Conversion rate for payments is the ratio between the number of payment requests and successful payment authorisations. Recent research by Ingenico Payment Services has revealed that 20% of payment requests are not completed.
Transactions can fail for several reasons:
Consumer drop-off – could be due to lack of trust and confidence, the process may be too long and complicated or the preferred payment method may not be available
Transactions are not accepted by the acquirer – could be insufficient funds, failure to authenticate
Transactions are rejected by the merchant – blocked by fraud prevention measures, blacklists…
What can merchants do to reduce card abandonment?
1. More trust, more conversion
In the short term, there are some things merchants can do to build consumer confidence. These include a secure https url, having recognised and trusted logos, trust marks, clear pricing information and having payment pages that reflect the look and feel of the merchant’s brand.
2. Less clicks, more conversion
A smooth checkout for online and mobile payments to merchants is equally as important as creating trust. For example, one-page checkout and one-click shopping experience are great practices, made possible by using tokenisation. Tokenisation allows merchants not to store credit card numbers for future transactions. To achieve this, sensitive card data is replaced by tokens which are saved and used instead. According to ComScore (2015)[i], 51 percent of online buyers would greatly value this form of convenience.
With the increase of m-commerce, a great consumer experience also requires a mobile payment strategy. Whether a mobile website or a mobile app is preferred, conversion will be boosted by the use of payment pages adapted for mobile devices.
3. Think global, act local
When asked what information or options were the most important during the checkout, 67 percent of respondents in a ComScore[ii] survey stated that a variety of payment options in addition to credit cards would be most important to them. As cross-border payments are increasing, it is important to take into account local factors: use of local languages, local currencies and local payment methods. In a number of countries credit card payments are not the ‘norm’. For example, in Germany or the Netherlands, direct debit payments and online banking transfers are far more frequently used. Ingenico Payment Services research shows that 59 % of online shoppers have abandoned a purchase when their preferred payment option has not been offered.
Not everybody uses credit cards.