Table of Contents
- How Multiple Payment Methods Boost Conversion Rate?
- How To Implement Different Payment Methods
- Conclusion
With the rapid growth of e-commerce, business is booming. But merchants are still facing an uphill battle. Research shows that 7 of 10 users abandoned the shopping charts before payment was completed, resulting in lost revenue. In today’s circumstances, implementing multiple payment methods can be a game-changer. It can significantly increase conversion rate and improve customer experience.
This article will explore the benefits of offering multiple payment options and how to set them up quickly and efficiently.
How Multiple Payment Methods Boost Conversion Rate?
Offering a variety of payment methods allows customers to select the one that best fits their needs, increasing the likelihood that they will finish their purchase. This is particularly important for some regions’ businesses with a diverse customer base.
Which payment service provider businesses will work with depends on parameters such as:
- monthly payment volume,
- the sector in which it operates,
- preferences of the customer base,
- country of operation.
Developing an effective payment strategy is useful before identifying the different payment service providers to work with. We can explain this situation with a few examples: For example, it would be advantageous for a brand with a young customer segment to offer solutions like BNPL as an option at the checkout step. Similarly, a grocery chain’s ability to take payments with meal/gift cards helps it stand out from its competitors.
Offering different payment methods, of course, has several advantages. Understanding these benefits can help businesses decide which options to provide to their customers.
Offering multiple payment methods can significantly boost conversion rate for several aspects:
Meeting Customer Preferences
Different customers have varying preferences when it comes to payment behaviors. Some may prefer credit cards, while others might opt for digital wallets or buy now, pay later options. By offering a range of payment methods, you can reduce friction at checkout, making customers more likely to complete their purchases.
Cultural differences in different markets also directly affect payment habits. For example, in some countries, payment at the door or bank transfers are more common, while in others credit card payments are preferred.
Therefore, diversifying your checkout process across your customer base and target market increases your checkout conversion.
Increasing Trust
Predictably, providing familiar and trusted payment options can increase customer confidence. Customers who don’t see a trustworthy payment method may abandon their cart. Moreover, international research supports this. It shows that 25% of people will stop shopping if they don’t trust a website enough to give their credit card details. Familiar payment options like PayPal, Stripe, or Apple Pay can assure customers that the transaction is secure.
So, if you are new to the market or your brand awareness is not yet that strong, working with players with a high reputation at the checkout step will help users move through the checkout step with confidence.
Reaching a Global Audience
Payment is a local concept and different regions have different popular payment methods. For businesses with an international customer base, offering localized payment options can be critical.
By adopting these, you take your first step in the market strongly by creating trust in your target audience, leading high volume conversion rate, globally.
Reducing Cart Abandonment Rates
Cart abandonment often occurs at the payment stage, especially if customers need help finding their preferred payment method. The research examined the reasons for cart abandonment behavior under 7 different headings. 4 of these reasons are related to payment processes.
This research shows that 13% of users are discouraged from making a payment when their preferred payment method is not available. This could be due to benefits such as bonuses or points offered by the relevant payer, or it could simply be a behavioral reason. Whatever the case, it’s worth diversifying your payment options.
Not only this research but many others like it show that many steps at checkout can help reduce cart abandonment. Because you can increase the likelihood of your customers completing the checkout step by offering them frequently used payment service providers.
You can check out the first and second parts of our article series, where we give tips on reducing cart abandonment and increasing your business’s conversion rate.
Reduced Process Fees
Of course, reducing payment costs does not have a direct conversion rate-boosting effect. However, working with different payment organizations will help you gain a financial advantage by increasing business turnover as it will increase payment costs.
Different payment methods have varying processing fees. By offering a range of payment options, businesses can be provided with lower fees, ultimately reducing overall transaction costs.
When businesses accept multiple payment methods, they gain leverage to negotiate better rates with payment processors. The ability to switch between processors or methods based on cost-effectiveness can lead to more favorable terms, reducing the overall fees.
However, businesses need solutions to reduce revenue by working with different payment methods. This is where payment orchestration platforms can help. Payment orchestration platforms’ Smart and Dynamic Payment Routing features allow businesses to automatically direct transactions through the most cost-effective payment processors.
This feature dynamically chooses the best route based on factors like transaction type and processor fees, ensuring that each payment is processed at the lowest possible cost. Therefore, it can provide reduced processing fees.
How To Implement Different Payment Methods
Integrating different payment methods separately can be challenging and time-consuming. Each payment method requires its integration, API connections, testing phases, and other technical protocols. Managing these individually may lead to complexity, higher costs, and extended timelines for implementation.
This is where Craftgate payment orchestration comes in as a powerful solution.
Key Benefits of Using Craftgate:
- Single Integration Point: Craftgate consolidates all payment methods under one platform, eliminating the need for multiple integrations. This simplifies the process, reduces development time, and minimizes potential technical issues.
- Scalability: As your business grows and you need to add more payment methods, Craftgate allows you to do so effortlessly through its platform, without the need for additional integrations.
- Monitoring: Craftgate provides a unified dashboard where you can monitor and manage all payment transactions in real-time, giving you complete visibility and control over your payment processes.
- High Volume of Conversion Rate: Craftgate increases revenue by improving payment success rates through smart routing, offering more payment options to increase conversion rate, and enabling a seamless payment experience. It also helps recover lost sales by automatically switching to alternative payment methods when one fails. This leads to higher customer satisfaction and boosts your revenue.
Conclusion
In summary, offering multiple payment methods helps remove barriers at checkout, improves the customer experience, and drives a higher conversion rate.
Managing different payment methods can be challenging, particularly with technical integrations, but payment orchestration platforms like Craftgate simplify this process.
With Craftgate, businesses can easily access a range of payment options, enhancing their ability to boost conversion rates.
Contact us here and find out how we can diversify your payment options to enhance your conversion rate!
