For an ecommerce business to grow and maintain a constant stream of revenue, it must learn how to increase conversions. One of the best ways to do this is to optimize the payment experience.
By optimizing the payment experience and making it smooth and secure for customers, you can increase the likelihood of transactions being successful. For this reason, even the smallest of changes to the payment process can impact a business’s bottom line. Therefore, we need to know what changes to make in order for these effects to be positive and substantial.
To understand the approach to take for increasing conversions, we can split the payment experience into three key pillars: Checkout and initiation, authentication and fraud management, and authorization and remittance.
With this in mind, let’s look at each of the pillars and explore the best way to increase conversions.
Checkout and Initiation
The rise and maturity of online and mobile sales channels, alongside an increasingly sophisticated ecosystem of connected devices and apps, has made the customer checkout experience more complex than ever. Creating and maintaining a high-performing user experience that is consistent across this constantly evolving set of channels is not easy. Success requires a sound understanding of different technologies, market trends and customer habits.
The user experience (UX) is the key to preventing shoppers dropping off. Merchants must design and optimize checkout pages so that customers can easily input the minimum necessary amount of information. To achieve this, ecommerce businesses should employ tokenization so customers don’t have to repeatedly fill in the same fields over many visits.
What’s more, it is crucial that retailers offer a range of tailored payment options in every region, so customers can pay with their preferred method and currency.
Authentication & Fraud Management
Fraud has a direct impact on conversion rate, and it comes in many forms. To effectively combat fraud, it’s important for ecommerce businesses to find the right balance between security and conversion. Implementing the strictest controls will reduce fraud rates significantly but could create a corresponding increase in false positives. If genuine buyers are denied, this results in lost revenue and discourages customers from making future purchases.
The keys to focus on here are developing a clear picture of fraud analytics and optimizing fraud controls. New tools that incorporate artificial intelligence and machine learning can improve the accuracy of fraud decisions and lead to greater conversions.
Authorization and Remittance
Merchants need acquiring strategies and technical approaches for working with different parties in the payment ecosystem to approve and settle transactions. This becomes particularly challenging when expanding into international markets, which means merchants are subject to the unique domestic requirements for processing payments.
There are numerous ways to approach this, including setting up a local legal entity to process transactions domestically, and partnering with a PSP that has connections with multiple local card acquirers. Navigating the local idiosyncrasies of authorization decisions involves constant monitoring and optimization; in some cases, it may be beneficial to route failed transactions to a secondary backup acquirer for a retry. With the right technology partners, automatic re-routing can increase authorization with virtually no impact on the customer experience.
A three-step process to improving the payment experience
Successfully improving the payment experience at your ecommerce business, and in turn increase conversions, requires a three-step approach. First, diagnose by analysing data points across the payment experience to understand what is helping and what is hindering conversions. Next, set measurable objectives and thoroughly test different potential solutions to improve the payment experience. And finally, monitor by organizing reviews to continually maintain and improve KPIs.
Nick Tubb is Vice President, Commercial Affairs for Ingenico ePayments