As an online retailer, you face many challenges. In the following, you will learn how to optimize online payments so that succeed not only in the domestic market but also on the international stage in e-commerce.
How to optimize online payments so that they can increase conversion rate?
Mollie and the independent consulting agency Coleman Parkes recently surveyed 2,500 retailers in five European countries about the status quo in online retail. The result was that for the majority of all online retailers (65 percent), the conversion rate is still the greatest obstacle to success and thus also to growth.
The conversion rate describes the rate at which a customer is converted into an actual buyer – and this is exactly where the difficulty lies because it requires some adjustments and considerations to function constantly and constantly in online trading. Three major areas of concern emerged from the study:
1. For 31 percent of those surveyed, the quality of their online payment services in the online shop is a conversion obstacle.
2. 41 percent of those surveyed still consider the mobile user experience to be a major challenge with the income generated from online shopping.
3. 43 percent of those surveyed see problems in the checkout as a hurdle when it comes to turning customers into buyers.
Conversely, it becomes clear that in international trade there are only those online shops that on the one hand optimize their own means of online payment and on the other hand constantly improve the user experience in the mobile area and at the same time ensure that the checkout works smoothly.
Quality in the online payment service is the be-all and end-all
Eliminating problems within the conversion rate does not always have to mean that your own online shop has to be set up from scratch. Rather, it is about the quality assurance of their own online payment services – and above all the further optimization of what is already optimized well.
The biggest conversion killer in e-commerce to date is the process in which customers end up in a completely new environment within the online payment process. The moment the customer leaves the familiar web environment, doubts often arise, which in the next step leads to the purchase being abandoned.
With the right payment provider, the customer stays in a familiar environment. For example, credit card online payments can be made directly in the online shop – without even leaving the website once. A checkout that works seamlessly eliminates doubts, builds trust, and has been proven to improve the conversion rate by up to seven percent.
Optimize local online payment options for cross-border success
The study by Mollie and the ECC shows that PayPal is still the most popular payment service – at least for 79 percent of the online retailers surveyed. This is followed in the German market by prepayment (71 percent) and instant transfers (63 percent).
But is this really what customers want? According to the ECC study, the most popular payment methods for consumers in Germany are:
According to this, although PayPal is also a popular payment method for end consumers, it is not the payment method specified by the retailers that follow, but payment by credit card, flexible payment via Klarna as well as immediate transfer and SEPA direct debit.
Nevertheless, the following applies: The more international your own online business is, the more optimization is needed in the area of payments. The main point here is not to offer a key payment option that works internationally, but rather to think locally. According to the study, this is also signed by 69 percent of the online retailers surveyed, thereby confirming that success in e-commerce lies in offering local payment options.
At the same time, according to 58 percent of the retailers surveyed, local payment methods increase sales. The locality is also increasingly mentioned as a guarantee of success in the range of currencies. Experience has shown that those who accept national currencies have higher sales, say 66 percent of the companies surveyed.
In the payment mix, quality comes before quantity
Creating the optimal checkout in your own online shop does not mean committing yourself to a few popular payment methods – quite the opposite. A payment mix is much more suitable in which customers can not only pay with local payment methods but also find international and popular payment options at the checkout.
So far, German retailers have mostly followed long-established payment methods. Accordingly, they are mostly behind PayPal (65 percent). In addition, there is payment with the Mastercard credit card (53 percent) and the Visa credit card (55 percent), especially when it comes to secure international payments.
For online retailers, this means not only analyzing their own customers in detail but also taking a closer look at their own target markets. Which means of payment do your customers prefer? Which local payment options are known in the target market? How can one’s own mix of payment methods be optimized?
However, the study also ventures a look into the future and confirms that by the end of 2021, further payment options will be launched at online retailers. These include, for example, different e-wallets such as Apple Pay, Google Pay, and Amazon Pay, which are becoming really interesting for almost 19 percent of retailers. For this reason, it is important for all merchants to keep an eye on the younger generations in particular, to add new payment methods to the online store and thus ensure customer satisfaction.
By the way: on average, German online retailers offer nine means of payment. Is that enough to be successful? no, Because when it comes to the range of payment options, it is not necessarily about the quantity of the payment types, but above all about the quality. It’s important to use payment methods that are tailored to your customers and to adjust options whenever you want to target a new market.
Mobile Commerce: more than just a plan
The first step in the direction of cross-border trade and expansion has been taken with the adjustment of the company’s own means of payment. Nevertheless, this does not mean that nothing stands in the way of your own growth.
The world is becoming more and more mobile. People shop on their smartphones, shopping lists are in apps, and evening bills are quickly split with friends on their smartphones. Gone are the days when the computer was opened to do business on the Internet. Today, this can be done quickly and easily using the smartphone, which you always have in your pocket anyway.
And that is exactly a new challenge for anyone who owns an online shop or is just establishing themselves in e-commerce. How do you reach those customers who only shop via smartphone? What do you have to consider if the online checkout suddenly needs to work perfectly on mobile devices?
Online payment optimizes conversion rate
Apart from the optimization of the mobile display of the online shop, the main thing is your own checkout. Abandoned purchases mainly happen when there are problems with the payment, you are suddenly redirected to another website to pay or other delays occur.
If you want to create a successful checkout, you should pay attention to the following four points:
• 1-Click-Payments: It couldn’t be simpler or faster. With just one click, the product is sent to the stored address.
• Accept mobile wallets: More and more users are switching to using mobile wallets and paying conveniently via Apple or Google Pay. So why not offer exactly these options as a dealer?
• Offer local payment methods: If you want unlimited success, you should also offer local payment methods.
• Smart Authentication: The perfect option for all users who only want to enter their data once.
With a combination of optimized payment methods that work both locally and internationally and an online shop that is just as appealing on mobile as on desktop, the basis for growth and success in e-commerce is in place. But behind every successful online shop, there is still an online retailer who has to drive the business forward.
Success means being open to trends in e-commerce
The researcher and psychologist Dr. Carol Dweck have dedicated a study to an interesting topic: How does our thinking decide on success or failure? She argues that what matters most to human development is not talent, but self-image.
Accordingly, individuals can be divided into exactly two groups: people with a fixed self-image (‘fixed mindset’) and people with a malleable self-image (‘ growth mindset ‘). The fixed self-image robs us of development opportunities, whereas opportunities for personal success through hard work, learning, training, and persistence are provided by the malleable self-image. Dweck assigns a so-called ‘growth mindset’ to this group – an attitude that follows the pursuit of growth.
Individuals are not necessarily conscious of their own self-image, but their self-image can still be discerned from their behavior. This is particularly evident in the reaction to failure. Individuals with a fixed self-image fear failure because it is a negative statement of their basic abilities, while individuals with a growth mindset are less bothered by failure. They recognize that their performance can be improved and that learning comes from failure
What does that have to do with online trading?
Quite simply: If you want to be successful in e-commerce in the coming years, you have to be open to the changes that are coming to this industry. This is the result of the study by Mollie and the independent consulting agency Coleman Parkes.
In the course of the study, entrepreneurs were asked to rate their own businesses on a scale of 1 to 5 based on seven statements. All statements corresponded to the growth philosophy of researcher Dr. Carol Dweck. The statements were then filtered and evaluated using a point system: Entrepreneurs who scored more than 28 points out of a possible 35 belonged to the group of people with a ‘growth mindset’.
Key findings from the study:
• Entrepreneurs with a ‘growth mindset’ are much more likely to sell their products internationally than locally.
• Entrepreneurs with a ‘growth mindset’ already offer a mix of several payment options (on average 4.2 payment types) to serve their international market.
• Entrepreneurs with a ‘growth mindset’ have fewer uncompleted purchases, namely 8.8 percent compared to 9.4 percent for entrepreneurs who follow a ‘fixed mindset’.
In the coming years in particular, there will be changes in online trading that are crucial to your own success – if you don’t follow along as an entrepreneur, your competitors will be able to pass you by quickly and easily.
E-commerce is becoming more and more agile, open, and above all more challenging for those who are wary of change. These include the following five growth trends:
1. Online trading will increasingly cross borders.
2. The payment options are becoming more variable and international.
3. Mobile shopping is becoming increasingly important.
4. The customer experience in the shop will be more dynamic and friendly.
5. Those who score points in the checkout achieve the highest conversion rate.
Optimize online payments to succeed
Growth and above all the will to grow are two driving forces in online trading. In these fast-moving times, it is important to be open to changes and adjustments. Small delicatessens must be able to offer their range online if it is not possible to go shopping physically. A small online shop offering homemade bags should also be able to sell across borders.
Above all, however, an online retailer should always be open to wanting to improve – to grow. This is the only way to impress in a market of constant competition, where you have to excel to stand out.
With the right payment mix, a sophisticated concept for a perfectly running online shop on smartphones, and, above all, your own mindset of being open to change, growth, and success in e-commerce will come automatically.