Every experienced merchant knows how important it is to support consumer preferences and an excellent brand experience. But, of course, this isn’t always as easy as it sounds, especially when it comes to the checkout process. Variable costs, a lack of control over the customer journey, slow processes and a lack of flexibility are all issues that come with traditional payments methods. And because these methods weren’t built for the age of ecommerce, they can cause huge hurdles for merchants looking to offer the slick, quick, convenient payments experience that customers now expect.
Even for ecommerce merchants that are relatively young and don’t have to contend with internal legacy technology, they are still faced with the drag of legacy payments types. Our recent research showed that this is costing merchants in several ways.
Firstly, we asked merchants to identify their top payments challenges for the coming years. It was interesting to note that they were all around modernising payments and extending the range of payment methods they offer:
Implementing new payment technology into existing technology platform (40%)
Satisfying local payment preferences with local payment methods (37%)
Diversifying payment methods away from cards (35%)
On a related point, it seems merchants also feel held back in delivering the ideal customer experience they want, because with traditional payment methods – cards in particular – the power isn’t in their hands to do so. In fact, a huge 64% of the merchants we surveyed agree that payment brands have too much control over the customer journey.
It’s certainly true that card payments and other traditional payment types don’t offer the same level of flexibility and customer experience potential as newer digital payments methods. The implication is that this can cause conversion fallout. But the issues don’t stop there. The lack of control that merchants are feeling also extends to the costs of payments.
We explored the issues of card payments with merchants and found that many were confused and dissatisfied with the variables around costs – and they didn’t feel they had much power to change this. For instance:
68% think the variable cost of cards is an issue and creates uncertainty for merchants
65% agree feel they are not in control of their costs and have low negotiation power
On the cost front, our survey also revealed that over a quarter of customer service calls that merchants have to field are refund-related – because the customer is chasing a delayed refund. Unfortunately slow refunds are a painful (and clearly expensive) issue with card payments and manual bank transfers, because the processes behind them are slow.
Online Banking Payments can address many of these challenges. Because they bypass the card payment rails and don’t rely on outdated infrastructure, Online Banking Payments don’t suffer from the same problems. Merchants can retain complete control of the checkout experience, benefit from a simpler cost structure and enable faster refunds, among other advantages. In short, Online Banking Payments can help ecommerce merchants take back control of their payment operations.
If you’d like to dig deeper into the challenges that outdated payment methods are causing for merchants, or explore how online banking payments can offset these issues, download the full report ‘Take control of your ecommerce payment costs’.