Payments and the paradox of choice

Friday 18 November 2022 08:30 CET | Editor: Raluca Ochiana | Interview

American psychologist Barry Schwartz states that eliminating consumers’ choices can considerably reduce anxiety for them. Ognjen Vlačina of INGKA Group explains how this principle applies to payments.


Psychology is all around us – just in different forms and shapes. Daily, there are different situations in which we need to make decisions and show preferences. This can be demanding sometimes, especially in a post-COVID-19 time, when many of us faced anxiety or similar challenges.

In the book The Paradox of Choice – Why More Is Less written by the American psychologist Barry Schwartz, he states that eliminating consumers’ choices can considerably reduce anxiety for them. The book analyses the behaviour of different types of people, divided into two main groups: maximisers and satisfiers. We are scaling from the ordinary to the philosophical challenges of balancing career, family, and individual needs, which has paradoxically become a problem, rather than a solution. So, instead of becoming comfortable with having more choices, we rather experience distress when we’re offered too many options.

Is the situation similar for payment methods?

Anyone who is familiar with the ongoing global payment trends knows that the payment industry went through a phase of fast development throughout the last five years. Most likely, the trend will continue for the following three to five years. Payment methods such as account-to-account payments, instant/direct debit payments, crypto payments, digital wallets, embedded finance, BNPL, Open Banking, and others are creating a powerful, dynamic environment. Stronger fintech presence and change of regulation for API connection, together with lateral increase of ‘green finance’ are also keeping the tempo of changes.

In this context, one of the next challenges related to the payments process is mastering the payment experience. Can we provide personalised payment options based on customer relevance? Could this depend on generation, society, market, retailer, and the goods customers are buying, as well as the quantity?

Customer experience is a hot topic right now, and payments experience in particular can make the difference between a positive and a negative interaction – and every touchpoint is now a potential opportunity for sales, both in the physical and digital world.

What do merchants want to achieve?

The main goal should be enabling companies to serve customers in any possible way, at any given point. Therefore, merchants should be ready to offer proper payment methods and platforms for any relevant scenario to meet customers’ needs. So, the main question is how to avoid an unnecessarily hefty payment process and come up with a relevant mix of payment methods, based on localisation. 

There are numerous ways to bring localisation to your business, and here are some key considerations to be taken into account before choosing the right combination of payment methods.

1. Type of business

It’s relevant to identify your type of business: retail (brick-and-mortar stores and/or online stores), banking, travel, gaming, entertainment, and so on. Once you know this, it will be easier to narrow down the way forward. Aim to create a good benchmark on the market, if possible.

2. Market size

Based on the size of the market you operate in, you might want to consider the required investment in the payment mix or in new payment methods, as well as the potential return on investment from it.

3. Market maturity

What is the technology level of the targeted market? Clear differences can be seen all over Europe, but also across Asia, Africa, and the Americas. When searching for a market’s level of maturity, consider the local characteristics, including cash on delivery and local payment methods, while also taking into account its openness or its conservative views, whether cards or digital wallets are dominant, and how accustomed people are with using QR code payments, for instance.

4. Market insights

Which source are you using for market insights – and what do they say? To get the proper insights on a market, it is best to look for domestic reports conducted by regulated financial institutions, and the Central Bank is a good starting point. Additional statistics may give you a further opinion on the business climate and show relevant international companies in the area, as well as the strongest local competitors.

5. Available payment options

What are the common payment options that most competitors offer? Do you have any customer feedback regarding these? Take this opportunity to apply hygiene factors and consider the minimum expectations that people have regarding payment options.

6. Cost and duration of new payment methods implementation

What are the costs of implementing payment methods such as cards, instant payments or direct debit, digital wallets, crypto, BNPL, customer finance, and so on? What would be a realistic calendar required for their implementation? Take into account that not all available payment methods have the same price for merchants, so a smart decision would be to research market preferences and avoid adding extra payment methods that are not relevant to the demographic. Additionally, apart from the implementation, also consider UX, refunds, reconciliation, and the chargeback process within every payment method.

7. Expected benefits

While also taking costs into account, what are the expected benefits of the initial payment set up/ payment mix? How are you measuring and monitoring this? Is there a ‘red flag’ for some of payment methods?

8. Metrics

Which metrics can you use to measure payment penetration, user experience, efficiency, and expenses? Do you have any integrated payment analytics with order management analytics and the necessary tools to measure this interconnection?

9. In-house or outsourced solutions

After you decide on what you will offer to your future customers, you also need to understand how to implement it. Will you do this in-house or outsource it? Do you have the necessary resources, time, and knowledge to do it in-house – or will you rely on external experts, which would translate into higher costs?

10. Taking the pulse of the customers

Sneaking around the market and talking to people, especially young consumers and merchants, will give you a thorough understanding of potential pain points, trends, and expected benefits. Stepping into your customers’ shoes will provide you with a ground check of the raw market and its challenges, opportunities, and trends. This is irreplaceable in the overall process of preparing, assessing, and implementing a new payment strategy in a particular market.

Finally, implementation is the key. Measuring effects, assessing success or failure, noting key learnings, and making a plan for needed corrections all represent crucial steps for further improvement. Consider the first six months as the required checking point – and reassess your business plan, implementation, and potential challenges after this period.


  1. The Paradox of Choice (

  2. Key Benefits of Multiple Payment Gateways (

  3. The Paradox of Choice (

This interview 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 Ognjen Vlačina 

With over 15 years of experience in retail, banking, and the financial industry, Ognjen is a passionate payment enthusiast at INGKA Group. Together with colleagues, he is breaking the payment dogmas, listening to customers’ needs, participating in setting global payment trends, and creating a positive payment experience. His expertise lies mostly in multichannel payments, new projects implementation/sourcing, collaboration with PSPs, commercial banks, and payment networks.



Driven by the IKEA vision to create a better everyday life for the many people, Ingka Group brings the IKEA brand to millions of homes. Since being founded by Ingvar Kamprad, we've been united by our culture, values, and entrepreneurial spirit. And as we grow, we make it easier than ever before for the many people to afford a better life at home.

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Keywords: payment methods, merchants, IKEA, marketplace, retail
Categories: Payments & Commerce
Companies: IKEA
Countries: World
This article is part of category

Payments & Commerce


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