Voice of the Industry

Online payments: from obstacle to opportunity

Friday 23 August 2019 08:35 CET | Editor: Melisande Mual | Voice of the industry

If the checkout has become the bane of your existence, Luke Flomo of Trustly shows retailers how to best leverage online banking payments for a better customer experience

It’s a familiar story: online retailers invest massive resources to lure shoppers to their site, and streamline the shopping experience, only to have roughly 7 in 10 of them jump ship when they get to the checkout.

While many of these flighty shoppers are ‘just browsing,’ with no intent to buy, those that intend to make a purchase still abandon their carts for various reasons, from unexpected extra costs (55%) and a lengthy checkout process (26%), to being required to create an account (34%) or the lack of their preferred payment method (6%).


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As a result, the checkout has become the bane of online retailers’ existence – that last hurdle in the purchase process. But what if online retailers stopped thinking about the checkout and the payment step as a hindrance, and instead started thinking of payment processors as an ally that can deliver a treasure trove of data to be used in order to simplify the shopping experience?

Online banking payment providers to the rescue

By adding an online banking payment option to the checkout, for instance, online retailers can eliminate many of the main reasons for cart abandonment, and ultimately increase conversion.

Off the bat, 6% of shoppers report that they abandoned an intended purchase because there weren’t enough payment methods. Often times, online retailers assume that offering payment by credit card is sufficient, but with the rise of alternative payment methods, shoppers expect to be able to pay in whatever way they prefer, whether it be by invoice, e-wallet, or directly from their online bank. 

The payment alternatives they want often vary across markets and industries – in Finland, for example, roughly 40% of shoppers prefer to pay directly from their online bank, while in the US shoppers prefer to pay by card. Understanding these localised preferences is key to optimising your checkout and reducing cart abandonment.

Ultimately, offering choice is king. According to a study conducted by PYMNTS.com, the best performing online retailers have more payment methods in their checkouts: while the weakest performing retailers in the study offered an average of 1.4 payment methods in their checkouts, the best performing retailers supported an average of 8.2 payment methods.

Polishing the shopper experience

Beyond simply offering more choice, online retailers that add online banking payments to their checkout can drastically decrease abandonment due to other reasons, too.

How, you ask? An estimated 18% of shoppers drop out of the purchase process because delivery is projected to be too slow and another 11% due to the fact that the returns policy isn’t satisfactory. But online retailers that offer online banking payments through a full-service provider like Trustly, rather than a traditional bank payment option, can receive instant notifications when a payment has been made, letting them ship goods faster with greater confidence.

Retailers can also offer instant refunds, which can drastically improve the return experience. In fact, according to a recent study conducted by Trustly, 69% of shoppers reported waiting four or more days for a refund, but 58% of shoppers agreed they would spend more and 56% would shop more frequently if offered faster refunds.

Unlocking data’s potential

But where online banking payment processors can really add value is in the shopper data they can glean during the payment process. Imagine shopping on your favourite brand’s website. You load up your shopping cart, and when it’s time to check out, you simply proceed to the checkout and make a payment through your online bank, which can be as simple as using your thumbprint or facial recognition. That’s it, you’re done, and a few days later your purchases show up at your front door. There’s no need to fill out a long form with your shipping details because online banking payment processors like Trustly can fetch that data during the payment and pass it along to retailers, who can pre-fill the shipping form. Not only that, there is no paying bills at the end of the month or waiting days to see the transaction on your account. The result is a more frictionless experience and fewer drop-offs due to a complicated checkout experience.

Let’s take it one step further. Considering that an estimated 34% of shoppers drop out during the checkout process because they are forced to create an account, retailers could quell that concern by automating the registration process. Using the data delivered by the payment processor, online retailers could create a shopper account in the background with nearly no shopper interaction required. 

This is a concept already revolutionising the online gaming industry, where players don’t need to actively register an account because the operator can easily do so for them. And just like in online gaming, where operators must confirm that their players are of legal age to play, online retailers could confirm shoppers are legal to purchase certain goods, such as tickets for an 18+ concert.

Best of all, there’s no need for the shoppers to remember a username or password because their identity is confirmed when they verify themselves through making an online bank payment using two-factor authentication. By delivering this data, payment processors can help online retailers know their shoppers better, which could also inspire better retargeting and personalised recommendations.

This editorial was first published in our Payment Methods Report 2019 – Innovations in the Way We Pay, which provides a comprehensive overview of the up-to-the-minute trends, updates, and innovations in the payments space worldwide, depicting the key developments in the way people pay.

About Luke Flomo

src=/images/luke-flomo(1).jpgLuke Flomo is Head of eCommerce at Trustly and is a payments expert, bringing a wealth of knowledge with his 13 years of experience in the industry. He has worked for the likes of Barclaycard, WorldPay and, more recently, Klarna, where he headed up the Sales and Partner channel.


About Trustly

vspace=2Trustly is a FinTech company that makes online banking payments fast, simple, and secure. By signing just one agreement with Trustly, ecommerce businesses can accept payments from and issue instant refunds to shoppers in 29 European countries, in all local currencies. To learn more, visit trustly.com/ecommerce.

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Keywords: online banking payments, Trustly, Luke Flomo, ecommerce, payment checkout, customer experience
Countries: World

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