Supporting local payment methods is a simple and effective way to increase e-commerce conversion rates and reach. So why have so few traders embraced the opportunity to internationalise their business? By excluding certain payment options you are limiting your sale opportunities, because some customers will have no choice but to leave without purchasing what they wanted. You wouldn’t expect merchants to damage their own business in this way, but most online traders are doing exactly that.
Proven Correlation Between Conversion Rate & Payment Method
There is a clear link between conversion rates, customer reach and the right mix of electronic payment methods. 83 per cent of online shopper’s said that being able to choose from different payment methods is important to them, 42 per cent revealed that a wider range of payment options from an e-tailer would result in them spending more.
Alternative payment methods (not made by credit or debit card) have become popular around the world. In 2013 alone, transactions using alternative methods increased by 21 per cent from 2012. This is predicted to soar to 59% of all transaction methods by 2017. E-commerce merchants have to take a number of payment factors into account to ensure the success of their online shop:
- Offer each market its preferred payment methods: Traders must research the most common and popular payment methods in their markets and offer these to customers.
- Know and support the payment preferences of your target group: Aside from regional trends, merchants should consider target group preferences and the suitability of various methods for product categories. Consult studies and surveys to establish payment preferences across countries, target groups and product categories. Competitor research is also worthwhile.
- Ensure your checkout page is clearly structured: It is important that e-tailers offer their customers a variety of payment methods. The ideal choice would be four to six payment methods for that country, target group and product type. With the available options filtered through technical parameters or by providing from a drop-down list depending on country.
It is not about offering vast amounts of payment methods – the key is to find the right mix for each market and target group. In the ideal checkout, the choice of payment methods offered will vary.
Selecting The Right Payment Partner
Discovering the best payment methods for particular audiences can be costly, time-consuming and requires experience. This is why online retailers often turn to payment solution providers (PSPs). PSPs provide a wide-ranging portfolio of payment methods and valuable experience of international markets.
Experience, a large selection of payment methods and a comprehensive portfolio of value generally outweigh attractive fee structures. E-tailers who are expanding their businesses internationally should look closely at the payment issue. Ultimately, this is a defining factor in order to increase reach and conversion rates.