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A brave new world of online payments

The amount we spend online continues to rise as consumers take advantage of the convenience of digital channels. Yet, many shoppers put items in their online shopping cart only to abandon the purchase before completion. Last year, BI Intelligence estimated around $4 trillion worth of merchandise would be abandoned in online shopping carts.

It’s a challenge for retailers and merchants. They need to satisfy customer expectations at every stage of the buying process if a sale is to run through to completion. Central to this is a simple, secure and convenient payment process.

To complicate matters, online shoppers aren’t just browsing from the comfort and security of their home or office; they’re on-the-move, making online purchases through their smartphones. These consumers have particular needs for an enjoyable shopping experience; sites have to be optimised for mobile to meet them. As smartphones have small screens text can’t be too small, a lot of scrolling needs to be avoided and a clear layout and navigation is a must.

The payment process has to be simple and straightforward. Shoppers don’t want to be encumbered by lengthy forms or to feel conspicuous taking out their credit card on the train or in a cafe. A complex, unfriendly, time-consuming payment process will cause shoppers to give up. Their expectation is for speed and ease of use.

The online payment experience, therefore needs to deliver and suit the way people shop online today. It needs to be secure, simple and quick. ‘Single click’ solutions like PayPal’s One Touch are emerging to meet the need. E-commerce company Klarna’s solution simplifies the payment process by asking for only basic personal information (no credit card numbers) and giving customers the choice of making payment after goods have been received.

As online customer experiences get simpler, friction-free checkout gives customers the best possible experience and helps merchants in turn reduce shopping cart abandonment.

With all forms of credit comes risk, to meet the need for simpler payments without increasing business risk, providers of payment services are deploying technology solutions to speed up and improve risk analytics and decisioning.

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