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3 Ways Payment Providers Can Optimize Your Ecommerce Revenue

23 February 2017  |  22215 views  |  0

Global E-commerce growth continues to outpace the entire retail sector. In 2016, eMarketer research estimates that total sales were worth around $1.9 trillion, up 6 percent from the previous year.

Despite economic uncertainty in the US and Europe, lower oil prices and negative currency movements, E-commerce sales for the Holiday Season - November and December - exceeded $110 billion in America. Cyber Monday was bigger than ever in 2016, with Adobe estimating $3.3bn in a single day, with subsequent holiday shopping days worth over $1bn in online sales. Once again, these figures beat previous years and claimed a higher percentage of retail revenue, up 13 percent from the same season in 2015.

eMarketer research expects growth to continue, exceeding $4 trillion in 2020, with Ecommerce responsible for 14.6 percent of retail sales that year. These figures do not include travel, event tickets and online restaurant/fast food orders. Mobile commerce (mCommerce) generated over 50 percent of retail web traffic and 30 percent of online sales in December 2016, according to Adobe Digital Insights.

Online customers expect quick, convenient and secure service, increasingly tailored to their needs and preferences. Ecommerce brands that can deliver will win, big style. Payment providers play a vital role in this space. An effective payment solution can support revenue optimization and customer satisfaction. Pick carefully. Here are three things to consider going forward.

#1: Security Innovation: Biometrics and Selfies?

Cyberattacks are on the rise. ATLAS, a collaborative network of 330 online service providers, have recorded 124,000 cyber attacks per week over the past 18 months, a 73 percent increase in 2015 volumes. When shopping online, 17 percent of consumers will abandon a cart if they are unsure about security, according to Statista data. Cart abandonment rates are on the increase, currently at 69 percent, according to the most recent figures from The Baynard Institute, based on 37 different studies.

Do you really want to miss out on customers because your security was not up to scratch? At a minimum, a payment provider needs PCI DSS security compliance. Taking security to the next level means exploring new options, with fingerprints a popular new choice, especially for M-commerce retailers. Selfies are another option, trialling in Europe since October 2016.

For Ecommerce brands with over 50% smartphone traffic or those with a Millennial customer base, you should evaluate security options that reduce risk and serve your customers needs more effectively.

#2: Reduce fraud and chargebacks 

Fraud liability has shifted over the last few years. Now, since EMV rollout in the US, the liability - and potential impact of chargebacks - rest on the party with the weakest security. Merchants could easily find themselves responsible for fraud, which also falls on the payment providers to ensure those charges don't impact their clients.

There are numerous ways to prevent fraud and mitigate the risks. All E-commerce transactions involve a Card-Not-Present (CNP) situation, which traditionally, is higher risk. Ensuring your payment provider puts basic measures in place, including an Address Verification System (AVS) and Card Verification Value (CVV) - the three-digit code on the back of a card - are vital for reducing the risk of fraud. It is also worth signing up to 3D Secure, an authentication system operated by Visa, MasterCard, and other major card issuers.

#3: Continuously refine the checkout process

Extra steps, unnecessary input fields, and unexpected costs reduce conversion rates. Right now, 69 out of 100 web visitors abandon carts. Ecommerce brands that succeed work with payment providers to ensure the checkout process for guest shoppers and accountholders is smooth.

Test and test again, on every device. Spot a problem or something that keeps tripping customers up? Solve it. Every extra conversion is more revenue. There are examples, when a payment provider, working with a European Ecommerce brand generating over $10 million annually increased revenue 37 percent in six months with numerous conversion optimization changes in several major markets.

When it comes to your checkout - especially on mobile devices - never stop measuring and optimizing.

Key Takeaways:

  • Cyberattacks are on the rise. When you have a lot of mobile customers, consider innovative ways to stay safe, while also giving them ways to authenticate payments that feel natural, such as fingerprints or selfies.
  • Reduce the risk of fraud, with PCI DSS compliance and other safeguards through your payment provider. The result: Less fraud, lower chargebacks, more revenue.
  • Optimize your checkout. Amazon, Boohoo, ASOS and other major online retailers are the leaders of the pack. But at the end of the day, they face the same checkout problems as everyone else. They never stop measuring, testing and implementing changes: So neither should you. Customers will reward you with higher basket values and lower abandonment rates once you implement a smooth checkout process for the web and mobile devices.
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