How Personalized Payment Experiences Help Reduce E-commerce Cart Abandonment Rate

Retail & Ecommerce September 12 2023

Is a Poor Payment Experience Making All Those Digital Carts Disappear Into Oblivion?

We’ve all been there – painstakingly searching for products on an e-commerce platform, excitedly adding newly discovered or previously wish-listed items to our carts, all set and ready to quickly place the order, only to be faced with a cumbersome checkout process with unclear payment flow that quickly dampened the shopping spirit. Nobody likes hitting a roadblock on their journey to buy those must-haves. In the world of e-commerce, the effort customers have to put into making a payment can significantly impact the overall shopping experience. Businesses can reduce this customer effort and create seamless payment journeys that smoothly guide shoppers through the final checkout for an assured conversion.

Let’s explore why and how e-commerce retailers are stepping up the payment experiences to make the shopping journey smoother and more delightful by offering a variety of payment options and enabling ease of use in a secure manner to lead to a higher shopping cart conversion ratio and increased customer lifetime value as happy customers always return for more.

Cart Abandonment Due to Poor Payment Experience in E-commerce

As per the Baymard Institute, the average shopping cart abandonment rate during checkout is above 70%. And, more than half of this can be attributed to a bad experience in the payment phase of the checkout process. Poor payment experience is an outcome of non-availability of customer’s preferred payment method, never-ending payment forms or screens, forced account creation, failed transactions, and unexpectedly high costs added during checkout. It not only leads to an individual cart being abandoned, but can cause complete churn, seriously impacting the customer lifetime value and total revenue.

Some of the top reasons for shopping cart abandonment that emanate from a poor payment experience are:

  • Preferred payment method is not supported or not easy to find
  • Forcing the buyer to create an account during payment
  • Unexpectedly high costs added during checkout like shipping and taxes
  • No or incomplete visibility of transaction charges during payment mode selection
  • Lack of trust in the website or app for sharing credit card or wallet info
  • Frequent failed transaction due to timeout or payment authorization issues
  • Unclear, complicated payment process and inconsistent user interface

To find out how we are helping a niche e-commerce player in the US save significant dollars in annual transaction costs with unified, secure payments

Investing in Payment Experience for Smoother Payments and Happier Customers

Millions of buyers opt for online shopping daily. Seamless checkout experiences are fundamental to cart conversions and completed transactions. By adopting a customer-centric approach, embracing emerging technologies, streamlining user experiences, ensuring robust security, and offering responsive customer support, e-commerce companies can create a payment process that instills trust in the buyer.

Personalized, Customer-Centric Approach

At the heart of seamless customer experience, lies a deep understanding of customer preferences. Customers have their own preference to make payment on basis of their location, income, last successful payment mode, type & cost of product purchased, even age, and more. By offering preferred payment methods that resonate with individual shoppers, online stores can offer a personalized range of options to truly delight customers. Tailoring the payment experience to match individual customer profiles creates a sense of familiarity, building engagement and loyalty. From credit/debit cards to digital wallets and innovative buy-now-pay-later options, a diverse array of payment choices ensures that customers can transact using their method of choice.

Enabling Ease of Use and Seamless Experience

Only a constant focus on simplifying the user experience with guided, personalized workflows will keep today’s customers engaged from discovering products right through to checkout. On mobile devices this is even more important as a vast majority of carts are left behind on mobile devices. Responsive design with tap-friendly forms and intuitive buttons with accessibility features set a good app apart from a great app. A consistent user interface, where the screens look alike across the product catalog, shopping carts and, checkout helps assure the customer about the authenticity of the site or app. Consistent UI and enhanced usability, when combined with quick process flows benefit not only the customers but also help reduce cart abandonment.

Keeping Up With Emerging Tech Trends

Keeping up with payment trends is crucial; the ability to seamlessly integrate new payment modes can be a game-changer in enhancing customer experience and driving conversions. This is especially true of digital commerce, as also noted in a global consumer payments survey from 2022—20% of respondents use one or more next-gen methods for e-commerce, especially for smaller purchases. Staying relevant in the digital age means embracing emerging technologies that are redefining the online shopping commerce landscape everyday. The ability to integrate innovative methods beyond wallets, mobile payments, QR codes, and contactless transactions, as well as include future-enabled options like Crypto, Account-to-Account, Machine-to-Machine, and Biometric payments is also key. Trusted e-commerce brands offer customers a variety of secure and efficient ways to complete their purchases.

[Also Read: AI to Serve Up Success at Quick Service Restaurants]

Friction-Free Experience

A frictionless payment experience is crucial to customer satisfaction. Reducing the total customer effort for payment involves subtracting unnecessary steps, minimizing forms, and simplifying the overall journey. By simply remembering the last payment mode chosen, the time to complete payment can be significantly reduced. By offering a guest checkout option, you can eliminate barriers for first-time customers, enabling them to complete their transactions swiftly. Consistent, friction-free user experience not only boosts conversion rates but also contributes to creating a positive perception of the brand.

Prioritizing Security and Fraud Prevention

While simplicity is essential, security is non-negotiable. Customers are wary of sharing confidential financial details like card number, bank account number as fraud transactions are rampant in e-commerce platforms. Compliance with international standards like PCI DSS, implementing multi-factor authentication, NFT (Non-Fungible Tokens), Voice & Face recognition are important ways to gain customers trust in the payment process.

In parallel to ensuring the security of the platform, network and apps, implementing stringent fraud detection and prevention measures based on customer behavior also plays a key role in building customer trust and loyalty. Robust AI ML solutions can flag potentially fraudulent activities by studying anomalies in transactions. This can then be integrated with a responsive customer support process to take prompt preventive or corrective action.

Prompt and Effective Customer Support

Clear communication throughout the payment process is vital. Providing transparent information about payment methods, charges, and refund policies prevents confusion and fosters trust. In cases where issues arise, such as a suspicious card swipe, having a responsive customer support system in place to address and resolve payment-related concerns swiftly is a must to drive up customer satisfaction.

Helping Our Customers Design Good Payment Experiences for Their Customers

Payment is the last mile in a customer’s buying journey but is often overlooked when evaluating opportunities to enhance customer experience. The smallest design flaw at this stage could potentially render the total effort, exerted in leading a customer from awareness to this final conversion stage of the buying process, to waste.

Rysun’s services and solutions for e-commerce payments center around enabling friction-free, secure, and personalized payment journeys. Key areas of impact include:

  • Making preferred payment methods available
  • Significantly reduce customer effort score or CES during checkout
  • Ensuring the mobile experience is fully optimized
  • Adding finance options like Easy EMIs, BNPL (Buy Now, Pay Later)
  • Trusted payments with secure and integrated payment platforms
  • Tracking of subscription payments, cancellations, returns, and refunds
  • Improved payment authorization rate with robust tech infrastructure
  • Value-added solutions like payment confirmation and reconciliation
  • Effective fraud management strategies, with insightful customer support

Rysun understands that personalized e-commerce payment experiences can improve the conversion rate and customer experience, resulting in increased Customer Lifetime Value. For us payment is not a mere back-office task but has several opportunities for optimization to enrich a customer’s engagement with an e-commerce platform.

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