Thurs May 31 2018
Ecommerce retailers can’t afford to create any unnecessary friction at the checkout or they risk damaging the customer experience and potentially causing shoppers to abandon their purchase altogether.
Research shows that UK shoppers abandon online shopping baskets worth an average of £29.37 every month, so this should be a high priority for all retailers1.
A new white paper from Barclaycard investigates the ways in which a payment gateway can help reduce abandonment by improving the customer experience at the checkout.
Based on interviews with ecommerce experts and data from numerous user experience studies, the white paper shows that payments should be a priority for retailers that want to optimise their online checkout journey.
In this article we’ll take a quick look at one of the areas investigated in more detail in the white paper – how the right payment gateway can speed up the checkout for returning customers.
Research shows that retailers can reduce basket abandonment by making sure their checkout process is quick and convenient for shoppers. For example, in 2017 Barclays published research which looked at how retailers can encourage more visitors to actually buy something. When asked what would motivate them to return to an online store and purchase items they had saved in a wishlist, 12% of respondents said ‘saved payment details’.
In separate research, SME retailers in the UK estimated that one in 10 online shoppers will abandon a transaction due to the lack of a one-click payment option.
Payment gateways can reduce friction at the checkout and reduce abandonment by enabling returning customers to pay without re-entering their credit card details, making the process quicker and easier.
According to Ben Stagg, Sales Director at Barclaycard Payment Solutions: “If you take away the barriers to spending, it takes away the excuses for not making a purchase and can improve conversion rates.
“As an example, one of the reasons that Amazon has been so incredibly successful is because after you’ve logged in the first time, you can then buy things with a single click. If you add steps to that buying journey, which are typically caused by not having an omnichannel or tokenised approach, you’re creating opportunities for people to reconsider or feel guilty about that purchase.”
Most online shoppers are familiar with Amazon’s 1-Click checkout and can become frustrated when asked to spend time filling out payment details on other sites.
In fact, Amazon’s 1-Click model is so valuable to the company that it patented the idea in 1999. The patent expired in 2017, but one estimate suggests that the added convenience of the 1-Click checkout increased Amazon’s conversion rates by 5%, valuing the patent at $2.4 billion annually.
Payment gateways use a process called tokenisation to speed up the checkout for returning customers.
It works by swapping a customer’s card details for a random and anonymised number, known as a ‘token’. This token is then used in place of the card details to process the transaction by passing it along to each different party involved in authorising the payment.
If the shopper gives their permission, the payment gateway then securely stores their credit or debit card details on behalf of the retailer (the retailer never sees the customer’s card details), meaning the shopper can check out in future without having to re-enter their card details. They need only enter the CVV number on the back of the card to confirm payment.
Returning customers already convert at a higher rate than new visitors, have a higher average order value, and are more likely to recommend the brand to their friends2. So it makes sense for retailers to ensure they are partnering with a payment gateway provider that can offer returning customers the best possible shopping experience.
Download Barclaycard’s new whitepaper to find out how payment gateways can enhance the retail customer experience.
Did you know that the right payment gateway can improve your online customer experience and increase conversions?
Download our latest white paper to find out more.