Once a potential customer has reached the checkout page of your website, it’s easy to think that the hard work is complete. But that could be a costly mistake. Averages taken from various different eCommerce studies found that 69.8% of shoppers abandon their online shopping carts.
Of course, in the majority of cases, these checkout abandonments are not the fault of the eCommerce providers. In fact, they are not the fault of anyone in particular.
Online shoppers browse, compare prices, and save gift ideas for later - all of which can mean that they reach the checkout page but fail to complete a purchase.
However, there certainly are times when shoppers abandon their purchases due to frustrations with the eCommerce experience.
Perhaps the checkout process is overly complicated or the variety of payment methods on offer was not satisfactory - whatever the exact reason for abandonment, there are a number of issues that merchants can address.
Conversion rate optimization can significantly reduce the number of online shoppers that abandon their purchase after reaching the checkout page - and making more effective use of your payments data holds the key. Given that optimizing your checkout conversion rate could save online merchants across the US and EU an estimated $260 billion a year on abandoned orders, businesses can’t afford to let this lost custom continue to slip through their fingers.
With many eCommerce sites, the payments space is not given the level of prominence that it deserves. Facilitating customer payment is obviously a necessity for revenue generation but it is rarely viewed as a potential competitive advantage.
Through payments optimization, online businesses can deliver better customer experiences, gain a deeper understanding of their revenue streams, and drive growth in new markets.
Despite the huge amount of data available to eCommerce firms today, many continue to deliver a subpar checkout experience - causing their customers frustration and costing them sales.
In addition to the globally recognized debit card providers like Visa and Mastercard, shoppers today may be able to choose from mobile digital wallet applications and online bank transfers, as well as other alternative payment methods (APM) like e-invoices, pre-paid cards, or cryptocurrencies.
Although the growing maturity of the payment space has given consumers more choice, it has presented numerous challenges for payment service providers (PSPs). Not only do PSPs now need to connect to a greater range of global acquiring networks, but they must also remain compliant with changing rules and regulations while continuing to offer an increasing number of services at a lower cost. This rising complexity has a knock-on effect on the simplicity of the offering that online merchants can deliver for their customers.
The added complexity of the payments space has left merchants with a lot more information to get to grips with. This is a challenge that many eCommerce sites are struggling to manage. Firstly, it can mean that they are not fully informed on all the variables when they enter into negotiations with PSPs or other platforms.
Secondly, many merchants do not have access to detailed insights regarding their own customers, their online shopping journey, and what it is that makes them commit to a purchase or not. Without this visibility, it is impossible for them to improve their checkout conversion rate.
The eCommerce explosion has been accompanied by another, less welcome growth area: online fraud. Estimates indicate that fraudsters will cost online merchants more than $12 billion annually - a figure that has been boosted by the COVID-19 pandemic. Commonly employed methods include identity theft, affiliate fraud, and so-called friendly fraud.
Although fraud can lead directly to revenue losses for the merchants involved, it can also have a negative impact on conversion rates. The challenge facing eCommerce sites concerns striking a balance between security and conversion. Strict controls are obviously necessary to block fraudsters but overly stringent policies may lead to false positives that prevent genuine customers from completing their purchases.
Fortunately, fraud analytics and other digital tools like artificial intelligence and machine learning can be deployed to more accurately deter fraudsters without harming conversion rates.
Improving checkout conversions is certainly a challenge - the sheer number of customers that leave abandoned online shopping carts is a testament to that - but the online ecosystem provides businesses with a powerful weapon to meet this challenge.
By harnessing data about your customers and their online shopping experiences, businesses can optimize their conversion rates.
The sheer breadth of data available to merchants must no longer go underutilized. This includes demographic data, geographic data, time spent on a webpage, where your traffic came from, customer experience (CX) feedback, and internal auditing data. All these metrics and more should be analyzed to build a clearer picture about why some online visits convert into sales and others do not,
There are a huge number of things that merchants can do to improve the customer journey - but they will only gain an understanding of what’s effective and what isn’t through data. Redesigning your eCommerce site, offering additional payment methods, improving risk management, and boosting the mobile-friendliness of your site are all worthwhile methods to explore that could improve checkout conversions. But you’ll only know for certain if you are analyzing your payments data effectively.
A payment audit is the first step of the journey to optimizing your conversion rate. Through the auditing process, you can learn more about visitor behavior, find the reasons why some visitors are failing to convert, and explore efforts to reduce this.
At PaymentGenes, we offer a 360° Payments Audit that grants you access to an extensive costs and benefits report of your payments data. With our support, you can realize the maximum savings and optimizations through our industry benchmarking data. You will then receive a detailed report containing our analysis, suggestions, and negotiation points for optimizing your checkout conversions, all backed by a multitude of data points.
The payments process is increasingly becoming a point of differentiation for customers in the eCommerce space. If merchants do not make this part of the customer journey as smooth as possible, not only will consumers abandon their online carts at the checkout stage, they will be unlikely to return.
Fortunately, at PaymentGenes, we can sit between a merchant’s payment platform and their PSP, giving them the ability to optimize their payment flows. Offering weekly calls, negotiation support, forex cost reduction, and realizable conversion uplift, we enable businesses to optimize all parts of their payment process: including costs, authorization rates, and fraud.
Do you need help making the most of your payments data to drive customer conversions and seize growth opportunities? PaymentGenes is a one-stop partner for eCommerce merchants, offering business consultancy, analytics support, and payments optimization.
Find out more about how PaymentGenes's Payments Audit & Optimization Services leverage payments data to increase conversion rates!
Get insights into the potential impact of PSD3 in 2023 on the payments industry. Discover key findings from consultations with industry experts and organizations, including concerns about coverage, regulations, data usage, and security. Learn about the transition from PSD2 to PSD3 and how it aims to incorporate open finance principles for secure data sharing and competition. Embrace the future of payments with innovation, competition, and consumer-centricity as we anticipate the unveiling of PSD3.
As online transactions have grown in popularity, the need for businesses to choose the right payments vendor has become increasingly important. For growing businesses, in particular, selecting a payment service provider (PSP) that can scale rapidly and seamlessly handle a large volume of transactions is key. The RfP process should help businesses assess whether a payments provider meets all their requirements but to provide further assistance, we’ve listed seven key considerations below.
SaaS providers that can successfully integrate billing and payments into their software have a unique opportunity to add value to their customers while generating recurring revenue for themselves. Yet, most SaaS providers don't - signifying the lack of available knowledge on how the right payments functionality could prove mission-critical.