Woman with smartphone and credit card
Payment & delivery Optimizing the checkout process
A smooth checkout process reduces the amount of times customers abandon a shopping basket, and contributes a lot to customer satisfaction. At first glance, it doesn’t seem to be too complicated to provide this, but in practice, it actually isn’t that easy. Find out in this blog what new trends and what proven practices you should bear in mind during the checkout process.
Service provider vs integrated payment
When it comes to payment in online shops, the world of e-commerce has divided opinions. On the one hand, there are small and medium-sized shops that rely on the service of their payment service provider: depending on the payment method required, the checkout switches to external sites. This usually works smoothly. But this means the customers leave the shop’s page, and individual functions are not always available
On the other hand, there are the large online shops of well-known brands. These shops haven’t given up control over the payment process, but have integrated it into their own websites, meaning visitors never leave the shop. This ensures customers take in the whole shopping experience, right through to payment processing, as a consistent brand experience. However, this model is slightly costlier due to programming. In other words, the route chosen primarily depends on their budget, and how important they consider their own brand experience to be.
This is where the retailer can leave a lasting impression, and further boost the brand experience in the process. For instance, additional services such as track and trace can often be integrated into the checkout process. A survey of 12,000 respondents conducted by the Swiss e-commerce trend indicator revealed online track and trace to be the most important delivery option. This was chosen by up to 85% of respondents, depending on the age category, closely followed by advance notice of receipt of consignments (79%). Dispatch control using online services (67%) was also an essential aspect for many of the respondents. Delivery services make it easier for customers to receive orders, which in turn increases their satisfaction. Delivery options are available from Swiss Post as an application programming interface or as online services, and involve no additional costs whatsoever for the retailer.
Bear hygiene in mind!
So much has been written about the checkout process, so here we will just remind you of two key aspects. These are often known as “hygiene factors” in online retail. The payment process in online shops needs to be as smooth and efficient as possible. For one thing, data entry should be limited to the bare essentials. For another, filling in information should be something that’s easy to do on desktops and mobile devices alike.
In everyday life, for instance when commuting, it can be very inconvenient and time-consuming to take out your credit card to enter your card details. One-click payments are handy here: after the first transaction, card details can, in many places, be stored with the online retailer. This saves the customer the inconvenience of having to enter their details again for future purchases. This service makes the checkout process shorter, which increases the conversion rate and, in turn, reduces the amount of times customers abandon a basket.
In order to further reduce this rate, “order as guest” should always be an available option as well. In other words, it’s not a good idea for the customer to have to open a user account during the order process.
Payment orchestration and preferences
In Switzerland, there are several payment methods that are used frequently by online buyers. According to the e-commerce trend indicator, paying by credit card and paying by invoice are the most popular payment methods. 74% of respondents said they preferred these options. The TWINT mobile application is gaining in popularity. While 40% of respondents said they preferred this payment method in 2021, the figure already stands at 48% today. The remaining two methods to make the top five were PayPal (31%) and the PostFinance debit card (29%). Prepayment (19%) and payment upon collection (16%) were also popular payment methods. Depending on your target group, it may be worthwhile considering alternative payment methods such as Apple Pay, Google Pay or bitcoin in order to offer your customers more flexibility when paying.
In other words, the key is to provide a broad range of payment methods so that you appeal to everyone, and so you avoid the potential risk of people just abandoning their shopping basket. For larger companies in the retail sector, this increases complexity if omnichannel strategies are to be taken into account as well with regard to settlement and reconciliation. To ensure that connection to a payment service provider does not become a limiting factor when it comes to expanding into new markets, it may be a good idea to think about payment orchestration, or to consult an expert. After all, payments also include processes for fraud prevention and creditworthiness assessment. The fewer interfaces and external systems used, the better.
Allow mobile and flexible payments
Over the past few years, two topics have become very prominent in the area of payment that impact on payments both at the POS and in online shops.
Mobile payments using digital wallet apps are becoming increasingly popular. TWINT is the most popular example here, and is already accepted by the majority of retailers in Switzerland. But Google Pay and Apple Pay (and similar) have also captured a lot of market share in recent times. If you embed a button for TWINT, GPay, PayPal, etc. in your online shop, you save your customers a lot of effort seeing as all master data can be selected with just a few clicks of the mouse or taps of the finger.
The second major trend is the desire for flexible payment methods. The term for this trend towards instalment payment and payment later is simply known as “buy now, pay later” (BNPL). From a purely technical point of view, a later payment is now nothing more than a purchase on account, but that doesn’t sound very nice. The Swedish fintech Klarna is certainly the best-known representative of the BNPL model, and PayPal is now emulating them. By using both services in their online shop, retailers can offer payment methods involving risks they would not have wanted to take themselves.
And this shows that on the face of it, paying in an online shop seems to be a simple matter. However: details can be critical to the success or failure of the checkout process.