While e-commerce was growing fast prior to COVID-19, the pandemic accelerated the trend, pushing more consumers to buy online. Online spending with U.S. merchants was up 14.2 percent in 2021, accounting for more than $870 billion in sales.
However, e-commerce payment methods haven’t necessarily kept pace with consumer demands for frictionless experiences. One indicator is the high average shopping cart abandonment rate, which as of March 2022, is 69.82 percent. Some shopping cart abandonment will probably always occur. Some shoppers consider the shopping cart as a convenient place to save items of interest without having to create an account and develop a wish list. However, a study by Baymard, which excluded “just browsing” shoppers, found that 64 percent of shopping cart abandonments could be solved by implementing secure e-commerce payment methods.
These reasons include:
- I didn’t trust the site with my credit card information (18 percent)
- Too long/complicated checkout process (17 percent)
- I couldn’t see/calculate the total order cost up-front (16 percent)
- There weren’t enough payment methods (9 percent)
Reduce Payments Friction with these E-Commerce Payment Methods
Competitive e-commerce merchants are looking for solutions that simplify and secure the online checkout process and provide customers with the payment convenience they demand. Your clients may benefit from implementing these technologies:
One-click checkout (such as Apple Pay/Google Pay)
This e-commerce payment method that originated with Amazon allows customers to save their account numbers, billing and shipping information after their first purchase and then make future payments with a single click.
Tools like Pay API from Datacap Systems help make merchants enable this functionality easily and quickly. Merchants benefit from the win-win of providing an experience that serves the customer better while reducing the time it takes from decision to transaction, which can decrease abandonment and increase revenues.
Buy Now, Pay Later (BNPL)
E-commerce merchants, particularly those that sell higher-ticket merchandise, could benefit from offering buy now, pay later (BNPL), which is expected to generate $955 billion in transactions by 2026. With this payment method, consumers make interest-free installments for purchases, helping them control credit card debt while still getting the merchandise they need immediately. While there is some risk for merchants, there are safeguards that prohibit BNPL customers who didn’t settle on time from repeat purchases.
Native online ordering
Restaurants and grocers often find it more beneficial to accept online orders directly rather than using third-party platforms. In addition to saving the fees that third-party services charge, a Sense 360 survey found that 63 percent of consumers prefer to order directly from a restaurant.
Electronic invoicing and recurring payments
Field service businesses, companies that sell subscriptions or retailers who sell curated monthly boxes can benefit from electronic invoicing and recurring payment capabilities. Digitizing these processes saves time, reduces paper use, and streamlines transactions for both the business and customers. Merchants can also benefit from moving payments to the background of the experiences they deliver, making it more likely that customers will continue with ongoing services or subscriptions.
E-gift cards / virtual gift
In addition to physical gift cards, merchants can offer e-gift cards to make purchasing, giving and using them easier online as well as for in-person purchases.
Use Tokens to Enhance Experiences
Regardless of the e-commerce payment methods your clients choose, there’s payment security technology that can play a role in excellent customer experiences. Payment tokens replace card numbers with randomly generated characters that can be deciphered only by the token vault accessed by the payment processor. Partnering with a payment processor that uses cross-platform tokens allows consumers’ credit card numbers to be “remembered ” no matter which payment processor the merchant uses. They also remove friction from cross-channel processes, such as curbside pickup, buy online pickup in store (BOPIS), and returning items in-store after online purchases.
E-commerce Payment Methods In-store or Curbside
While e-commerce payments methods are traditionally associated with online checkout, some of the same tools and functionalities will enhance the customer experience during in-person transactions.
For example, QR code and text-to-pay enable customers to scan a code or receives a text that takes them to an online portal to complete payment. These payment methods create a touchless checkout experience ideal for both in-store, curbside, and payments at the front door after delivery or on-site services.
Give Your Clients the Advantage of Excellent Payment Experiences
Virtually all of your clients are accepting a higher volume of e-commerce payments than in the past – and many will likely need to enhance the payment experiences they provide. Speak to your payments partner about the e-commerce payment methods you can provide to your clients – and ensure you can deliver the solutions and technologies your clients need to meet omnichannel consumer demands.
To learn about a partnership that can enable you to provide all the e-commerce payment methods your customers need, contact Datacap Systems.
