The belief that power lies with the customer has never been more prevalent than it is now, as companies that fail to offer a variety of payment options, tailoring to the customer’s demands are the ones losing out. A poor overall payment experience will lose out to a stronger one finds Plaid, the open finance data network and payments platform.
A positive payment experience is now an integral part of how customers view online merchants. Nearly two thirds (62 per cent) of consumers would avoid merchants that offer a ‘poor’ payment experience and one in five (22 per cent) would even avoid the merchant even if they needed their goods or services.
Inversely, less than a tenth (six per cent) of UK adults would continue to shop as normal with a company if they experience a poor payment experience with them.
It is not only the quality of the payment experience that matters. Four in five (81 per cent) people feel it’s also important for companies to offer a wide variety of payment options, whether that be buy now pay later (BNPL), or digital payments. Payment flexibility is so significant that a fifth (22 per cent) of people see a lack of choice as a reason to abandon a transaction altogether.
Consumers also increasingly have clear payment preferences. Over a third of people (36 per cent) cited methods that required customers to enter in their personal financial information – such as the long card number on a credit or debit card – as a reason they would abandon a purchase from an online business. Another third (30 per cent) would abandon the purchase due to overly complex identity checks or verifications.
Younger generations, however, have even stronger views over their preferred payment methods. Of those aged 18 – 34, 32 per cent would change their payment method to avoid having to repeatedly enter personal information; 37 per cent for lower fees, 38 per cent for faster transactions and 34 per cent for fast refund times.
The businesses getting payments right
When asked which types of companies offer good payment experiences, consumers ranked food retailers and supermarkets highest. Hire companies and event companies recorded the worst scores.
Keith Grose, Head of Plaid UK, commented: “The growth of eCommerce has been stratospheric in the last couple of years as consumer demand changed almost overnight, and companies move swiftly to adapt to completely new trading conditions. But this has brought a new set of challenges for retailers as consumer expectations rise too. Many merchants will know well that consumers want their payment experience to be as smooth as the rest of the online shopping experience. How people pay is no longer an afterthought, but a crucial part of the customer experience.
“As businesses look to bounce back from the turmoil of the past two years, and support the economic recovery by doing so, they cannot afford to lose customers who’ve seen the benefit of digital innovation and a better way of paying.
That’s why investment into digital checkouts and eWallets is now a core focus for companies, but they cannot go it alone. As such, there’s a vibrant and emerging segment of fintech companies focused on this space.”