In our latest research, Accelerating revenue growth: How incremental payment optimization can drive up to 30% revenue gains, we outline ways businesses can optimize the payment processes, illustrating how even minor adjustments can significantly impact a company’s bottom line.
We’ve previously detailed how value can be generated pre-purchase in the payments flow. Here, we’re analyzing how online businesses can accelerate revenue during the payment process.
According to our study, a staggering 70% of overall cart abandonment happens after the customer enters the transaction flow. To improve transaction performance and increase conversion rates, businesses should look at optimizing three areas: removing friction from the payment process, providing relevant payment and financing options, and minimizing transaction errors.
Low-friction payments are key
Our survey found that 42% of drop-offs occur when customers are prompted to enter personal details and payment information. Implementing autofill functionality via browser plugins and digital wallets, alongside express payment solutions such as Apple Pay or Shop Pay, reduces the burden on the customer. Allowing customers to complete purchases in guest mode can also help capture more sales by converting consumers who prefer not to sign up for memberships. These approaches minimize the steps shoppers must take to finalize a purchase, keeping their buying intent high until the transaction is completed. Industry research suggests that removing friction from the payment process can lead to a 35% uptick in conversions, highlighting the direct impact of streamlined payment experiences on revenue acceleration.
Sufficient payment and financing options
While offering multiple payment options is advantageous and tends to reduce cart abandonment rates, our findings suggest a strategic approach is necessary. An overload of options can lead to decision fatigue, increasing the perceived complexity of the transaction process. Therefore, it is crucial to select, test, and prioritize payment methods that resonate with the target demographic’s preferences and habits, and tailor the payment mix on a market-by-market basis. Additionally, integrating flexible financing solutions, such as installment plans or buy-now-pay-later (BNPL) options, democratizes high-value purchases, further stimulating conversions.
Prompt and accurate transaction processing
Almost a quarter of brands reported that their customers predominantly abandon carts following declined payments or error messages. A further 31% cited slow transaction times as one of the most common feedback they’d received. Current consumer benchmarks set the expectation for transaction completion at under two minutes, while tolerance for declined payments is increasingly low with 42% of consumers walking away after experiencing a payment error.
To align with these standards, eCommerce brands must ensure their payment infrastructures are not only rapid but also scalable, minimizing downtime and errors. This can be achieved with advanced payment technology such as cascading mechanisms, account updater and robust acquirer redundancy across target markets, especially during peak seasons. Enhancing system architecture to support faster processing times and more reliable transactions can significantly reduce drop-off rates and improve the payment experience.
Optimizing payment UX is a direct path to increasing revenue, with potential gains of up to 20%. By streamlining payment processes, offering diverse payment options, and ensuring swift and reliable transactions, businesses can significantly boost conversion rates and customer satisfaction. Read the full study to find out how marginal gains in various aspects of the payment process can cumulatively lead to significant revenue increases.
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