09/05/11

By Paul Bridgewater

Economic difficulties have dominated the retail landscape recently, with consumers spending less as they see their salaries shrink against rises in the cost of living. What does this mean for companies with an online presence? You need to work smarter and harder to structure your online environment to not only compete for business but maximise sales. One of the most underrated components in your online arsenal is your payments program. A well-executed payments strategy can turn what is traditionally seen as a cost centre into a revenue driver. To do so, you need to understand your customer better than ever before and mindfully manage your customer’s payment experience.

So where do you start? At a place often overlooked from a marketing perspective – your e-commerce payment program, especially your checkout process. Without the right configuration, payment options and purchase best practices in your checkout, you risk frustrating your shopper and increasing the possibility of purchase abandonment. Research shows, for example, that 30 percent of all shoppers abandon their purchases due to confusing and overcrowded checkout pages which can be further impacted when their chosen and trusted payment options are unavailable. However, these are shoppers who are willing and ready to buy - imagine what could be added to your bottom line if you optimised your purchase process and captured even half of those shoppers.

One of the key checkout principles to live by is to “keep it simple.” Bear in mind, during the checkout process your customer is no longer shopping. Don’t clutter the process with up-sells, bundles, pop-ups and redirects – make the journey to the “buy” button as short, smooth and clean as possible.

To optimise your checkout flow, it works best to use a combination of common sense, best practices and metric-based testing. A/B testing is good for broad, sweeping changes; multivariate testing (MVT) is more appropriate where you’re seeking to identify trends among various consumer segments or when granular insights are important. Dynamic personalisation allows you to leverage your MVT learnings by creating targeted promotions or customised experiences for specific traffic segments.

You can apply the same “keep it simple” strategy to your payment options. When considering what payment options to include in your checkout, a maximum of four payment options is recommended. Your decision on which options to include should take into account:

Your Product – What are you selling – is it a digital or physical product – and how is it going to be fulfilled? Downloaded digital products, for example, will not benefit from a delayed payment method.

Your Price Point – Price points affect the payment methods shoppers will use. No one wants to pay for a £5.00 item with an American Express card or wire transfer.

Geography – Consider where your consumer is located and offer the preferred payment options that are available to them in that region. In Brazil, a consumer is likely to use Boleto Bancario to complete a purchase versus a credit card; a Japanese shopper, by contrast, will use Kombini, which requires them to take a bar code on the “thank you” page to their local 7-Eleven convenience store and pay Yen over the counter.

Your Consumer Demographic – Make sure you are offering relevant payment options for the demographic you are selling to. For example, teenage and twenty-something shoppers are more likely to use PayPal than older customers who prefer credit cards.


When you are strategising about what payment options to offer at checkout, you need to take into consideration that in today’s global e-marketplace, credit cards alone are no longer enough – especially if you want to be successful selling internationally. Today’s global merchant must think in broader terms. The Asia-Pacific region favors alternative payment options which are often only relevant and useable in their domestic countries versus more internationally accepted and recognised brands like PayPal and bank transfers. Cash on delivery is popular in China and India. Many Europeans use online banking as a form of transferring payments (most bank transfers require re-directing the consumer during checkout – a process Europeans are comfortable with, but Americans will often resist). When you plan ahead and optimise for cross border traffic, the end result is broader global reach, better conversion rates and lower cart abandonment.

So how does your checkout process stack up against these payments program essentials? Is it designed to sell – is it leading your customers to the buy button or to abandon the sale? Some simple, but mindful, changes can have a major impact to your bottom line.

About The Author

PAUL BRIDGEWATER is Vice President of World Payments for Digital River (www.digitalriver.com), a leading provider of global e-commerce solutions that builds and manages online businesses for software and game publishers, consumer electronics manufacturers, distributors, online retailers and affiliates.