To attract customers to their e-commerce site, merchants must meet ever higher and constantly evolving consumer demands: contactless payment, real time and payment facilities are strong competitive advantages. Having the latest payment solutions and adapting to the local habits of its customers is therefore essential.
The pandemic has also accelerated the development of solutions intended to offer more flexibility depending on the budgets of each individual, whatever the purchase in question (necessity, for pleasure, unforeseen) and the consumer universe (travel, automotive, furniture, etc.)
The boom in Buy Now Pay Later (BNPL)and split payments
More and more merchants are offering their customers deferred payment, a payment facility to meet several needs: pay later, spreading out payments, financing large purchases, etc.
One in three UK consumers use this payment facility more than before, and it now has a 5% market share in that country. In Australia it is 10% and in Germany 18%.
Another popular payment facility is instalments or split payments. According to the OpinionWay study “The French and means of payment” conducted in June 2020, 78% of customers are willing to change brands in order to be able to pay in several instalments. And whatever their socio-professional category, 30% of customers use this payment method at least every two to three months.
Split payments are therefore a real lever against shopping cart abandonment. By offering it, merchants are betting on optimising their conversion rate and increasing their average purchase value.
Tokenisation rhymes with zero friction payment modes
Tokenisation consists of replacing the 16 characters of a bank card (the PAN, Primary Account Number) by an encrypted, non-sensitive code that will allow the card to be identified for future use. The benefits are numerous: reducing the steps in the payment process, strengthening data security and building customer loyalty. There are many uses of tokenisation for the benefit of merchants and ultimately their customers.
It allows a merchant to offer its customer the possibility of saving their card data for their future purchases. The card information is fully secured and managed by the PSP. When they return to the website, the customer will only have to click on the “pay” button to pay for their purchase in the blink of an eye.
This functionality allows the data of enrolled cards to be updated in real time, when they expire. It is a secure electronic exchange of updated account information between payment card issuers and e-merchants. It is a real plus towards a frictionless customer journey since this mechanism makes it possible to extend the life of the card, without asking again for the customer’s agreement. Merchants who offer a subscription pricing model will see this as a real additional performance lever.
Click to pay
Tokenisation managed on the scheme side will come to the fore by 2022 in Europe. Visa, Mastercard, American Express, among others, are joining forces to enrich the one-click payment experience. Click to pay is a wallet which will be available right from the payment form and bring together all the customer’s bank cards in one place. The functionality is based on the EMV Secure Remote Commerce (SRC) standard.
Offer the preferred payment methods in each country… but don’t risk complicating the purchasing process!
Europe is your playground? Although card payment remains the preferred payment method in this market, offering alternatives can help boost your conversion. Each country is different: bill payments in Germany, bank transfers like iDeal in the Netherlands or Sofort in Germany or even Multibanco ATMs in Portugal. Study you customers’ consumption habits to offer them the payment methods and facilities they prefer.
On the other hand, offering a multitude of payment methods risks unnecessarily complicating the purchasing process. Your customers should find their usual payment method at a glance.
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