Poor Payment Experiences Drive Online Customers Away
As the shift to digital accelerates, online merchants that fail to offer a strong payments experience face significant risk of losing customers to those that get it right, according to the latest findings from Plaid, an open finance data network and payments platform.
A positive payment experience is now an integral part of how customers view online merchants. Nearly two thirds (62%) of consumers would avoid merchants that offer a ‘poor’ payment experience and one in five (22%) would even avoid the merchant even if they needed their goods or services.
Inversely, less than a tenth (6%) of UK adults would continue to shop as normal with a company if they experience a poor payment experience with them.
It is not only the quality of the payment experience that matters. Four in five (81%) people feel it’s also important for companies to offer a wide variety of payment options, whether that be buy now pay later, or digital payments. Payment flexibility is so significant that a fifth (22%) of people see a lack of choice as a reason to abandon a transaction altogether.
Consumers also increasingly have clear payment preferences. Over a third of people (36%) cited methods that required customers to enter in their personal financial information – such as the long card number on a credit or debit card – as a reason they would abandon a purchase from an online business. Another third (30%) would abandon the purchase due to overly complex identity checks or verifications.
Younger generations, however, have even stronger views over their preferred payment methods. Of those aged 18 – 34, 32% would change their payment method to avoid having to repeatedly enter personal information; 37% for lower fees, 38% for faster transactions and 34% for fast refund times.
The businesses getting payments right
When asked which types of companies offer good payment experiences, consumers ranked food retailers and supermarkets highest followed by clothing retailers and streaming services. Hire companies and event companies recorded the worst scores.
Keith Grose, Head of Plaid UK, commented: “The growth of e-commerce has been stratospheric in the last couple of years as consumer demand changed almost overnight, and companies move swiftly to adapt to completely new trading conditions. But this has brought a new set of challenges for retailers as consumer expectations rise too. Many merchants will know well that consumers want their payment experience to be as smooth as the rest of the online shopping experience. How people pay is no longer an afterthought, but a crucial part of the customer experience.
“As businesses look to bounce back from the turmoil of the past two years, and support the economic recovery by doing so, they cannot afford to lose customers who’ve seen the benefit of digital innovation and a better way of paying.
“That’s why investment into digital checkouts and e-wallets is now a core focus for companies, but they cannot go it alone. As such, there’s a vibrant and emerging segment of fintech companies focused on this space.”