The Checkout Conversion Index tells us that $200 billion in sales are lost each year due to friction in the checkout process, accounting for roughly a 50 per cent abandonment rate. Whether its too many form fields, choice paralysis, a lack of options, absence of a local currency or lengthy login requirements, it's clear there's room to improve customer checkout experiences.
A hypothesis supported by 2019 NRF report which indicated that the majority of shoppers believe technology and innovation are improving their online experiences. With players like Stripe, Paypal, Adyen, Braintree and Apple enabling tokenized payments and approaching native checkout experiences in their unique way; the excuses for clunky checkout flow become few and far between.
How do brands minimise the space between the decision to buy and the act of buying?
Saved payment details & preferences
Collecting payment information to store against customer profiles may seem obvious, but like one-click purchasing, it’s still a feature many brands are yet to embrace. Where customers can save multiple payment types, you’ll also need to understand which ones they’d prefer to use, potentially a different method for different contexts.
For those that have, the payment information is gathered at two key journey points:
At the point of profile
If it feels counterintuitive to ask for payments detail at the point of profiling, e.g. while asking for name, email address, you’re probably right. Generally, users need to innately understand why payment details are required at this point in the relationship rather than the much more accustomed “point of transaction”. Uber is a good example here, by the time customers are on-boarded into the app or website they’ve generally already committed to using the service - having passed the research and validate milestones of their journey before the visit.
We needn’t look any further than the sunk cost bias to find out why - individuals tend to continue an action once they’ve invested some time/effort. Meaning brands can build investment through question hierarchy. Rather than blatantly asking users for sensitive information upfront, instead ask for a preferred payment method and then to enable said method, e.g. attaching a PayPal account or scanning their bank card, the value of the ask is then immediately evident.
At the point of transaction
Being asked to “save payment information” at checkout is something we’re accustomed to for a reason - context holds water. For a user at this point in their journey trust and value are an earned asset.
With many payment gateways offering “save my payment information” functionality as native, this is a customer experience that can be achieved with minimal development burden.
Flexible payment methods
Whether Brand or Customer, it’s easy to feel overwhelmed with the selection of payment methods available. Afterpay, PayPal, American Express, ZipMoney, BPAY, the list goes on and with checkout usability studies, observing how much payment methods introduce complexity, it’s easy to see how brands and customers alike can fall into choice paralysis and confusion.
Avoiding confusion at checkout while simultaneously allowing customers to pay with their preferred method can be a tricky line to toe - here are a few considerations to get the ball rolling:
- How do your customers prefer to pay?
- What trends are happening in the market?
- What are your closest competitors doing?
- What is the nature of the promotions you run? E.g. Coupons, discount codes
- Can the payment method be used in-store and online?
- Does the nature of the product offering require more flexible payment options? E.g. Cars
- Does the benefits outway the cost of service?
- Are there any maximum/minimum spends you need to be aware of?
- What does integration look like?
- Does the solution offer security signifiers/guarantees?
- Is internal training required?
- Can the returns processes and policies be accommodated for?
- Are support and documentation readily available for customer service teams?
- Is international trading and multi-currency supported?
- Can a budget for testing, learning and feedback be established? Read our guide to customer satisfaction metrics here
What does success look like?
In short - when you show a known customer a product that they would like to buy - all they need to say (securely) is ‘YES’. At this point, payment, delivery and other shopping preferences kick in auto-magically and get the product to the customer - giving you the same feeling you get when you step out of an Uber and walk away.
If voice or AR/VR based commerce is a part of your brand’s future in any way then having payment and delivery information available to profiles will give you a great head start in producing voice experiences that generate actual revenue over gimmicks and campaigns.
In retail, this is so far from the current everyday experience for most customers, that the brand that gets it right first will have a considerable competitive advantage. Omneo’s profile-centric approach to CX and commerce is a solid foundation on which to build a unified payments strategy.
Resources:
How payments impact subscription metrics
H&M and Klarna extend partnership to offer frictionless checkout in US
3 Onboarding Features to Look For in Your Payment Service Provider
For Returning Users, Overly Strict Password Requirements Can Lead to an 18% Abandonment Rate
Checkout Design: Payment Method Selection
Design perfect UX tasks: the Endowed Progress effect
How One-Click Buying Impacts All Industries
Express checkout adoption strong on mobile as options proliferate
One Click Purchasing: How Click-to-Buy Is Revolutionizing Ecommerce