Nowadays, most businesses have gone fully digital.
That doesn't just mean they operate in the online world but also operate electronically. Simply put, online transactions have become quite popular and businesses must be able to adequately handle any means of electronic payments.
The fact of the matter is that it's about providing convenience to customers, and consumers these days find online shopping more convenient. This trend has given birth to various payment methods. Today, credit or debit cards are most commonly used for electronic payments but other methods, such as APMs (Alternative Payment Methods) that don't include card payments, have grown in both popularity and in usage across the ecommerce world.
As a matter of fact, it's estimated that APMs will encompass 55% of all global ecommerce payments in 2019. But why are payment methods important for a company's conversion rate? As mentioned before, it's about convenience. Therefore, here's how payment methods can have an impact on your conversion rates.
The link between conversions and payment methods
Nowadays, businesses that operate online, whether they are commerce companies or some other business types, must ensure a seamless customer experience. Being able to meet customer needs, demands and expectations plays a vital role in a company's success in the market. Therefore, when talking about payment methods, the focus is on meeting customers' needs.
For instance, when customers finally reach your checkout page, payment options available there can make or break the sale. It is a link that determines if a customer will proceed through the checkout or abandon their transaction or their shopping cart. But why is that?
As a matter of fact, cart abandonment rate across various industries is 74.2% on a global scale. There are various reasons for abandoned carts, with one of them being lack of payment options. That being said, if consumers don't see their preferred payment option on your checkout page, they simply won't proceed to the purchase.
Available payment methods
Today, there are over 200 payment methods that can be implemented by companies that handle electronic payments and online transactions. For example, some APMs include bank transfers, e-invoices, direct debit, digital currencies, digital wallets and so on. With that in mind, consumers usually have only one or perhaps two preferred payment methods.
In other words, you don't have to implement every method out there to ensure your customers will actually make a purchase. Instead, you must implement methods that your customers are most commonly using.
What's more, some payment methods can be encompassed into a single solution, such as an ACH payment for instance. That way, every customer’s preferred method of payment that goes through an Automated Clearing House (ACH) network, such as direct deposit, peer-to-peer transaction, bill deposit and so on, can be integrated into a single payment solution.
Implementing multiple payment options
As mentioned before, you don't have to have every payment method available on your checkout process. Instead, you should conduct some research to determine the most commonly used or preferred payment methods for the market or a country you're targeting. That way, you can implement only the most relevant payment options for your business.
The main reason this is important is that you can improve your conversion rate by implementing more payment methods preferred by your customers. In fact, having the top three most-used-by-customers payment options available can boost your sales up to 71%.
In other words, multiple payment methods are important to your customers and to their customer experience, as well as overall satisfaction. By implementing the right payment methods, you can not only provide convenience to customers but also avoid cart abandonment and ensure your customers actually complete their purchases.
Optimizing your checkout page
Just because you've implemented multiple payment options, doesn't necessarily mean your customers will go through with the purchase. Multiple payment options play a huge role in encouraging customers to buy but your checkout page must also be properly optimized, in order to seal the deal or close the sale. As mentioned before, there are a number of reasons why consumers will abandon their shopping carts. For instance, some reasons include:
- Extra-high additional costs, 55%.
- Being forced to create an account, 34%.
- Complicated and too long checkout process, 26%.
- Lack of security, 17%.
- Website errors, 17%.
With that in mind, optimizing your checkout process should be a priority aside from implementing multiple payment options. Therefore, ensure your website is fast and functional, as well as responsive for mobile users. Also, don't bother customers with unnecessary account creations and difficult checkout processes. Most importantly, implement proper security so that your customers feel safe when providing their sensitive information on your website.
Payment options provide consumers with convenience and seamless experience when it comes to shopping online. Businesses that are able to provide proper payment options to their customers will be able to build trust with their consumers and ensure that customers will not just make a purchase but also come back for repeat business.