Paying in shops – today and tomorrow

One of the most common interruption points in the online shopping experience is the payment process. Even at the checkout, it is important to meet customers’ needs. Customer requirements are changing, and new trends in digital commerce are altering the payment process.

In the past, customers’ payment habits changed only very gradually. The smartphone, however, has also left its mark on the payment process, as a driving force behind change. 

Invoice no longer top of the list

For a long time, purchasing by invoice was at the very top of the list of payment processes preferred and used by customers. But, for the first time, that has changed in recent years. Payment by smartphone has clearly gained momentum. Some 23% of Swiss consumers already prefer paying via their smartphone. In 2016, this figure was only 6%. This observed shift is primarily to the detriment of payment by invoice (85% in 2016, falling to 75% in 2019). Paying via TWINT is becoming more and more popular and is the preferred option for 17% of shoppers.

Mobile first, even when paying

Purchases are increasingly made via smartphone. 83% of Swiss consumers declare that they shop using a mobile device. For retailers, this means optimizing the entire shopping experience for mobile devices, including the payment process (source: Statista).

Payment process leads to numerous abandonments

One of the main reasons for abandoning a purchase is the lack of a payment option that the customer wishes to use. Customers would thus appear to display little flexibility when it comes to their choice of payment methods. This applies in particular to customers who prefer paying by invoice. If payment by invoice is not an option, the order is not placed. To avoid losing customers unnecessarily at the checkout, it makes sense to offer a range of relevant payment methods. However, retailers must weigh up the economic pros and cons of this. A basic fee is usually charged for each payment method, so a wide range of payment processes is accompanied by corresponding costs.

Looking to the future

Last autumn, Zalando launched a trial in which the ordering and payment processes are completely separate. The customer orders without indicating a payment method. Payment is made only when the customer knows which items they will actually keep. They are then charged for only these products. This system has a twofold advantage. The order is not abandoned at the payment stage, and there are fewer transactions. This type of service is particularly practical if a high rate of returns is to be expected.

Technological drivers are changing the payment process

The payment process will continue to change. Pulling your credit card out when shopping online is anything but easy. The introduction of new devices and technologies will affect payment habits and create a continuous shopping experience. The increased use of voice assistants (which we might use to dictate our weekly shopping list) will also change our habits. It is hard to imagine that customers will share their credit card number with their voice assistant. Many other things in our environment are becoming smarter, too. Our cars and office devices will soon be able to order goods on their own. Here again, debit and credit cards will prove incompatible, or will at least be pushed into the background.

As a result of these developments, it is obvious that platforms will play an increasingly important role even in the payment process. This change will also continue to alter how we pay in traditional online shops. Developments that retailers should bear in mind.