Voice of the Industry

New report: debit, biometrics and faster refunds are vital to meet shopper expectations

Wednesday 24 March 2021 10:41 CET | Editor: Claudia Pincovski | Voice of the industry

William McMullan of Trustly points out the results of their survey which shows how checkout factors like payment types, authentication, and the refund process can influence consumers’ buying process

Ecommerce merchants spend a lot of time and resources on attracting customers and enticing them to buy. Yet a poor checkout experience can undo all of that good work in seconds, causing costly cart abandonment levels. With competition fiercer and customer expectations higher than ever, merchants simply can’t afford to deliver a sub-par experience at any point in the customer journey.

Measuring the experience gap

Trustly recently conducted a survey of 10,000 consumers across Europe to find out exactly what their expectations and experiences are when it comes to a range of checkout factors: payment types, authentication, and even the refund process. In the resulting report ‘Creating more value at the checkout’ we dug into some of the key themes from this survey and unpacked how this can help merchants to shape their payments strategies.

Demand for debit

One of the biggest trends we found was the rising demand for debit, with 64% of consumers saying they preferred to use debit options when paying online. In fact, consumers in all 10 markets we surveyed preferred debit to credit. There were also some consistent motivators among consumers who opt for debit:

● 61% find it more convenient to pay immediately and not have to think about an invoice that will appear later;

● 56% want to be in control of their spending.

While this shift to debit was already a growing trend, the global pandemic has undoubtedly accelerated this change as shoppers have needed to become more budget-conscious. With many consumers looking to take better control over their finances and steer clear of debt, debit has become the go-to way to pay.

Trust and friction at the checkout

Getting the payment page right is critical since it is the point of sale or loss. Research shows that over 87% of online shoppers will abandon their purchase if the checkout process is too long or too complicated. They expect the payment to be the easiest part – fast, secure, simple, convenient – as a minimum.

Unfortunately, complicated processes are still commonplace – including redirects and unnecessary steps in the checkout process – problems which are not going away anytime soon. Trustly’s survey highlighted some of the continued problems around the checkout experience and what impact they have on customers’ perceptions and the likelihood of making a purchase. For example, 45% of consumers said that additional checkout friction would have a negative effect on their overall willingness to shop online.

The report illustrates that there is also still a huge issue when it comes to creating a checkout experience that customers trust. Over half (56%) of the consumers we surveyed said they’ve aborted a purchase due to not trusting an online store with their card details, and 36% don’t trust websites for high value transactions.

Reviewing refunds

Shoppers’ expectations are not limited to the point of purchase, or even the point of receipt – they extend to the refund process too.

Our previous deep-dive on refunds highlighted that prompt refunds are often rare; 69% of consumers reported waiting for four or more days to receive a refund payment and 36% wait over a week.Our latest survey showed just how much of an impact that is having on sales. For example, 7 out of 10 consumers said they wait for their refund to arrive before making a new purchase – a trend which is even stronger among younger shoppers, reaching as high as 80% in the 16-24s age group.

Worse still, 52% of shoppers in our survey said they were willing to spend more – an average 23% more – if they knew faster refunds would be available in the event they needed to return something. It is clear from these trends that delayed refunds are likely to be costing merchants more than they think.

The potential of Online Banking Payments

Against these challenges, there is the opportunity to use Online Banking Payments to enhance the customer experience. Compared to traditional payment methods, Online Banking Payments can offer the speed, simplicity, and security that consumers crave. They are also the ultimate frictionless debit option because, unlike debit cards or manual bank transfers, they use real-time payments to move money instantly.

Familiarity can be a key factor in building trust and Online Banking Payments can offer another advantage here in addressing the customer experience gap. Online Banking Payments can offer a familiar, trusted way for them to complete a transaction, including the option to use biometrics – something that 38% of consumers in the survey chose as their preferred authentication method.

If a merchant is using a full-service payment provider, they can support pre-populated data fields at the checkout, so the customer has to take very limited steps in the payment journey. These ‘gold standard’ payment providers, like Trustly, can also support instant, automated refunds and reconciliation, to help merchants deliver an enhanced customer experience across the full customer journey, as well as supporting better cash flow visibility for the business.

CTA: Trustly’s report ‘Creating more value at the checkout’ is available for download now.

About William McMullan

William is the Director of Sales and Account Management for ecommerce merchants. William and his team are helping merchants across Europe use PSD2 and Open Banking to reduce the friction in payments. He has over 20 years of experience in sales leadership roles. From Planet, Global Blue, eBay, Western Union, and now at Trustly, William is fascinated about all things retail.

 

About Trustly

Trustly is the leading global Online Banking Payments provider. It has a unique transatlantic coverage, enabling 525 million consumers banking with 6,300 banks across Europe and the US to pay directly from the bank account. Trustly offers services to 8,100 merchants in ecommerce, travel, financial services, and igaming. Trustly has 450 employees across offices in Stockholm, London, Cologne, Barcelona, Helsinki, Lisbon, Malta, Redwood City, and Vitoria.

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Keywords: report, biometrics, ecommerce, merchants, refund, coronavirus, Open Banking, digital payments
Categories: Payments & Commerce | Online Payments
Countries: World
This article is part of category

Payments & Commerce