What Is Transaction Success Rate (tsr)? Why Is It Important?

By Author: Sahil Verma
Total Articles: 160
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The Transaction Success Rate must be considered when calculating the number of approved transactions processed through that online payment gateway. Transaction failure is one of the challenges in digital payments for your online business because it leads to lost sales. As a result, comprehending the entire concept of the Transaction Success Rate and its significance is critical.

What is Transaction Success Rate (TSR)?

When the total number of successful transactions for a given time period is divided by the total number of transactions (processed by customers with all statuses), the result is the Transaction Success Rate (TSR).

Example Calculation of Transaction Success Rate:

Customers, for example, completed 100 transactions, with 95 of these transactions being successful. The Transaction Success Rate (TSR) is then 95/100, or 95 percent.

However, suppose those 5 failed transactions were retried with the 'Payment Retry' option, and only two of them were successful. The TSR would now be 92 percent (97/105).

So, initially, the TSR was 95%, but after the ...
... retry, it dropped to 92 percent. Nonetheless, the total accepted payment amount increased.

Importance of the Transaction Success Rate

The primary reason for considering TSR is the customer experience. Customer frustration and eventual cart abandonment, i.e. incomplete purchase and loss of payment due to loss of sale, would result from the increased transaction failure percentage.

The TSR calculation is used to select the best payment gateway. It allows you to compare multiple payment gateways and select the one with the highest Transaction Success Rate. TSR assists in determining which payment gateway is the best.

It is important to note, however, that the reasons for the transaction failure could be a variety of things, such as downtime, technical glitches, and so on. However, there may be circumstances for which the payment gateway checkout is not liable.

As a result, choosing a payment gateway based solely on its low TSR should be avoided. Other factors, such as pricing, services, and so on, as well as the reasons for the failed transaction, must be taken into account.

On the other hand, making the right payment decision is critical in order to avoid losing sales from genuine customers. As a result, before integrating a specific payment gateway solution into their website or mobile application, developers and businesses consider the Transaction Success Rate factors.

Importance of TSR in Various Business Models

The importance of calculating the Transaction Success Rate varies depending on the industry, business model, and targeted customers.

For example, on an eCommerce platform, if a customer is unable to complete a payment transaction, the purchase may be abandoned. Similarly, there are various platforms for making travel and hotel reservations, so the customer may switch to another one.

If someone is buying stocks or mutual funds, they will opt for the retry if they want to make a good investment. The same is true for the food ordering platform; the customer would return to retry the payment for their desired dish.

As a result, the significance of the success rate varies depending on the business model. Customer intentions and purchasing behavior are extremely important.

In the end

It is critical that when selecting an online payment gateway, the TSR takes into account a variety of factors. Knowing the reasons for the failed transactions may help you understand the relationship between the TSR and the payment gateway selection. SifiPay provides you with the reason for the failed payments, which aids in customer recovery. Due to the integration and relationship with the best banking partners and reputed financial institutions for payment processing, SifiPay has a very high transaction success rate.

SifiPay enables the best customer experience and successful payments! Sign up now...