chargeback, refund, partial refund, and upgrade payment method
  • Rebills: sum of all rebills during the day, including upgrade and instant upgrade


Daily reporting provides a quick temperature check and can alert you to something amiss. Monthly reporting provides even more perspective on how your business is performing. If you are working towards monthly goals, you and your team can easily and quickly make comparisons to months’ past. 

If your payment processor has artificial intelligence (AI) capabilities, these KPIs also can help forecast performance.

At Vendo, our AI tools analyze patterns from historical data and update the forecast to take into account any changes in your business. Forecasts are calculated using an AI model (decision-tree), based on historical data (hour, day, day of week, month, etc.). Our advanced model even takes uncommon scenarios into account.

4. Lifetime Value (LTV)

There’s no denying the value of your customers on any given day. A sale is a sale, after all. But, what is a customer’s value over the lifetime of their tenure with your business? Calculating lifetime value (LTV) helps you determine how much you should spend on acquiring and serving a customer. 

An assessment of your current customers’ lifetime value (LTV) may indicate whether you should invest your money in customer retention or attracting more customers. 

In many cases, it costs more to get a new customer than it does to keep an existing one. But, you won’t know that for sure until you crunch the numbers.

Here’s an example of how you might approach LTV calculations, using a six month timeframe and the following key data points:

  • Average Purchase Value—value of customer purchases over six months divided by the number of purchases. 
  • Average Purchase Frequency—using that same six-month time period, divide the number of purchases made by the number of customers who completed a transaction.
  • Customer Value—average purchase value multiplied by average purchase frequency.
  • Average Customer Lifespan—average length of time a customer continues to purchase from you.

Then, use this formula: 

            Customer Value x Average Customer Lifespan = Lifetime Value

Making this calculation on a regular basis may seem like a burden or more effort than it’s worth. Fortunately, there are AI tools available that actually do the math for you on a daily basis. Connect with us if you would like to learn more about that option.

5. Net Member Change

The net member change tells you at a glance whether your company is growing or declining. For online businesses offering subscriptions, it is a “must monitor” KPI. As the term would suggest, the net member change tracks the number of new members less the number of canceled memberships in a specific time period. 

It is important to understand the reasons behind canceled memberships, so that you can take preemptive measures to reduce them for the future.

Members may cancel for a variety of reasons, including price, content quality, frequency of content updates and new content, and difficulty in navigating the website.

Woman speed skating touches ice with one hand
6. Chargeback Rate

When customers see unwelcome costs on their credit card bill, they opt to file a claim to their specific credit card network. While most e-commerce merchants want to avoid disputes with customers, the rise in chargebacks, also termed “friendly fraud,” creates a hurdle in daily business. 

The chargeback rate is a vital indicator representing the chargeback ratio to overall transactions. For credit card companies, including VISA and Mastercard, chargeback thresholds vary. For example, VISA will flag merchants with a chargeback ratio above 0,65% and 75 chargebacks. Merchants above 0.9% and 100 chargebacks will be fined by VISA. Mastercard may issue a fine if a merchant is above 1% and 100 chargebacks. 

Another more “hidden” KPI to consider is the “Fraud to Sales Ratio,” which includes not only chargebacks, but also transactions that a customer may have flagged as fraud. This may happen even if the issuer has decided not to initiate the chargeback.

The best way to avoid chargebacks is to have a clear understanding of chargeback rules and work with a payment processing provider who has robust fraud identification systems in place.

7. Payment Method and Card Type

The payment options offered to customers play a prominent role in their completion of the checkout process. Ideally, your checkout page should include a variety of popular payment methods and card types to improve conversion. 

Identifying the reasons for declining transactions related to payment methods can be difficult. Studying the data showing your customer’s preferred payment method will allow you to offer the best options.

When you introduce a new payment method, compare it to the other existing methods on your site to see which one performs best.

For example, launch a digital wallet and compare it with existing methods to understand its viability as a payment option. 

The types of credit/debit cards that your customers can use is also an important aspect that determines the conversion rate. You may wish to highlight the most popular payment methods on your checkout page and test new payment methods, such as cryptocurrency, that can help attract an entirely new customer base.


8. Traffic

Tracking visitors to your website–from the initial entry point, to the page offering membership options and prices, to the final checkout page–is a rich source of information for your e-commerce business.

By understanding how many visitors to your website went to the pricing and membership page and then clicked through to the checkout, you can identify potential roadblocks–for example, messaging or technical issues–and address them to smooth the path to a successful checkout.

To calculate the final click-through rate, divide the total number of visitors to your website in a given time period by the number of visitors who went to the final checkout page.

The Bottom Line

KPIs can help you scale your business by allowing you to identify and address issues in the payment process, including soft declines, fraud, chargebacks, friction at checkout, security, and more. Use these KPIs to evaluate the payment processor you are using for your e-commerce business. 

For even more information on KPIs, check out our helpful documents page.


Contact us if you’re interested in exploring the many ways to maximize your revenue growth with payment processing tactics.

Vendo offers comprehensive payment processing services to e-commerce merchants. Our innovative, AI-powered tools offer merchants simple, secure, and seamless payment solutions, along with expert customer support from integration to end-user concerns. Our expert team works 24/7 to shape your vision into reality.