Get tips on how to boost your ecommerce revenue from payments experts Edgar, Dunn & Co.
The world is increasingly digital, and mobile.
In fact, some 5 billion people (more than half the world’s population) now view the internet on a mobile device.
By next year, the value of mobile payments worldwide will surpass $1 trillion.
For merchants, that means optimizing the design and function of a payments page and streamlining the entire payments process is even more important.
Following the best practices of companies like Amazon and Uber, payment should be ultra-convenient and intuitive.
Is your checkout process nearly invisible? Does it involve just one click? Is it country-specific and designed to keep costs down?
Consumers often abandon purchases if the payment process is cumbersome, or if their preferred payment methods aren't available. Here are five ways to prevent that from happening, according to payments experts Edgar, Dunn & Co.:
Optimize the mobile payment experience to increase checkout conversion
Localize payment methods to unlock new customer segments
Implement a global acquiring strategy with a local approach
Leverage payment data insights to increase conversion rates and reduce acceptance costs
Use an intelligent, data-based approach to minimize risk and maximize revenue
1: Optimizing payments for mobile
With the significant growth in mobile commerce, optimizing payment page design is critical.
In fact, Adyen research suggests that consumers are more comfortable spending higher amounts on larger devices.
This means merchants should offer a dedicated interface for each type of device, so that consumers don’t struggle to see, for example, the whole range of payment options on a smartphone.
2: Credit cards aren’t the only way to pay
Outside of North America, credit cards like Visa, Mastercard and Amex are not the most prevalent payment methods.
For example: according to Adyen data, in China only 1% of shoppers pay with international credit cards; and in Germany less than 25% of shoppers use credit cards for online purchases.
Considering this, it is increasingly important for merchants to offer more ways to pay, especially if they want to appeal to a global market.
In the chart below, you can see which local payment methods account for the highest percentage of transactions in each country.
3: Go local with acquiring
A few of the many benefits of a local, country-specific acquiring approach: higher card authorization rates, lower interchange and scheme fees, and faster merchant settlement.
Most global merchants will end up with some combination of local and international (or cross-border) acquiring, but adopting local acquiring approach nearly always has a positive impact on authorization rates.
Though this varies by market, a merchant will typically see as much as 0.5-0.6% in uplift after transitioning from cross-border to local acquiring.
4: Increase conversions, reduce acceptance costs
Payment data is a valuable tool to increase revenue and reduce costs, and merchants should use the analytics and insights drawn from it to their advantage.
On average, 5-15% of ecommerce credit card transactions are declined by issuing banks, and of those declines, 25% lack valid reasons, usually due to old and inefficient systems.
But a good payment partner can reduce the number of declines by optimizing the data submitted, suggesting corrective changes to the issuer, or identifying a better routing for a given transaction.
5: Use data to battle fraud, maximize profit
The growth of ecommerce also comes with the threat of fraud. To minimize fraud losses, online merchants are working with various forms of risk management to block fraudulent transactions.
But many of these systems, especially the more conservative ones, are also blocking genuine transactions.
This prevents legitimate shoppers from checking out and yields a net loss in revenue (the so-called “false positive” problem).
Risk management is both a science and an art, and it is important for merchants to find the right balance between security and conversion.
Below, you can see the impact from Adyen's RevenueProtect product on an actual Adyen merchant.
Read next: How to optimize online payments