Why Online Payments Are the Next Big Thing in eCommerce Innovation
Industry players are on a mission to differentiate themselves, while merchants and consumers are demanding innovative ways to pay for what they buy. A seamless payment experience is becoming more and more important to consumers and therefore merchants as eCommerce continues to be as competitive as ever.
by Ed Whitehead, Managing Director EMEA for Signifyd
Guided by the industry leaders that participated in Signifyd’s FLOW Summit 2022, featuring nearly 300 eCommerce leaders discussing the current state and future vision, we delve into what the innovation in online payments has in store for all industry players.
Industry analysts are seeing the potential of payments for revenue optimisation and seizing on the opportunity. The innovation and excitement of online payments fit just right in the new eCommerce landscape. With customers demanding increased flexibility, user-friendly payment innovation is now an important influencer in eCommerce consumer behaviours.
According to research by S&P Global Market Intelligence, merchants are missing out on $16.3 billion in revenue annually due to false declines and $20.1 billion due to customers’ preferred payment methods not being accepted on retailers’ sites.
Merchants can benefit from a best-in-class fraud solution to help them optimise payments and capitalise on their revenue. The opportunity lies in the middle of the shopping journey. While customer acquisition costs are increasing, fulfillment costs will continue rising, with customers demanding faster and more personalised delivery. The opportunity for value improvement lies in improving user experience while optimising checkout and payments.
Ending the payments’ path to commoditisation
The heart of the shopping journey is essentially the shopping cart. This is a ‘make or break moment for merchants. Whether a customer continues to the final stage of their shopping journey or not will determine the merchant’s revenue.
Samsung Chief Digital Officer Kal Raman and his team adopted a “return on shopping cart” metric. Incorporating big data, it tracks what happens to orders after buyers hit the buy button and place items in carts. It aims to gather insight into how many of them convert, and what happens to those that don’t, and spot opportunities to save those customers for a lifetime.
For a bigger advantage in retaining customers, PSPs need to provide competitive packages of products that offer merchants value extending to their customers.
Nicole Jass, FIS senior vice president of growth solutions product, commented: “The biggest thing in payments is that payments are getting commoditized. The payments piece is like the utility company. We’re the electricity that you just accept comes to your house.”
What FIS, which includes payments provider Worldpay, is doing to break out of the mold is launching its Guaranteed Payments. In partnership with Signifyd which provides a very robust payment fraud solution, Guaranteed Payments will be integrated into the payment stack to provide merchants with higher and guaranteed approvals – a huge challenge and pain point for merchants.
As a first in the industry, this type of innovative collaboration will stop payments from being commoditized. It changes the eCommerce game rules from fighting fraud to approving good orders. That opens doors for customers to try new payment plans without the fear of fraud.
One of FIS’ customers already saw great results from this innovation in online payments. Its approval rate increased by 7%, which turned into $8 million. These are topline results. The hope is that this process will also affect other players, such as issuers, who will authorise more orders when they see they are receiving better quality orders.
With the realisation of how online payments can be optimised, PSPs, merchants, and customers are seizing the opportunity to maximise revenue and provide a seamless customer journey. Online payments are a gold mine for up-levelling the eCommerce game and stepping into the new era of eCommerce innovation.
February 03, 2023
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