Cyber Monday 2015 brought in a whopping $3 billion in revenue to online retailers. And yet, according to a recent study BlueSnap conducted in partnership with PYMNTS.com, that number could have been a lot higher. That’s because online merchants continue to see high abandonment rates, losing as much as 42% of sales due to online checkout friction and payment processing declines. We call this the checkout abandonment problem – and if you’re a retailer, you might not even know what causes it.
The Checkout Abandonment Problem
So what actually is the checkout abandonment problem and how do you fix it? The checkout abandonment problem is made up of three parts – checkout friction, consumer confidence and payment processing declines.
Checkout Friction:
- Too Many Steps/Fields – Do shoppers really need to enter their address four times to make a purchase?
- Displaying local currency – You shopper wants to know what they are really paying
- Limited Payment Choices – (i.e. wallets or alternative payment types aren’t available).
Consumer Confidence:
- Local Language – If shoppers can’t read your page, adios!
- Security Logos and badges
- No Coupons – Many shoppers won’t buy without them.
Payment Processing Declines:
- Acquiring Banks – Connections to multiple banks is key to higher conversions. If you are connected to only one bank, international transactions are less likely to be approved.
- Retries & Failovers –With multiple connections to acquiring banks you can see an uplift of 3% with failovers
- Aggressive Fraud Rules – Make sure you have proactively managed fraud rules and are staying current with the latest fraud patterns so you can avoid false positives.
- Currency Mismatch – Processing transactions in local currency can increase conversions up to 10%.
- Large Transaction Amounts – By breaking up large payments such as subscriptions into monthly or quarterly transactions as opposed to yearly transactions, you can decrease the chance that the payment triggers a fraud alert
These friction points and payment processing declines cause you to lose customers right at the moment of purchase – after the hard work of attracting and converting those customers has already been done. But it doesn’t have to be that way. No merchant should lose a sale simply because they have one too many form fields or can’t process a large transaction.
To help retailers like you reclaim lost revenue and recognize points of friction within the payment processing and checkout process, we developed the Checkout Conversion Calculator.
The first of its kind, the Checkout Conversion Calculator will give you two scores based off of your answers to a set of questions — one score for checkout friction and one score for payment processing. Scores are measured on a scale of 0-100. The higher the score, the better the conversion rate.
What’s the Solution? The Checkout Conversion Calculator!
The first step in fixing the conversion problem is to find out how your current checkout and payment processes measure up by using the Checkout Conversion Calculator. The calculator will be able to give you not just a score but show you the areas of friction that are negatively impacting the checkout and payment process for customers. Simple changes can go a long way. Things such as offering coupons and free shipping as well as accepting all payment types and pre-filling forms make a huge difference in the checkout conversion process.
Prezi and Magisto are two examples of retailers who received high conversion scores because of their low friction and seamless payment processing approach.
The Checkout Conversion Index
Taking it a step further, these scores can then be compared against the Checkout Conversion Index, a benchmark for merchants that was created by calculating the scores of over 650 U.S.- based eCommerce retailers, across 14 industries. The index shows a sampling of the retail landscape and represents over 70% of all U.S. eCommerce spend, allowing you to see where your business stands in comparison to your peers and to understand how much money you are leaving on the table – or more appropriately—in the abandoned carts of consumers.
So if you want to make 2016 your best year yet, find out how your business measures up. Get your score with the Checkout Conversion Calculator and be on your way to increased revenue in the New Year!
As a global payment technology company, BlueSnap believes every customer has the right to a seamless online experience and the ability to purchase easily, quickly, and securely. And because merchants spend countless hours bringing their products to market, they deserve the technology, tools, and support to create an exceptional buying experience. Let us show you how we can increase your businesses conversion rate and deliver a seamless customer checkout and payment process.
