By Scott Fitzgerald
Making sales and bringing in revenue is the goal of any business large or small. If you're a merchant selling online, this means accepting credit cards and/or alternative forms of digital payment. And while that may sound simple, there are many aspects of online payment processing, that if not optimized properly, can really eat into your sales.
Here are five common blunders that new and small businesses make when accepting payment through their e-commerce stores.
1. They don't accept multiple forms of payment.
In order to maximize conversions, it is essential that online retailers allow customers to pay in the form that is most convenient to them. That doesn't just mean accepting traditional forms of payment such as MasterCard, Visa, and American Express, but also accepting alternative payment methods such as iDeal, ACH and Sofort, and mobile wallets such as Visa Checkout, MasterPass, PayPal, Apple Pay, and Alipay among others.
Not only will accepting mobile wallets allow you to convert more shoppers to buyers, but some payment systems may even offer you an additional marketing tool by offering coupons or discounts to shoppers that use their wallets when making purchases at your store. Mobile wallets are especially useful in converting mobile shoppers, where abandonment rates are traditionally the highest, hovering around 80 percent.
2. They don't optimize for cross-border e-commerce.
Think your business is too small to attract international shoppers? You might be surprised at how your sales will increase once you optimize for a global market-which shouldn't be hard, assuming you have a robust, globally-minded payment processor. Currently, the cross-border opportunity is estimated at $300 billion and forecasted to grow. So if you want a piece of the pie, jump on the international opportunity early, while your business is small and growing.
To optimize for cross-border e-commerce, ask your payment processor if they are able to do the following-and if they can't, it may mean it's time to start looking for a new payment processor.
- Offer prices in local currency: If you are selling to shoppers around the world, the prices on your website need to be presented in a shoppers' local currency. Make sure you work with a payment processor that will not only be able to present local currencies for multiple countries, but will also be able to pay you in your preferred settlement currency, USD for example.
- Present a checkout page in the local language: If a shopper can't read your website, the chances of them sticking around long enough to convert is slim to none. Utilizing hosted pages through a global payment processor is often the easiest way to present the local language of almost any country.
- Offer local payment types: Each country has different preferences and popular payment types. For example, in Germany Sofort is one of the most popular payment methods, while in China shoppers prefer Alipay. That's why it is important for merchants to think locally and consider the buying habits of shoppers across multiple regions and demographics.
3. They don't use intelligent payment routing.
Intelligent payment routing allows merchants to increase their percentage of approved transactions by connecting to multiple acquiring banks and utilizing failover capabilities.
An acquiring bank is a bank that processes credit and debit cards on behalf of the merchant. Once a customer makes a purchase on your e-commerce site, the payment request goes through the payment gateway via your payment processor to an acquiring bank where it is either approved or denied. When your business is connected to multiple acquiring banks, your shoppers' purchases are routed to the bank where they are most likely to be accepted.
Similarly, if a purchase is denied at the first acquiring bank, it can be rerouted to a second acquiring bank for approval. This process of rerouting purchases for a second or third attempt at approval is called failover.
4. They don't offer coupons or free shipping.
Free shipping may sound like a minor detail but it can be the difference between a shopper buying from you or your competitor. Amazon Prime is a good example of the power of free shipping. According to Statista, 78 percent of respondents joined Amazon Prime in 2015 because of its free two-day shipping. In addition, 56 percent of shoppers abandon shopping carts because of unexpected costs at checkout. And the most common unexpected cost shoppers encounter are shipping charges. So if you can, offer free shipping; if it's not possible, make sure you are clear about your shipping charges up front.
Similarly, everybody loves a bargain. Offering coupons can help to increase conversions by giving shoppers that extra incentive to purchase. And by auto filling coupon codes on the checkout page for shoppers who have clicked a certain promotional email, banner, or CTA, you make the checkout process even easier. Plus, offering coupons is a great strategy to boost repeat purchases and increase customer lifetime value.
5. There is too much friction in the checkout process.
Removing friction from your checkout process can increase sales by as much as 40 percent. Friction on checkout pages can be defined as all the noise that gets in the way of a smooth and seamless checkout experience for your shoppers, and ultimately can result in high abandonment rates. Examples of friction include too many form fields, no security logos, and no live help option.
In today's ultra competitive digital age, shoppers can be on a competitors' site with the simple click of a mouse. And if they experience friction on your site, that's just where they will be. So remove the friction and keep your shoppers happy-it's one of the easiest things you can do increase revenue.
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