What happens after clicking the “Buy” button? 6 Best practices to increase conversion at checkout

Ecommerce retailers spend a lot of time and money on marketing and advertising to their customers, enticing them to browse, buy and increase conversion. On an ecommerce site, algorithms often throw out recommended products on pages designed to make browsing simple and free from friction. But it’s the final hurdle that’s often the highest. The point of payment is too often neglected, resulting in shopping cart abandonment.

Research from the Baymard Institute found that a significantly high 69% of customers abandon their shopping carts. Although most abandoned carts are known to be through the “just browsing” mentality, more than 1 in 4 shoppers have abandoned an order due to the payments process being too long and complicated. The list of frustrations is extensive: the lack of one-click payment options, challenging navigation and lack of local payment options all resulted in users giving up on their purchase.

Working with merchants from various industries on improving conversion for their customer’s payment journey after they hit the Buy button, SafeCharge offers several pieces of advice that has improved conversion for merchants by up to a double-digit percentage.

  • Offer a local payment experience to increase conversion.

    The checkout page is optimised when it offers familiar payment options to shoppers. In some countries such as in the UK, cards and PayPal make up most of the transactions, however, in many other countries, specific local payment methods will represent a significant share of transactions. This is the case for iDeal in the Netherlands (60% of the transactions), Sofort Uberweisung in Germany (16% of the transactions) or Boleto in Brazil (15% of the transactions).

    This is why, to localise the payment experience, SafeCharge enables merchants to present all relevant local payment methods to each customer based on their profile, taking into account several parameters such as where this customer is based and which device he is using. A local purchasing experience is of course performed in local currency and local language. SafeCharge supports over 100 transaction currencies. Customers using SafeCharge’s Hosted Checkout pages can also view the original transaction currency and choose to pay in the original or local currency. While the price of the purchase remains the same for customers. Last but not least, it is essential to let customers complete their purchase in their preferred language. That is why SafeCharge Hosted Checkout pages support many different languages.

  • Choose the right payment mix for your business.

    Beyond offering the right choice of local payment methods, each merchant should choose a mix adapted to the needs of its specific type of business. For businesses with a recurring business model, cards are very convenient. In addition, recurring transactions with alternative payment options are possible, using a combination of options, for example, iDeal or Sofort for the first transaction and a direct debit for the following transactions.

    Payment options may vary depending on whether a business offers digital services or if it is a retailer. While retailers prefer payment options with less risk because they are shipping high-value goods, digital goods merchants will accept to take more of a risk as the loss of a digital good is less material and in some cases, merchants will be able to withdraw access to their service or goods in the case that they have not yet received payment. It is also interesting to weigh the costs of adding a new payment option versus the increase in conversion offered by this payment option. Therefore, SafeCharge facilitates A/B testing when considering the addition of a new payment option to verify if it adds convenience to customers. While having the choice of adding more payment methods for increasing conversion is great, in our experience, too much choice is counter-productive. In many cases, offering more than 4 payment method types can impact conversion negatively.

  • Provide clear instructions.

    To address any potential issues that may arise, response messages and help texts on the page should be clear and comprehensive. The help text next to a CVV field, for example, should be clear about where to find the code on each card. Error messages should be very visible and explain in a detailed way what is expected from the user.

  • Fast track returning customers.

    To make sure loyal customers enjoy a fast checkout, offering them to pay in just one-click is a must. SafeCharge enables merchants to activate a secure one-click checkout for their customers, without adding any additional compliance requirement thanks to tokenisation. Tokenisation technology stores customer payment data which can be recalled from secure PCI certified servers, once a repeat payment is required.

  • Increase conversion.

    When a customer encounters an issue with their selected payment method, for example, when the payment method system is down, instead of the transaction being abandoned, SafeCharge enables businesses to suggest an alternative option with which the customer can finalise the payment process. An alternative way to increase conversion while still preventing fraud at checkout is to enable 3D Secure checks dynamically. Dynamic 3D Secure enables merchants to route a transaction for a 3D check only if the transaction is reaching a certain risk threshold, is from certain countries, or above a certain amount. Traffic that is not high risk will continue through the processing procedure as usual.

  • Continuously improve experience based on customers payment behaviour data.

    Knowledge is power, the more that is understood about your shoppers’ checkout journey, the more it can be enhanced. To provide merchants with customer behaviour data when paying online, SafeCharge has developed SafeCharge Checkout Analytics, a service providing merchants with customer behaviour data on their checkout page. This data shows merchants at which point in the checkout process issues arise. Based on this information, merchants can make the necessary changes to the checkout page. Following implementation, impacts of the changes can be measured and updated again if necessary. By implementing results from SafeCharge Checkout Analytics, merchants increase their conversions, while shoppers enjoy an optimised shopping experience, free of friction: a win-win situation for all.

The final step of the purchasing journey – the payments step –  for a customer is critical as this will determine if the Buy button will be clicked or not. SafeCharge has simulated, analysed and from experience predicted many scenarios in getting customers to click that Buy button and what happens next. By optimising customer checkout pages, SafeCharge is ultimately making the payments journey easier, user-friendly, seamless and quick, with the end result to increase conversion and customer satisfaction.

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PSD2: A guide for marketplaces.

The slow decline of department stores is evident – in the US, Macy’s, Sears, and JCPenney have all recently announced that they will close dozens of stores.

In the UK, BHS has closed for good, and Marks & Spencer is set to close 30 of its stores. The online equivalent of the department store, the marketplace, is going from strength to strength: according to an e-marketer report, e-commerce sales will grow to $4 trillion worldwide by 2020, and 40% of these sales will be through marketplaces.

Online marketplaces have the advantage of offering far greater variety, virtual as well as physical goods, easy access to both big name brands and niche products, and offering both goods and services. Deliveroo and Uber are both marketplaces, linking consumers with the service providers they need.

While the future for marketplaces looks secure, there is one issue that could seriously affect their growth: PSD2.

Disappearing exceptions

While PSD2 is much discussed, the bigger discussion is what the regulation will mean for banks when they are forced to open their systems for use by outside providers. Less discussed are payment institution licenses, already necessary for any firms that provide payment services in Europe – with some exceptions. It’s the changes to these exceptions that could mean trouble for many marketplaces.

Commercial Agents are currently exempt from this license under PSD1, and many marketplaces fit the criteria as it stands now: an agent authorised to negotiate or conclude the sale or purchase of goods or services on behalf of the payer or the payee. PSD2 introduces a subtle but important difference in that an agent is authorised to negotiate or conclude the sale or purchase of goods or services on behalf of only the payer or only the payee. This addition of “only” means that marketplaces that relied on this exception can no longer do so.

Other exceptions are also being removed. Previously, if a marketplace processed under €3 million each month, there was no need for a license. This limit will be lowered to €1m — and in certain markets such as Germany and France the limit is disappearing altogether, so if marketplaces want to provide payment services at all they will need to be licensed.

International marketplaces that relied on the “one leg out” exception can no longer do so. Before PSD2, if part of a transaction took place outside of Europe, it was out of scope and not covered by European regulations. Again, it’s a subtle change that means that these transactions will be covered by European law and may take a marketplace over the limit that requires a payment license.

Obtaining a payment license

The answer seems simple — marketplaces need to apply for a payment license in order to be compliant with PSD2 regulation.

In fact, it’s anything but simple. Obtaining a license can cost more than €200,000 and can take over a year to get, and even putting the required policies in place will take six months with the assistance of a specialist law firm. There’s also a requirement to provide regular reporting information and notify the local regulatory body when there’s a significant change in the firm’s circumstances. Getting the application information wrong could lead to a delay of another six months. Non-compliance can lead to heavy fines, or even a directive prohibiting individuals from carrying out regulated activities — essentially terminating the business.

To deal with PSD2 regulations, marketplaces would be better advised to outsource payments processing, thus removing the burden of compliance. Outsourcing payments mean not only not handling this aspect of PSD2 regulation, but other aspects of compliance. The right partner can onboard sellers seamlessly, help convert browsers to buyers, hold payment until delivery, and pay out to sellers without delays or high fees.

A focus on technology

Marketplaces are essentially technology companies, building platforms to match buyers and sellers. Their focus needs to be on these platforms and not peripheral parts of the business such as payments, where others have already built specialist technology. With the right partner, marketplaces can meet PSD2 regulations and also benefit from value-added services such as insights into customer payment patterns.

The growth in marketplaces will inevitably lead to increased competition, as new platforms look to disrupt the disruptors, and retailers and other businesses pivot to a marketplace model. Those that focus on creating the best technology and offering the best experience — engaging partners for everything else — have the best chance of success. The changes that PSD2 will bring is an opportunity for marketplaces to ensure they have the right partners on board.

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How to offer WeChat Pay and open business to 600 million potential customers.

Why offer WeChat Pay? WeChat Pay is an easy-to-use mobile payment method integrated within the extremely popular instant messaging platform in China – WeChat. Though WeChat started as an instant messaging platform, it quickly evolved into a social networking, file sharing and gaming platform with a potential to be more. People can shop, order cabs and even pay electricity bills via the app using the inbuilt wallet – WeChat Pay. When you offer WeChat Pay, you have the possibility to reach all WeChat Pay users travelling abroad.

Why is it talked about around the world?

Digital payments are becoming a big part of our daily lives and the Chinese with their e-wallets are one of the early adopters. The young, tech-savvy and urban Chinese shopper is turning China into a cashless society. More than 900 million users chat, connect and shop via WeChat. Almost, 600 million people have connected their credit cards to enable payments through WeChat Pay. 40% of all mobile payments in China are processed via WeChat Pay, that’s $1.5 trillion in transactions! A big reason for this shift to mobile payments is the ease and simplicity of using WeChat Pay for both buyers and sellers.  Making a payment or accepting one, takes a matter of seconds. It is a trend that is taking hold across the world. You can see how simple it is in this video:

How does it impact businesses across Europe, the US and the rest of the western world?

The number of Chinese tourists travelling the world is constantly increasing. Since 2016 there’s been a 103% rise in the number of Chinese tourists to Europe and they’re spending more than their U.S and European counterparts combined. In fact, Chinese account for 50% of luxury sales in Europe with each family spending, on average, $5,305 on travel per year.

 

Download our infographic: Why WeChat Pay will be the next payment phenomenon in Europe

 

The biggest reason for this extraordinary spending overseas is the high tax on luxury items in China combined with the abundance of counterfeit products available in the country. Shopping is high on the to-do list of every brand conscious Chinese traveller. Offering these tourists, the ability to purchase with their preferred payment method makes perfect business sense, especially if your business services the tourism, entertainment and luxury good sectors.

How can I set up WeChat Pay?

Businesses can set up WeChat Pay to reach these potential shoppers. But unless you have a company registered in China, you’ll need to apply for what’s called a WeChat cross-border account. To apply for this account, you can connect with Tencent directly. But the easiest and most popular option for merchants is to use one of WeChat’s certified partners like SafeCharge. Applying through SafeCharge makes the process a lot smoother. No need for paperwork and we make the application on your behalf. More importantly, SafeCharge manages the payment transfers and the settlements to your account.

From a technical point of view, those who want to connect directly via WeChat Pay API have to deal with documents in Chinese…whereas integrating with SafeCharge is easy. We can get you up and running within 10 days without the need to apply for a cross-border payment account. WeChat Pay opens up possibilities for your business, all you have to do is offer it to the millions of potential customers out there.

It’s easy to see why 85% of businesses choose to go through a WeChat certified partner such as SafeCharge. In addition to WeChat Pay, SafeCharge can also provide you access to a host of additional local payment options to help your business connect with shoppers around the world.

Contact us to learn how to offer WeChat Pay

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How marketplaces can grow faster using the right payment technology.

The Sharing Economy Boom

Online marketplaces are named for their real-life counterparts – a single place you can visit and buy goods from a multitude of sellers. Being online means that a marketplace can be far bigger and offer far more variety than any offline market. It can offer virtual as well as physical goods. And it can sell goods both home-made and from big name brands.

Marketplaces aren’t confined to retail either. Deliveroo in the takeaway sector is a marketplace, Uber in travel is also a marketplace. Marketplaces serve to corral and structure the wide array of choice the internet can offer. And the model of connecting buyers and sellers in this way has become a phenomenon. These marketplaces are experiencing extraordinary growth. E-commerce sales are expected to grow to $4 trillion worldwide by 2020, and 40% of these sales will be through marketplaces.

Payment Challenges

This growth is part of a general trend: the booming sharing economy. Consumers have undergone a huge shift in behaviour and preferences that marketplaces of all sorts are well positioned to take advantage of — consumers want a single place to buy from multiple sellers, not just a single brand, especially those who are browsing on a mobile. We’re not only seeing new marketplaces, but established retailers shift towards the marketplace model.

But these new or pivoting businesses need different payment solutions for this business model to thrive, thanks to the specific challenges that these marketplaces face. The simple buyer-and-seller relationship that an e-commerce business typically has is now much more complex. Marketplaces have a two-sided business model, where they act as a middle man between buyers and sellers. Marketplaces have all of the same challenges as other online stores, such as the number of different methods accepted, currency conversion, and ensuring a good experience, but they also have additional challenges.

They need to have a slick pay-out process to keep sellers engaged and loyal. Payments need to be split correctly where a single checkout involves multiple sellers. And they face types of fraud unique to the sector such as collusion fraud where fake buyers and fake sellers work together to facilitate the sale of non-existent goods and services or using stolen credit cards.

Marketplaces need to onboard sellers, a process that has the potential to be highly manual and time-consuming. This process needs to be compliant with the latest customer due diligence regulations, including obtaining all the right documentation. The regulation issues don’t stop there — under new PSD2 rules, any intermediary handling funds between a seller and a buyer needs a payment institution license. Obtaining this license is no small task, and the penalty for non-compliance is significant.

With buyers and sellers flocking to online marketplaces, these businesses need to focus on providing a compelling experience for both parties and identifying new areas for growth. Payment challenges can impair these ambitions. Furthermore, the level of complexity, especially the need to acquire a payment institution license, is difficult for the business to handle on its own. To address complexity, while maintaining business focus, requires marketplaces to outsource their payments. But is the right technology available?

New Technology for New Challenges

As they step into the marketplace era, this sharing economy business model demands a new approach to payments. Money flow is shifting from one-to-many to many-to-many. Dealing with this new model and meeting these needs means engaging a payment partner as innovative as the businesses they plan to support.

Marketplaces need a payment partner that can assist them with regulatory compliance, provide seamless onboarding of sellers, maximise the conversion from browsers to buyers, manage payments — including holding the payment until the product or service is delivered — and paying out to sellers without delays or high fees.

The needs of marketplaces aren’t being met by many e-commerce payment providers, and growing e-commerce businesses need to focus on meeting their customers’ needs — both buyers and sellers. Without outsourcing to the right partner, marketplaces across Europe and beyond risk being constrained by existing systems, built for a simpler era of e-commerce.

But with the right partner, marketplaces can not only solve these issues, but enjoy additional benefits such as insight into customer payment patterns, decline recovery, and simple refunds to keep both sides of the marketplace happy.

To learn more about marketplace payments download this whitepaper.

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Fraud challenges faced by online travel agents.

Driven by growing consumer desire for convenience, fast access to cheap deals and confidence in ATOL protection, digital travel sales are expected to reach a staggering USD $817 billion by 2020. While growing confidence in Online Travel Agents (OTAs) may be good news for the travel sector, can OTAs themselves have the same level of confidence in their customers?

Within the travel industry, there are unique risks not seen in other e-commerce sectors that need to be mitigated. When comparing the average holiday cost of around $500 per person, before spending money, and the average shopping basket on Amazon in 2016 which was $86, it becomes clear that OTAs are dealing with vastly larger purchases. This poses a greater risk; a single fraudulent transaction can cause far larger implications not only on bottom lines but customer experience and reputation too.

Within e-commerce, providers do not charge customers until their item is shipped. This, of course, carries some risk as the fraudulent activity would not be detected until the item has left the warehouse. However, as goods tend to be shipped quickly, the risk is not carried for long. The scenario for OTAs is unique, customers frequently book holidays far in advance, which means OTAs carry that same risk far longer – in fact, this risk is carried until the day of travel.

This level of risk can pose a serious problem to a business that does not try to mitigate it. OTAs must ensure that their payment providers are using rules such as geolocation and behavioural algorithms, as well as whitelists and blacklists to detect and eliminate fraud. Sometimes though, the best option is not the most advanced. In order to check that the person making the purchase is who they say they are, the best option may be to simply contact that customer.

In today’s digital landscape much is made of consumer’s experiences being as slick and convenient as possible. In this case, OTAs need to acknowledge the fact that travel payments are not the same as other e-commerce payments. Additional fraud checks may irritate a customer buying goods like clothing or food online, but they are likely to appreciate any time taken to ensure a large and infrequent purchase such as a holiday booking is not fraudulent.

This is all food for thought as the new PSD2 regulation requires all purchases over €30 to be protected by two-factor authentication. Exceptions to this will exist and many e-retailers will take advantage of these exceptions to ensure their service is as frictionless as possible for their customer. In order for OTAs to create a secure transaction, they may instead want to fully embrace two-factor authentication, welcoming what other sectors may consider an irritant.

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Retailers look to China to see tomorrow’s mobile payment innovations.

The future of payments has been the subject of speculation for some time. From headlines touting the death of cash, to the latest mobile wallets to cryptocurrencies, yet the real future of payments lies not in a service that seeks to change customer behaviour overnight but one that makes their lives easier.

In recent years, we’ve witnessed a fragmentation of payment methods along geographical lines. Thanks to consumer and commercial choice, technology availability and restrictions, and simple quirks of chance, payment methods that are wildly popular in one part of the world are unheard of elsewhere.

For example, in South Korea & Japan, online payments are often done using a bank transfer, rather than immediately when ordering. Often these payments are made using an ATM. In India, mobile wallets are far more popular than in many other countries, where they remain on the verge of taking off but haven’t quite made it. In China, mobile app services such as Alipay and WeChat Pay eclipse every other method of payment in a society that seems to have bypassed a reliance on cards.

 

Download our infographic: Why WeChat Pay will be the next payment phenomenon in Europe

 

Both Alipay and WeChat Pay services have invested time and money into expanding beyond China’s borders but have not yet seen the same levels of uptake as in their domestic market. Nevertheless, when looking at how mobile payments might progress in Europe, looking at China’s innovation offers valuable clues to how things may progress. Retailers looking to benefit from this innovation and capture the custom of those who are taking advantage of it need to look closely at those markets that are out in front.

China is undoubtedly the world leader in mobile payments, thanks to services such as WeChat aiming to be much more than the chat service than the name suggests. As well as the text messaging, voice calls and image sharing that many messaging services offer, WeChat users can use a Facebook-like service called Moments, register for credit cards and hospital appointments, and even use enterprise services. The app now has 889 million monthly active users, a third of whom spent at least four hours on the app. And the most successful move that the app has made is into money services – 92% of WeChat users use WeChat Pay.

These numbers far outstrip anything in Europe. In 2016 WeChat Pay processed $1.2 trillion in transactions, compared to the $354 billion that PayPal processed globally, and on all platforms. In total, mobile payments in China hit $5.5 trillion in 2016. While there has been some traction in mobile payments in Europe, it lags way behind what’s happening in China. One estimate from Forrester that describes mobile payments as about to ‘take off’ in Europe has the technology reaching $148 billion by 2021 — which pales into insignificance next to China, even when relative populations are taken into account.

Mobile payments in China have worked their way into ubiquity through providing consumers with a payment method that sits within something they already use. Taking WeChat Pay as an example, payments either take place directly from the WeChat app, or using QR codes scanned from within the app. For online payments on a desktop or laptop, scanning a QR code on the screen using the mobile device and entering a pin completes the transaction. This scanning is not limited to online payments. Market stall holders, for instance, can have QR codes ready to scan with a customer’s mobile device, making checkout simple and instant. [potential to insert image here]

SafeCharge has partnered with Tencent Holdings to bring WeChat Pay to all of its European retailers and while WeChat Pay currently has limited traction with European residents, there is one market where WeChat is currently incredibly valuable: tourism.

Smart retailers will see the potential opportunity this market holds. The number of tourists from China is increasing every year, with a recent Counter Intelligence study finding that by 2025, 90m Chinese tourists will visit Europe and that globally, they will spend over $255bn per year. And while tourism is very often about enjoying new cultural experiences, this doesn’t apply to payments. Even the most adventurous traveller visiting exotic locales will be far more comfortable when they are using a payment service they use at home. Being more comfortable means they’re far more likely to buy, and this comfort can be increased by making the price available in their own currency.

For European retailers, mobile payments may currently be a limited channel but WeChat’s story shows how quickly the technology can spread. The ubiquity of mobile and the instant availability of an app means that consumers can get onboard instantly. Retailers that have the ability to accept mobile payments will be ahead of the curve.

WeChat Pay’s efforts to expand outside China’s borders users will continue, and our recently announced partnership is a bold step into Europe. Any merchant that targeting Chinese tourism even a small part of their business will be well advised to adapt. And If $255bn in Chinese tourist spending a year is not incentive enough, the potential for WeChat Pay to successfully expand to non-Chinese users should be.

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SafeCharge Limited is an Electronic Money Institution authorised and regulated by the Central Bank of Cyprus and is a principal member of Mastercard, Visa and Unionpay International (CUP). SafeCharge Financial Services Limited is authorised and regulated by the Financial Conduct Authority as a Payment Institution. Both SafeCharge companies are wholly owned by SafeCharge International Group Limited.