Voice of the Industry

Moving with the times – best practices to keep pace with changing payment behaviour

Friday 18 September 2020 07:59 CET | Editor: Anda Kania | Voice of the industry

Peter Moedlhammer of ACI Worldwide stresses on offering the right payment methods, providing reliable authentication and anti-fraud services, and making the checkout as seamless as possible, as key aspects in this fast-changing ecosystem

In 2019, we saw a few key trends that have shaped the ecommerce and payments landscape: there has been an increase in mobile commerce and payments, as well as cross-channel commerce. Furthermore, we have seen that the rise of alternative payment methods continued throughout 2019, creating a demand for merchants to offer more payment methods. In 2020, the global pandemic has made it even more important to be able to quickly respond to the changing market requirements on various levels: a service provider needs to offer merchants the most relevant payment methods, have a robust anti-fraud environment, and provide a seamless checkout experience for the customer in order to drive conversion and increase sales.

Changing payment behaviour

Payments have become increasingly digital for years now, and the pandemic has acutely accelerated this trend: in July 2020, YouGov surveyed 2081 UK adults about their shopping behaviour, and found that 63% of their participants have used more electronic payments as a result of COVID-19. 63% of participants used more card payments in general, and 80% used more contactless card payments. Mobile payments are also on the rise: 24% of participants indicated that they used more mobile wallets, such as PayPal and Apple Pay.

Not only are customers using digital payments in-store, they are also increasingly moving to ecommerce for their shopping. 2019 saw a 15% increase in ecommerce payments value compared to 2018, and COVID-19 is further driving people to buy more online, as 21% of the YouGov survey’s participants did more groceries online as a result of the pandemic.

Alongside more online shopping, consumers have adopted other shopping methods as well: according to the National Retail Federation, 50% of consumers have tried Buy Online, Pickup In Store (BOPIS) as a result of the pandemic, and 90% prefer to have the option of curb side delivery.

The increase of online shopping goes hand-in-hand with an increase in alternative payment methods, as we saw significant increases in the use of methods like PayPal, Klarna, ‘buy now, pay later’, and bank transfers to pay online. Offering the right payment methods is key to increasing conversion: according to our research, 59% of customers abandon if their preferred payment method is not offered.

Thus, it is up to the payment provider to offer a broad enough spectrum of payment methods for merchants to be effective.

Fighting bad actors with minimal friction

The growing ecommerce industry also brings with it new fraud-related challenges: through data breaches and developing technology there has been a long-ongoing increase in account takeover fraud, and we saw that through the increase in popularity of click-and-collect as a shopping method, as this type of fraud was the fastest growing fraud trend in 2019. The rapidly changing shopping and payment landscape warrants a dynamic and multi-layered approach to fighting fraud.

Machine learning (ML) models can be a key aspect of a modern anti-fraud solution: as a merchant, you need to know who your shoppers are and many anti-fraud mechanisms cause a lot of friction for the customer. ML models can learn the difference between a good and a bad customer incrementally from historic data and thus provide a smoother experience for shoppers, while not compromising security, which makes it one of the most promising technologies out there.

When selling to European consumers, there is another challenge on the horizon: as of 31 December 2020, the PSD2/Strong Customer Authentication requirement will apply, which will make merchants liable for maintaining low fraud rates. It is the service provider’s task to enable the merchant to do this effectively and have a SCA-compliant solution in place that utilises 3DS 2.0. 3DS 2.0 aims to reduce a lot of the friction brought about by its predecessor, and it can be integrated with a variety of devices, thus driving conversion.

In sum, the digital landscape provides interesting opportunities as well as challenges for merchants. Service providers will have to support merchants by providing dynamic and multi-layered anti-fraud solutions.

Seamless checkout

Finally, we cannot stress enough how important it is for online conversion to offer a seamless experience to your customers. There are a number of things of which merchants and service providers need to be mindful. Firstly, the website needs to be responsive and fast: lacking this, the website will frustrate the customer and they will abandon. Secondly, a merchant needs to provide the option of a Guest check-out – having to create an account is a major reason for customers to abandon.

Thirdly, we have seen that enabling one-click payments through card on file and tokenization for recurring customers, as well as in-app payments can be highly beneficial for any online business. Finally, it can be incredibly useful to offer a customer an alternative payment method after their initial choice fails for some reason. Anything that you can do to retain the customer will be a good investment – improving the checkout to be more seamless can result in a 35.26% increase in conversion, according to research by the Baymard Institute.

In conclusion, during a time where the shopping and payment landscape changes faster than ever, it is key to increase conversion by offering the right payment methods, providing reliable authentication and anti-fraud services, and making the checkout as seamless as possible.

For further information on how to offer a seamless check-out experience and offer the most relevant payment methods, please contact us, and our payment expert will answer your questions.

This article was published in our Payments Methods Report 2020, an extensive overview of what’s new in how people pay in the most relevant ecommerce markets.

About  Peter Moedlhammer 

Peter, in his role as Director, Product Management at ACI, is responsible for defining, positioning, and launching the company’s Secure eCommerce payments solution. Bringing many years of product management experience in ecommerce and payments to ACI, Peter’s primary focus is on how merchants and merchant intermediaries interact with ACI’s ecommerce tools, platform, and value-added products (via the API) to create value and drive business growth globally.



About ACI Worldwide

ACI, the Universal Payments (UP) company, is a leading global provider of real-time, any-to-any electronic payment and banking solutions. Through our comprehensive suite of software solutions, delivered on customers’ premises or through ACI’s private cloud, we provide real-time, immediate payments capabilities, and we enable the industry’s most complete omnichannel payments experience.


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Keywords: ACI, payment checkout, ecommerce, payment methods, customer experience, fraud protection
Categories: Payments & Commerce | Online Payments
Countries: World
This article is part of category

Payments & Commerce