Total payment volume (also known as total processing volume) is a widely used term in the payments space and acts as a useful measure of monetary value generated over a particular time period via any payment method.
Essentially, while TPV is something of a blunt instrument when it comes to measuring financial performance, it can offer an insight into the growth and reliability of a particular payment processor.
In this article, we explain what TPV is, how to calculate it, and why it’s important. We also look at some real life examples of TPV in the payments space and show how you can elevate your TPV with Checkout.com.
Total payment volume (TPV) measures the gross value of payments successfully processed through a payments platform over a given timeframe.
By benchmarking this figure against comparable payment processors, you can gain an insight into things like financial health, performance, and market postion.
TPV does measure revenue to an extent. However, as it doesn’t account for expenses like transaction fees, it’s important to note that TPV does not reflect profitability or the amount of net revenue generated by a platform.
Many notable payments platforms publish TPV in their financial reports, making it easy to compare the TPV of different providers.
TPV is a fairly simple calculation involving the sum of every transaction processed by a platform over a predefined period.
Expressed as a formula, TPV looks like this: TPV = Σ (Ti).
Σ is the symbol for summation notation. Ti represents the monetary value for each transaction.
TPV is a critical metric in payment processing and can offer you insights into:
Checkout.com provides an integrated set of tools and features designed to enhance and simplify payment operations for your business. With a focus on boosting efficiency, reducing fraud, and opening up new global markets, we can help your business grow its TPV.
For example, our platform lets you process payments in more than 150 currencies and offer dozens of popular local payment methods to your customers, helping to increase transactions and, therefore, your TPV.
Likewise, multi-factor authentication and machine learning tools that stop potential fraud while approving more legitimate transactions can reduce declines and boost your acceptance rates. That means more genuine sales and a higher TPV.
Speak to our sales team to find out more about how Checkout.com elevate your TPV.