Frictionless Payments in a Time of Social Distancing
The impact of COVID-19 on the economy is complex but it’s largely positive news for e-commerce. According to a study by Kantar, in the beginning of April 2020, U.S e-commerce merchants saw a 54% increase in orders compared to the same week in 2019 and a 37% increase in revenue. In the UK, Germany and France, up to 80 percent of shoppers now make at least half of their purchases online.
But this increase in numbers has created a number of challenges for merchants and raises a key question: How can e-commerce emerge even stronger from a global pandemic that’s changed the payments landscape?
CONSUMER BEHAVIOR HAS BECOME INCREASINGLY DIGITAL
Lockdowns have accelerated digital adoption which is driving entirely new patterns of consumption. This is not surprising, given the lock down measures in many countries and the fact that the only way for people to connect with others outside the home is digital. The interesting thing is the rapid adoption and the variety of online services being provided and exploited. To name one, subscription and convenience services have seen significant upward trends in both revenue and conversion.
Online has become the default shopping channel for many consumers. Since the beginning of the pandemic, Internet users’ interest in online shopping and how to buy online has doubled worldwide.
LOCAL PAYMENT METHODS ARE A LEVER FOR GROWTH
Since the beginning of the pandemic, consumers have begun to search for goods and services outside of their immediate geographic area. The main drivers of this trend were the price level and the availability of products due to the challenges posed by the global supply chain. As a result, the opportunity for merchants to sell beyond their borders has become even greater. This has allowed them to close revenue gaps and increase the reach of their businesses to an entirely new global audience.
Despite this undeniable opportunity for e-commerce merchants, payment preferences vary from country to country. Local payment methods such as bank transfers, e-wallets, cash-based digital payments and local cards are the dominant payment methods used in more than 70% of all consumer transactions globally. International credit cards only have a market share of 23% worldwide.
FRICTIONLESS PAYMENT EXPERIENCE DRIVES LOYALTY
Today’s consumers increasingly expect payments to be easy and instantaneous. They will ruthlessly turn away if the payment processes they encounter do not meet their needs. Retailers must focus on providing a frictionless and trusted user experience that gives consumers the wealth of payment choices they demand. By offering your customers a frictionless payment process that supports the payment method of their choice, they are more likely to choose your company rather than a competitor.
3 TIPS FOR STANDING OUT AMONGST THE NEW COMPETITION
1. Optimize the user experience of your online store
Delivering a compelling user (UX) experience is critical to the success of your e-commerce business. Merchants should create user journey maps to find and eliminate friction or leak points in the experience. The checkout process is a critical aspect to look at closely, a cluttered and confusing one can be frustrating for them. More than ever, a deep reflection on the user experience is necessary. Do you offer the customer’s preferred payment methods? How do you follow up if they don’t complete the payment process?
2. Find out what local payment methods customers prefer in each target market
The opportunity to offer local payment methods has always been a key element in stimulating cross-border conversion. During the outbreak of the pandemic, consumers became more and more attached to their money, while the demand for familiar and trusted payment methods increased. With over 450 significant local payment methods across the globe, each country will have different payment preferences. Work with your payment service provider to activate as many payment methods as possible at your checkout. Knowing which payment methods are preferred in key markets will help you understand how to develop your global payment strategy.
3. Consider new markets
More and more customers are online and looking for products or services that meet their specific needs. Merchants could reach untapped markets by offering the right combination of products, user experience and local payment methods. All these elements predict the ideal moment to capture cross-border sales opportunities. To take full advantage of the opportunity in markets across the globe, merchants need to integrate a cross-border solution into their existing e-commerce platform.
NEXWAY CAN HELP YOUR BUSINESS THRIVE AND GROW
The final month of 2020 continues to bring challenges, with a second wave of global COVID-19 infections and new restrictions impacting the holidays. Still, this pandemic is fueling a rise in opportunities to scale digital business. It’s time to reset, pivot and think big to transform your business operations to match new digital expectations. Whether you tap into the power of our frictionless payment or e-commerce solutions, Nexway team can help. Contact us today to learn how.
The Nexway Team