With the cost of living crisis continuing to bite, household budgets are getting tighter. Marketing and brand awareness can help retailers to stand out from the competition – but these efforts will be wasted if customers abandon their cart due to outdated payment processes. So how can retailers ensure customers complete the path to purchase?
Andrea Dunlop is managing director at Access PaySuite, which is a provider of payment solutions to mid-sized UK organisations. Part of The Access Group, it combines payments expertise with unparalleled SaaS experience to help more than 5,000 customers across commercial and not for profit sectors improve their payment solutions, providing organisations with the freedom to accelerate their innovation and growth.
Dunlop is highly-regarded in the payments industry. She has been recognised with numerous industry awards, including being named one of the ‘Most Influential Women in Payments in 2018’. She sits on several industry forums including the Payment Systems Regulator in the UK and is also chairwoman of the Emerging Payments Association’s Advisory Board and board member of the European Women in Payments Network.
Passionate about payments, Dunlop is championing and challenging the industry to deliver better financial products for the benefit of all. Talking to The Fintech Times she explains how seamless payments can curb cart abandonment.
Curbing cart abandonment with seamless payment systems
The turbulent economic climate spawned by ongoing global events has certainly kept online retailers on their toes in recent years. From Covid-19 to the cost of living crisis, household budgets have fluctuated and discretionary spending has been particularly vulnerable to the changes.
Today, total internet sales account for 25.3 per cent of all retail sales, compared with 19.1 per cent in February 2020. During the pandemic, online shopping was a necessity – and once physical shops opened again, consumers still enjoyed the convenience of spending money online as retailers raced to invest in the right technology to make it possible.
In 2023, with inflation rising by just under nine per cent, it’s no wonder that many consumers are re-prioritising where they’re spending. Recent figures published by Barclays revealed that essential card spending grew by 4.9 per cent in May 2023. Meanwhile non-essential only rose by three per cent, which is the lowest growth seen this year.
Seamless from start to finish
Around 28 per cent believe they will be spending less, though, and the risk of cart abandonment is growing – according to Statista. Around 80 per cent of all UK orders made on mobile devices at the end of 2022 were not completed. This dropped to 74 per cent on tablet and 71 per cent on computer.
As shoppers prioritise necessity and scrutinise non-essential purchases, reduced consumer spending will invariably have a major impact on retailers, with businesses competing for a slice of the smaller total spend. To succeed in capturing that sale from start to finish, many will be adjusting their marketing tactics to strengthen customer loyalty and boost brand awareness.
There’s huge value in this, but it’s just one part of the retail puzzle. Just as important is investment in up-to-date payments systems that are both secure and deliver a seamless experience.
Safe and secure
When finances are tight, it’s natural to search for trustworthy vendors when choosing where to spend.
Last year, people in the UK lost £1.2billion to fraud, and a report from Capterra found that while 76 per cent of people are somewhat (61 per cent) or very (15 per cent) willing to share personal identification data with an online company they’re doing business with for the first time, this dropped to 55 per cent of people who were somewhat (46 per cent) or very (nine per cent) willing to share financial information.
Offering safe and secure payments is a non-negotiable element of online retail today. Building trust with customers this way could mean the difference between a purchase being made, or choosing to spend with a competitor.
Using an FCA-accredited payments system developed for the retail sector, such as our recent acquisition Pay360, can provide the safeguards businesses are looking for. And with checks such as Know Your Customer (KYC) and Identity Verification (ID&V), you can prevent fraud without disrupting the customer experience.
While businesses are safe in the knowledge that every ‘behind the scenes’ transaction is managed responsibly, other ‘front-end’ features such as branded payment gateway platforms offer users peace of mind that their details will be kept safe when buying from each shop – rather than being redirected to unknown third parties.
Offering new ways to pay
As well as ensuring every transaction is safe, it’s also key to remove any friction and offer plenty of options for ways to pay.
When we released our report, Navigating the Future of Payments, Rich Himsworth, CEO of e-commerce conversion specialists, Salesfire noted how mobile technologies are key to retailers now more than ever. They are driven by improvements in omni-channel payment options such as Apple Pay, Samsung Pay and other digital wallets. He said: “Those who notice and act on this change in consumer behaviour will thrive, with many innovative online retailers reporting a huge decrease in basket abandonment after adopting these mobile strategies.”
Indeed, a Mastercard survey found that more than half of 18-24 year olds in the UK would prefer to carry their smartphones rather than a physical wallet, with around a third stating that this digital wallet is their preferred payment method. By now, most online retailers will use a platform to manage traditional card purchases.
But to keep up with the demands of the changing market they must think beyond the basics and reduce the risk of missing out on customer spending by ensuring their payments platform has omni-channel functionality built in.
Every retail leader will understand the importance of creating a seamless experience for customers. Alongside streamlining marketing, creating new offers and ensuring product ranges are relevant, putting a robust payments system in place is a simple way to build trust with customers and ensure there’s no hesitation when it builds up to that emotional moment of handing over funds.