The importance of a customised checkout process

Friday 3 November 2023 10:00 CET | Editor: Raluca Ochiana | Interview

Philip McHugh, Executive Director at FlexCharge, shares his thoughts on the importance of a customised checkout process providing customers with multiple payment methods to choose from.


As consumer behaviour continues to change in 2023 in terms of payment preferences, how important is it for merchants to provide flexibility and a wide array of payment methods, including BNPL and local payment methods?

In ecommerce, the name of the game is converting shopping carts into successful sales. Every day, companies are spending big money on marketing only to see their sales lost during the last mile of the customer journey.

Worse, a declined payment can lead to over 80% abandonment of the merchant site altogether, meaning not only a lost transaction, but also a lost customer relationship. So, the economic impacts are big, and the solution to the problem is not simple. However, the first step to success is to offer a choice.

The more options you give customers, the more likely you will create positive outcomes and better shopping cart conversions. Card payments will remain the dominant choice in the US and most European markets, digital wallets remain a popular option as well, while real-time bank transfer options represent an effective and rapidly growing alternative.

In India and Brazil, local bank transfer solutions have seen explosive growth and market share gains. Alternately, BNPL offers have grown in popularity, especially in select verticals, and in some markets alternate card schemes are critical to success, while e-cash products can help convert previous out of reach customers into new sales. The best online merchants will have a very good sense of how to manage choice with optimal customer user experiences.

With 5 to 25% of online shopping transactions being declined, what are some tactical tips merchants can use to improve their checkout process and deliver a customer-friendly, frictionless experience?

Across the US and Europe, we estimate that over USD 500 billion a year in sales is lost to declined payments, in addition to millions of lost customer relationships. Luckily, there are a series of available strategies, and the first step is to know your data.

It is critical to understand decline codes, re-tries, and customer abandonment rates to properly size the economic impact and upside potential to having a focused payment decline strategy. For a payment provider, this type of insight instantly re-positions you from a processing supplier to a real partner helping a merchant grow their revenues.

Beyond the basic data, the most sophisticated online merchants use a mix of solutions. Tokenization and 3DS 2.0 can certainly help improve acceptance rates and reduce fraud. Additionally, there are multiple companies offering fraud check and chargeback management solutions, as well as a growing number of payment orchestration platforms allowing companies to re-route payments to achieve improved outcomes. The results of the latter can be very positive although integrations tend to be more complex. 

During the checkout process, clients can face various errors, which cause frustration and high cart abandonment rates, leading to smaller revenues. How is FlexCharge’s solution tackling this pain point? 

FlexCharge combines three elements to create a unique and impactful option for merchants to materially reduce payment declines. 

The first is our AcceptIQ platform, leveraging decades of deep credit and data experience along with much broader information, to create a real-time decision engine that instantly evaluates all declined transactions including insufficient funds. 

The second element is our Customer Promise ensuring that customers get the product they want, using the payment type they choose, within the limits they already have, and at no additional cost to them. 

The third variable is our invoice purchasing solution that guarantees the sale to the merchant and eliminates risks for them. The combination of these three factors creates a truly embedded and frictionless platform that tackles all decline codes, giving a merchant certainty and a customer a truly positive outcome. We have seen cure rates of over 30% for merchants that can lead to 10-15% increases in total sales, lower overall cost of acquisition, and higher lifetime values per customer. 

Finally, what’s in store for FlexCharge for the rest of 2023? 

Growth. We are rapidly signing up new partners every week and growing our pipeline for both customer and merchant-initiated transaction types. 

To date, we have evaluated over USD 80 billion in transaction volume and have signed up merchants across multiple sectors in the US market, with plans to go live in Europe this summer.

This editorial piece was first published in the Payment Methods Report 2023, which provides an in-depth overview of the latest worldwide developments in how people pay, the payment methods space, the innovative technologies that these methods work upon, and the best strategies on how to win at conversion and retention.

About Philip McHugh 

Philip McHugh has been an industry leader in payments across Europe, Latin America, and the US for the past 25 years. He was formerly CEO of Barclays Payments, President of TSYS Merchant Solutions, and most recently CEO of Paysafe, listing the company on the NYSE in 2021. He invested in FlexCharge and has taken on Executive Director duties, helping the company to accelerate its growth.


About FlexCharge

FlexCharge is an AI-driven platform that partners with merchants and payment providers to instantly review and recover failed customer transactions at no risk to the merchant and at no cost to the consumer. The platform offers the widest coverage and least friction possible to a merchant. If FlexCharge believes a customer will pay, they take the risk and pay the merchant – guaranteeing the transaction. The customer is subsequently charged at no additional cost. The company is based in the US with product and R&D in Israel.

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Keywords: payment methods, local payment method, payments , ecommerce, BNPL, merchants, marketplace, digital wallet, real-time payments, tokenization, chargebacks, checkout optimisation , growth markets
Categories: Payments & Commerce
Companies: FlexCharge
Countries: World
This article is part of category

Payments & Commerce


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