According to research conducted by the Baymard Institute, up to 70% of shopping carts in online stores are abandoned, with two out of five adult respondents stating that complex payment processes are the main reason for abandoning purchases. As e-commerce continues to develop, the online payment journey becomes more fragmented and consumer expectations for a digital experience evolve. However, the situation is starting to change – the payment ecosystem is seeking to address these challenges through collaboration, innovation, and improved user experience.
In the face of digital shopping transformation, four main trends emerge:
1. The growing popularity of online shopping, driven by consumer demand for speed and convenience.
2. Inconsistent digital experiences throughout the e-commerce ecosystem, due to the diversity of online stores and consumers making purchases using different devices and browsers.
3. Multiple alternatives to traditional payment methods, including popular digital wallets, leading to numerous online payment options such as instant A2A methods, domestic and global wallets, “Buy Now, Pay Later” solutions, or browser autofill.
4. Consumer concerns about the security of sharing payment data and interacting with an increasing number of partners.
In today’s digital world, customers expect the same efficiency and convenience in online payment processes as contactless technology has successfully brought to in-store purchases. The current division of the online payment process leads to:
1. 62% of customers abandoning purchases after two minutes, while the average order completion time is three minutes (Source: Baymard Institute).
2. 54% of consumers who will abandon a purchase if they perceive the payment as unsafe (Source: European E-commerce Report).
3. 54% of consumers will abandon a shopping cart if a company requires too much information (Source: Capterra).
It is primarily the merchants who feel the consequences of customers abandoning shopping carts due to high friction, inadequate offerings, or security concerns. Customers are increasingly seeking flexible payment options, choice, control, and a simplified payment process, all based on principles of security, protection, and convenience.
Baymard Institute research has also shown that improving the payment process can increase conversion rates by as much as 35%, for example, by implementing an integrated digital payment solution.
Benefits of Using Integrated Digital Payment Solutions
Advanced payment technologies, such as Mastercard Click to Pay, are revolutionizing the landscape of digital payments. They offer integrated, secure, and password-free payment solutions, bringing the same levels of security, simplicity, and speed to e-commerce that contactless technology has successfully achieved in the physical world. Such solutions benefit not only consumers but also merchants, who can reduce shopping cart abandonment and increase loyalty to issuing cards.
For customers, integrated digital payment solutions offer guest payments that are facilitated by intelligent recognition, advanced security, and a seamless user experience. They can centrally manage preferred cards in a single profile that is accessible across all devices, browsers, and channels. The solution is also supported by issuers, who enable customers to enroll through online banking, eliminating the need for manually entering and saving card data for each merchant or remembering passwords, streamlining the payment process.
Furthermore, introducing biometric capabilities for additional security and speed allows customers to create and use payment access keys for smooth authentication during the payment process. Access keys replace passwords using biometrics, which are linked to payment data and supported by the latest security standards. Customers only need to set up their payment access key once using a familiar method, such as fingerprint scanning or facial recognition, which is verified by the bank. The payment process becomes seamless at any store, regardless of the customer’s chosen payment method.
For merchants, integrated digital payment solutions enable the use of enhanced and more dynamic payment processes for their customers. Integrated payment solutions seamlessly integrate into the merchant’s website, increasing the efficiency of the existing payment process and reducing shopping cart abandonment. Advanced payment technologies can also help increase payment acceptance and reduce the risk of fraud, as each transaction is secured through tokenization. This not only improves conversion but also makes customers feel protected and valued.
For issuers, integrated digital payment solutions introduce seamless and familiar guest payments that enable access to issuing cards for their customers. With customer intelligence, it is possible to access card data without a password, eliminating the need for manual entry, and the introduction of tokenization significantly improves payment acceptance rates, simultaneously reducing transaction declines and disputes.
Halving the Payment Process Time – an Application Example
Integrated digital payment solutions offer seamless and familiar guest payments directly on the store’s website, allowing all cards to be managed in one secure profile. Technologies such as Mastercard Click to Pay or Secure Card on File work seamlessly integrated into the payment process, creating a better experience for consumers with fewer interrupted payments and clicks. With access keys, users simply use their biometrics to authenticate the payment, and all cards can be managed in one secure profile that updates automatically. This approach streamlines the payment process for customers and makes it more user-friendly.
Last year, NatWest Group became the first UK bank to introduce Click to Pay for all its customers, making online shopping safer and easier, allowing customers to directly link their cards to the Click to Pay feature, resulting in a safer and more secure online payment process. We have also recently worked with Norwegian Air Shuttle (NAS), a Norwegian airline, to improve the quality of the online flight booking process by implementing Click to Pay through the Mastercard payment gateway in 12 different markets.
As a result, the payment process time was reduced by over half compared to the standard guest payment model. Research results have shown significant changes in consumer behavior and interest in switching to this new service, with 20% of successful card payments being the result of using Click to Pay, bringing a 3% increase in payment acceptance rates.
Security as an Innovation Priority
Fraud has been one of the major concerns associated with the widespread transition to digital banking and e-commerce. Statistical data presented by Statista shows that since 2014, fraud in card transactions has been growing at an average annual rate of 8.9% and is projected to reach a value of $91 billion by 2028. Integrated digital payment solutions can protect customers, merchants, and issuers from risks and fraud by combining EMVCo Secure Remote Commerce payment standards, network tokenization, and biometric authentication. This provides an additional layer of security by adding a dynamic component to each transaction, thus protecting sensitive personal data.
FAQ
1. Why are so many shopping carts abandoned in online stores?
According to research by the Baymard Institute, up to 70% of shopping carts in online stores are abandoned. Two out of five
The source of the article is from the blog elektrischnederland.nl