Voice of the Industry

Meeting consumer payment expectations in the 21st century

Tuesday 8 November 2022 09:00 CET | Editor: Raluca Ochiana | Voice of the industry

Consumer payment expectations are changing, but meeting those expectations is not straightforward for businesses. Manuel Huez, VP of Product at Checkout.com, outlines why businesses need to embrace data to better understand their customers and maximise payments success.


There have never been more ways for consumers to pay than there are now. Cards are still the most popular payment method globally, but there's a range of alternative payment methods increasing in popularity. These include digital wallets, such as Apple Pay and Google Pay, Buy Now, Pay Later (BNPL) solutions like those offered by Klarna and Afterpay and, increasingly, crypto. 

It's not only payment methods that are evolving. The consumers who use them are as well. The preferred payment method of a consumer depends on numerous factors, including where the payer is from, how old they are, and what they’re buying.

How do merchants navigate this complex payments environment? And how do they ensure they're not spending too much time thinking about which payment types to offer and chasing the next hottest method rather than optimising acceptance rates and customer experiences?

Understanding consumer payment preferences with data

There's no such thing as a one-size-fits-all approach that businesses can take with their customers today. Consumers increasingly demand curated experiences from brands they interact with. And those experiences can vary greatly depending on who that customer is. 

The payment methods offered at the checkout significantly impact that experience. So much so that 60% of consumers told us that they would abandon their cart if unable to use their preferred payment method. This number may lead merchants down the path of hedging their bets and offering every payment method out there, but this is probably not the best course of action. Some 52% of consumers will abandon their cart if the payment process is overly complex. It can feel like being stuck between a rock and a hard place for many merchants.

To crypto or not to crypto?

Demand for cryptocurrencies as a form of payment is growing. In a Checkout.com survey, 40% of the 18-35 years-olds said they planned to pay using crypto in 2022. Despite this, crypto still has some way to go before becoming a widely used payment method. The lack of trust and comprehension remains a significant barrier for many consumers, while businesses admit they remain concerned about how regulation will impact the crypto space. 

However, there is a path forward, and it's illuminated by data. Businesses need to be continuously scanning the payment space to understand their customers’ preferences and take a segmented approach to that analysis. Our local payment experts spend time with our customers to study their customer profiles and map them to the broader consumer payment trends we see in the market. This allows us to deliver tailored recommendations to these businesses on what payment methods they should offer based on predetermined consumer profiles. 

Of course, this is not a one-time exercise. Consumer payment preferences are evolving — incredibly fast in some parts of the world like APAC and the MENA regions. Therefore, businesses must continue analysing their data and working with their payments partners to understand what's happening in the market and adjust what they're offering at the checkout accordingly. 

Maximising payment success at the checkout 

Offering the right payment methods to the right consumer at the right time is, and will continue to be, an essential equation for businesses to get right. However, it's only half of the equation. Focus on optimising the performance of their payments is just as important, if not more so.

Payment failure is a risk, no matter what payment method a consumer uses. Our report showed that 33% of UK consumers will abandon their purchase if payment is falsely declined. One in ten will complete their purchase with another merchant. 

Part of the solution to mitigate the risk is, again, data. If businesses can get a granular view into their payments data, they can see where payments fail and why. This empowers them to take affirmative action to prevent payments from failing in the future, including making alterations to what payment methods are offered and where. 

Let’s take the example of a large percentage of consumers that are predominantly using cards on mobile devices but are failing to authenticate correctly through 3DS, causing payments to fail. In this case, a business may want to enable or make their ability to accept Apple Pay and Google Pay more prominent at the checkout, given these have native advanced authentication features. Likewise, if payments are frequently declined due to a lack of funds, a business may consider offering BNPL to recover the sale.

But it's important to note that this data isn't always readily available. Not all payments providers can serve merchants the data they need due to the technical limitations that occur from not owning the end-to-end technology stack. This puts them at a disadvantage against merchants using a full-stack provider whose technology powers the full payments journey. 

Thrive in the digital economy

Businesses should not feel lost in all the talk of payment trends and the complexities that will inevitably arise. Instead, they should consider understanding their customer's payment preferences and try to maximise payments performance. 

At Checkout.com, we make it our mission to enable businesses and their communities to thrive in the digital economy. This inspires us to deliver innovative solutions that flex to your needs, valuable insights that help you get smart about your payments' performance, and expertise you can count on as you navigate the complexities of an ever-shifting world.


BNPL: hype or here to stay?

BNPL is booming. Consumers love the convenience, 0% interest rates and transparent payment plans. Merchants love the conversion, sales and customer acquisition boosts, plus the customer experience and cash flow improvements. 

BNPL is here rather than hype. Yet leveraging it smartly involves tailoring the payment method to your business’ needs and those of your customers. It’s essential to be clear on BNPL fees, break-even points, and sales impact. There are different flavours of BNPL, so ensure that BNPL payment plans match your price points and average basket size. Last but not least, consider how BNPL will affect operational processes such as returns.


This article was first published in Payment Methods Report 2022, the most updated overview of trends and developments in the payment methods space and the innovative technologies that these methods work upon, emerging consumers habits, and strategies on how to win at conversion and retention.

About Manuel Huez

Manuel Huez is VP of Product at Checkout.com, leading the team designing Checkout.com's core network capabilities. Manuel was previously the Co-Founder and Chief Product Officer at ProcessOut, which was acquired by Checkout.com in 2021. 


About Checkout.com

Checkout.com is a global payments solution provider that helps businesses and their communities thrive in the digital economy. It offers innovative solutions that flex to your needs, valuable insights that help you get smart about your payments' performance, and expertise you can count on as you navigate the complexities of an ever-shifting world.

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Keywords: payment methods, BNPL, crypto, cryptocurrency, ecommerce, merchants
Categories: Payments & Commerce
Companies: Checkout.com
Countries: World
This article is part of category

Payments & Commerce


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