Half of shoppers ditch online retailers due to poor payments processes, new report finds

By Gaia Lamperti

About 40% of shoppers are ditching checkouts with poor payments processes, according to research published today by Vyne, the specialist account-to-account payments platform. Its new report, ‘Retail payments reinvented: how consumer demand is changing’, has found that hidden charges, slow speeds, website failures and lack of security are frustrating online shoppers into abandoning their purchase journey.

The study explores online payments preferences of 2,002 British consumers in the context of the 43% rise in e-commerce sales since the onset of the pandemic. It revealed that just 40% of respondents feel that retailers always meet their payment expectations, while the others are abandoning their baskets at least once a month, citing hidden charges and frustration at inputting lengthy card details as the chief reasons for doing so.

“Online shopping has reached unprecedented levels of popularity, but the payment options at checkout have remained stagnant and stacked against the consumer,” said Karl MacGregor, CEO and Co-founder of Vyne, commenting the study. “Our research has indicated that a poor payments experience could limit growth for many online retailers, with consumers being unafraid to abandon their baskets and shop elsewhere if their expectations for clear, simple payments are not met. Despite the FinTech industry transforming payments processes in recent years, retailers are not keeping pace by adopting these next-generation technologies.”

The research also exposed dissatisfaction with the refunds experience. Over 2 in 5 (43%) respondents who have requested a refund for an online purchase have had to chase for a refund, leaving them feeling frustrated and angry at the retailer.  

British consumers also showed openness and a clear willingness to try new methods of payment. Over 65% of respondents are open to trying out new ways to pay online, with 70% saying that their ideal payment method would offer instant refunds and no ‘pending’ payments. The research also indicated a desire for more transparency with the payments process, in which consumers can instantly see their updated bank balance after making a purchase or requesting a refund.

Having recently secured the largest seed funding round in the UK Open Banking market to date of $15.5 million from leading FinTech investors including Hearst Ventures, Entrée Capital & Triplepoint, Vyne is cemented at the centre of the future of payments. Through this research, Vyne tried to delve deeper into consumer behaviour patterns and draw attention to how current payment systems are stacked against retailers and consumers, putting them at a disadvantage.

Luke Flomo, Chief Revenue Officer at Vyne, added: “It’s time for a more modern, transparent and seamless approach that benefits buyers and sellers in a transaction. Open Banking presents a golden opportunity to overhaul the traditional payments infrastructure that buyers have been beholden to for decades, as well as save retailers from expensive card schemes.”

Key findings of the report:

• 40% of shoppers are ditching websites with poor payments processes at the checkout due to hidden charges and frustration at inputting lengthy card details.
• There is clear dissatisfaction among UK consumers with the online refunds experience, with over 2 in 5 (43%) respondents who have requested a refund for an online purchase stating they have had to chase for a refund.
• British consumers have a clear willingness to try new methods of payment, with 66% of respondents stating they are open to trying out new ways to pay online.