Buyer behavior during online checkout
It can be supremely frustrating to see customers make it all the way through the buying journey, only to jump ship during checkout. The good news is, it’s not completely out of your control. If you notice a pattern of this happening, you know you need to focus on improving the checkout process and can easily pinpoint the issue with the right knowledge and tools.
Two of the biggest issues most e-commerce and retail businesses face that affect checkout are cart abandonment and checkout abandonment.
What is checkout abandonment?
Checkout abandonment is when a person has added something to their cart and clicked “buy now” or “checkout” but drops out of the process before completing the purchase. The payment experience is almost certainly a contributing factor in this case.
What is cart abandonment?
Cart abandonment, on the other hand, is when a customer adds something to their cart but never initiates the buying process. This often has nothing to do with the customer experience. It could simply mean they were browsing, saving items for later, or just not quite ready to buy.
How to calculate your company’s checkout abandonment rate
While Google Analytics gives you insights into your abandonment rate, it’s focused on cart abandonment rather than customers dropping out after initiating the checkout process.
To get a better idea of your checkout abandonment rate, you can use the simple formula in the graphic below:
E-commerce metrics you should be tracking
There are many ways to track how your business is performing as a whole, all of which are important. However, to see the most success for your e-commerce or retail platform, here are the top metrics you should keep your eye on.
Average order value
Cost per acquisition (CPA).
Customer lifetime value
Customer retention rates
Sales conversion rates
Subscription rate (if applicable)
Number of transactions that timeout
Things to consider when building a checkout experience
While it largely depends on the type of experience you want to create, there are best practices you can follow to build great checkout and payment experiences. This includes offering a variety of payment methods, providing fee transparency, branding your payments interface, and more, which we get into more detail below.
Branded payments: Think of payments and your checkout process as a part of your product
Don’t treat checkout and payment processes as afterthoughts or separate entities. Instead, treat them like they’re part of your online shopping experience or one of your products. These important customer interactions are an extension of your business—especially in the minds of consumers. To customers, shopping and checkout are one and the same.
Here’s an example:
Imagine you’re at a shopping mall and you stop at a Nike store to buy a pair of shoes. But when you’re ready to checkout, a clerk directs you to pay for your shoes at a Sketchers store a few doors down. This would be a jarring if not outright unpleasant experience. This example is very much what it’s like when your online checkout experience doesn’t match your online store. Not only does this sour the shopping experience at your store, but it also creates feelings of distrust and may come across as a scam.
Branded payments improve customer experiences but also instill more trust and confidence in your business. This is where embedded payments really shine. When you integrate with a payments provider that offers white labeled checkout environments, you’re taking ownership of this part of the customer experience and ensuring your branding is familiar and consistent throughout the buyer journey. This helps make the checkout process more seamless and fluid for consumers.
Keep it simple
The fact is people like fast, straightforward processes when it comes to making payments. Aesthetics are important—especially consistent branding—but resist the temptation to add unnecessary elements or to require more information than is necessary. At least 17% of consumers report that they’ve stopped the checkout process because it was too long or complicated.
Along with embedded payments, you can implement things like guest checkouts or social logins to make your checkout process faster and frictionless.
What are guest checkouts?
A guest checkout is when you allow customers to make a purchase without creating an account for your online store or platform. This can significantly speed up the checkout process for shoppers. The tradeoff to this approach is less data for your business and the inability of customers to track orders or see their order history.
What are social logins for checkouts?
A social login lets your customers sign up or log in to your platform without creating an account and having to remember yet another password. Instead, their account is linked and authenticated via a social account such as Gmail or Facebook. Social logins make the checkout process more convenient and faster for customers. The downside is that your business has less control over personalization options.
Payment options: Let people pay the way they want to pay
Another thing to keep in mind is payment methods. A recent study found that 7% of customers chose not to complete a purchase because they couldn’t use their preferred payment method. To add insult to injury, you’ll also be losing repeat business from these customers.
We recommend (and support) offering all major credit and debit cards, such as online ACH payments, alternative payment methods like Apple Pay, Google Pay, and payment acceptance methods like payment links. These options are the most widely used and popular among consumers. It’s also beneficial to ensure your payments provider is able to anticipate and meet future payment acceptance innovations.
Be upfront: Avoid extra costs and hidden fees
Transparency is key to better experiences and increased conversions. According to Baymard, 48% of abandoned checkouts are because of unexpected fees or high shipping costs. If customers are aware of all costs upfront, they’re less likely to abandon the checkout process.
Choose the right payments provider for the best checkout experience
Last, but certainly not least, is the payments provider you partner with for your retail or e-commerce platform integration. Not all providers are flexible enough to create checkout and payment experiences optimized for higher conversion rates. You also want to make sure your provider is flexible, fast, reliable, and built to keep up with future technology.
Strategies for upselling and encouraging repeat business
Along with optimizing payments for higher conversions, there are certain tactics you can implement to increase revenue and attract repeat customers. Below are some of the most popular methods:
Display complementary and/or related products in cart or during checkout
Offer product bundles
Start a loyalty program
Encourage additional purchases with limited-time offers or discounts at the time of checkout
Personalize the checkout process as much as possible
Send personalized, post-purchase follow-ups, such as to thank customers for their business, to ensure their satisfaction, or to offer them a discount on their next purchase
This isn’t even an exhaustive list! There’s many ways to encourage repeat business that you can easily tailor to your specific customer base. The important thing is to always consider your customers' needs and wants. Moreover, aim to anticipate what they may want or need in the future.
How does the back-end payments technology support the experiences you’re building?
The simple fact is, without a payment, there’s no purchase. This makes the technology you choose to fuel payments a major influence on your customers’ experience. Not only that, but this same technology greatly affects your overall business costs. Luckily, the right payment partner can help on both fronts.
The key factors you need to look for in a provider’s payment tech are reliability, security, speed, flexibility, ease of use, and scalability.
Reliable payments API
A critical back-end factor that greatly affects customer experiences is reliability and performance. Credit card processing outages can be detrimental to your business. Finix’s payments API has industry-leading speeds and reliability (99.999% uptime)—answering billions of API calls a year. We also have fail-safes in place to ensure a seamless payment experience at all times.
Furthermore, well-designed APIs can help prevent timeouts and payment errors during the checkout process.
To learn more about how Finix’s API can improve your checkout experience, visit our blog: Fast API Response Times For Better Payment Experiences
No-code payment solutions
The cost of building the technology can really rain on your payment acceptance parade. That’s where flexibility and ease of use come into play. With Finix’s no-code solutions, you can save 3 months or more in development time—which makes a sizeable difference to your bottom line.
Finix’s no-code features include:
Hosted checkout pages
Electronic invoicing tools
Automated and exportable reporting and analytics
With these options, you’ll get to market faster, better monitor your payment operations, and create payment experiences that will delight your customers and make managing your payments easier than ever.
Compatibility with multiple shopping carts and e-commerce platforms
Another area where back-end payments technology supports checkout experiences is the ability to connect with other shopping carts and e-commerce software products, such as Magento, Big Commerce, and WooCommerce. Finix has direct integrations with more than 130 e-commerce plugins.
Payments dashboard with payments analytics and easy dispute management
Don’t underestimate the importance of a well-designed and user-friendly payments dashboard, as it’s the backbone of your payment operations. Finix provides a robust payments dashboard that lets you easily manage everything in one place.
Inside the dashboard, you have access to automated and exportable reports with detailed analytics and transaction data on authorizations, refunds, and more. Our dispute management tool is baked into the dashboard as well, which makes managing disputes and chargebacks simple and efficient.
We also have virtual terminals and no-code, customizable checkout pages. This means you can take payments in multiple ways and provide the experiences you want for your customers–all while getting up and running faster. At Finix, you’re able to start accepting payments within a day in most cases!
Fraud technology should always be a major consideration when choosing a payments provider, as it not only affects your bottom line but also your customer experience. For example, if your provider’s fraud monitoring tool (if they have one) flags legitimate transactions as fraud, the customer’s purchase can’t be completed or at the very least, they’ll need to take additional steps.
False fraud flags drive down your authorization rates and drive up customer frustration—which often leads to checkout abandonment.
At Finix, we provide a fraud monitoring service that’s based on comprehensive rulesets that evolve over time through machine learning. Our fraud API detects fraud while preventing false declines. For more details, see our blog: “Reduce Disputes with Real-time Fraud Monitoring.”
What makes a good payment experience?
Ultimately, a good payment experience is one your customers don’t have to think about. It should include your company’s branding, be fast and secure, and require as little effort from your customers as possible. And of course, you’d also want to avoid factors that lead to negative outcomes, such as long or tedious checkout forms, slow payment APIs, hidden fees, and technical errors.
One of the best and easiest ways to create amazing payment experiences is by choosing a payments provider that’s flexible, customizable, and reliable. That’s where Finix fits into the picture. Our payment processing solution was built with your and your customers’ experiences in mind. We have industry-leading uptime and offer unrivaled transparency and flexibility.
To learn more about how Finix can help you improve your payment and checkout experience and increase conversion rates, fill out the form below to download our white paper: Optimize Your Payments Acceptance for Higher Conversion Rates.
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