70% of Online Shoppers Will Leave If They Can’t Pay Their Way

As digital commerce continues its ascent, the nuances of payment processing dictate whether businesses capture or lose customer relationships.

The PYMNTS Intelligence report “Big Three: How Choice, Confidence and Convenience Drive Payments Optimization” reveals that achieving peak payment performance hinges on minding customers’ three C’s: choice, confidence and convenience.

Payments optimization has become a watchword for modern digital businesses striving to maintain a competitive edge, with companies seeking a delicate balance in their payment processes to maximize revenue and consumer engagement. Even minor adjustments to payment processes can yield returns, potentially leading to new customer acquisition, enhanced customer satisfaction and back-end savings.

The report elaborates on how each “C” contributes to optimal payments. Choice is crucial, as customers globally prefer to pay in a manner familiar to them, making diverse payment options a key driver of customer loyalty. Confidence in security is paramount, necessitating anti-fraud measures while simultaneously avoiding false declines, which can impact customer trust and business interests. Lastly, convenience translates to seamless transactions, which are pivotal in attracting and retaining customers, extending beyond initial purchases to include efficient refunds, perks and rewards.

Key data points from the report highlight the specific impacts of these factors:

• For 70% of consumers, the availability of their preferred payment method is highly influential when choosing where to make online purchases. This underscores the direct link between payment flexibility and consumer decision making.
• Forty-one percent of consumers report they will never patronize a brand again after experiencing a false decline. This illustrates the severe and lasting negative consequences of overly aggressive fraud prevention on customer retention and brand reputation.
• Three out of five members of Generation Z indicated they prefer access to flash sales or events over traditional cash back rewards. This signals an evolving preference for innovative perks, which merchants should consider when developing loyalty programs for young demographics.

The report draws on proprietary data and methods to provide actionable insights into the payments, commerce and digital economy sectors. It also highlights specific industry responses to these optimization needs.

Worldpay, which collaborated on the report, is a payments technology company processing over 50 billion transactions annually across 146 countries and 135 currencies. In November, the company introduced a service offering near-instant refunds, available to most shoppers in the United Kingdom using Mastercard and Visa cards.

Tom Essenhigh, vice president of retail and hospitality at Worldpay, says in the report that easy and fast refunds can transform a traditional pain point into a tool for driving customer loyalty and increasing future sales.

Furthermore, the analysis points out that while big-box stores often offer better deals, small- to medium-sized businesses (SMBs) can attract customers willing to pay more (78%) if they offer preferred payment methods, with 42% of Gen Z and 29% of millennials specifically viewing flexible options like contactless payments and mobile wallets as a powerful draw.

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