Here’s a familiar scenario often experienced by the average shopper: You’re congratulating yourself on finding the perfect birthday gift for a friend/partner/offspring at your favorite store. You make your way to the checkout counter, hand over your credit card, and within a couple of seconds, apply your signature to the payment stub with a flourish. The salesperson expresses the hope that you will have a good day, hands over your gift-wrapped package, and you’re already thinking about the next errand on your to-do list.
The payment process, which is usually easy, quick and painless for the shopper, is far more complicated for the retailer. While customers need to wait only a few seconds for their purchase to be approved, they are usually unaware of a hum of activity taking place behind the scenes, involving a journey through several processing stages and a variety of financial entities.
Of course, purchases are not only made in brick-and-mortar stores, they are also conducted online, via tablets or smart phones, and often across borders regardless of the shopping channel or locality, in order to inspire repeated purchases and incur customer loyalty, it is critical for the retailer to create a frictionless shopping experience. The length and efficiency of the back-end payment process have a direct impact on the quality of the consumer’s checkout.
Is a pleasant customer experience enough?
The payment process involves a chain of financial entities including an acquirer and gateway, the customer’s bank, the credit card scheme, and more. When a customer swipes a credit card in-store or plugs in the details online, the payment information is transferred to each financial institution in turn, in order to determine whether the consumer has sufficient funds to complete the transaction. The data has to pass securely through all these financial bodies, each of which charges its own fees, ultimately approving or declining the payment.
While this processing occurs relatively quickly, in order to maintain the fastest and least expensive transaction route, the merchant must ensure that the back-end payment cycle is optimized. There are a number of solutions that leverage the different financial institutions and associated technologies available in order to minimize the transaction fees, friction, and decline rates.
Such payments optimization can very well mean the difference between success and failure in today’s highly competitive retail world. Merchants must proactively integrate or innovate solutions to address the main pain points in the payments process to maximize the value they get out of each payment. This paper will take you through each phase of the payment process, and describe how merchants can achieve the best results each step of the way.
Maximize the back-end for an optimized front-end:
Provide a Branded, Hosted Payment Page
The payment page of every ecommerce website plays a crucial role in bringing the shopping experience to fruition. A payment page that is either too complicated or a departure from the company’s brand can cause buyers to lose trust and abandon their shopping cart at the final stage. When payment for online and native mobile platforms is hosted by the payment platform, all payment data submitted is stored on the payment platform’s secure server. This minimizes the merchant’s responsibility in securing the payment, while ensuring the security and functionality of the payment transaction without taking consumers out of their comfort zones.
By routing the payments stage of the checkout to a white-labeled page, hosted by the company’s payment system, the company can provide a seamless shopping experience, reinforcing its brand and boosting customer loyalty.
Optimize the Experience for Global Consumers
Many retailers have entered the world of cross-border ecommerce. Globalizing one’s offering entails an understanding of international and local payment systems, regional taxes and foreign currency. A number of third-party vendors calculate the costs of taxes, shipping, and currency conversion in real-time, so international customers know the exact price of each item they consider buying.
Another way payment solutions enable optimization is by offering access to networks of regionally-optimized acquirers and locally preferred alternative payment methods. By connecting to international financial institutions when expanding into new global markets, merchants can minimize the expenses of cross-border transacting and, by offering regionally preferred payment methods, make consumers feel comfortable paying no matter where they buy.
By optimizing the consumer experience for international consumers, merchants benefit from a higher cross-border conversion rate and broader reach. The ROI of cross-border integrations often justifies the costs and resources involved in implementing these solutions.
Achieve Better Results with Business Intelligence
Many solutions can be integrated with one’s payment system to provide active monitoring, collecting information, and real-time transaction analysis as payments are processed. This monitoring enables merchants to make business decisions based on actionable insights about their third-party integrations, including their financial institutions. With this intelligence, merchants can evaluate the efficiency of their payment options from the aspect of returns, decline rates, and other criteria.
With this insight, merchants can improve their understanding of customer behavior, including preferred payment methods and checkout deterrents, and provide better options according to these findings to cater to customer preferences.
Secure the Consumer Experience and Prevent Fraud
Loyal customers can be easily turned away by the threat of fraud. If a business does not exude a sense of security of rails to protect consumer data from fraudsters, the results can be detrimental. Merchants must, therefore, carefully choose fraud detection and prevention tools that comply with industry standards and regulations and which have a good track record of preventing issues like chargebacks and data breaches.
Security enables merchants to avoid the expense of a chargeback and the more worrisome prospect of a negative brand perception, by catching fraud early.
Better solutions. Better results
Retailers are constantly seeking ways to cut costs and improve customer experiences and revenues, implementing the right technology solutions is critical to this optimization. From global payment solutions to data systems and fraud protection and prevention technology, integrations enable merchants to improve overall customer experiences and internal operations, benefitting from insight into customer journeys, positive brand perception, and operational efficiency.
Oren Levy is CEO of Zooz,