4 ways you can optimize payments for your online store
The following is a guest post (contributed article) by John Rampton, founder and CEO, Due.
It’s no secret that we’re moving more and more towards a digital economy. That being said, any online business owner should be focused on creating the best possible shopping experience for their customers. What’s a good place to start? Payments!
The quicker you can get a satisfied customer through your checkout flow the better. Here are four strategies you can use to optimize payments for your online store.
1. Use the Right Payments Platform
The world of payments is quite complex. Your average customer probably wouldn't be able to tell you what happens to their credit card info once it’s entered into your checkout. Needless to say, there’s quite a bit that goes on and quite a bit that can go wrong. That being said, choosing the right payments platform is imperative when looking to optimize the payments experience for your online store.
There are easily hundreds of payments providers to choose from, so make sure you’re taking the necessary steps in picking the right online payments solution for your business. Here are three to start:
- Integration: The majority of the top payments companies will offer sufficient documentation that allows you to easily integrate your website with their payments solution. Some may even offer public API’s so you and your development team can scope out the work before contacting the company.
- Compliance and Security: When dealing with payments, you want to make sure your business is following industry standards in compliance. PCI compliance is the credit card industry’s set of security standards that ensures secure transactions. PCI compliance has a tiered structure from one to three. Make sure you are partnering with a payments platform that is both secure and fully compliant.
- Rates: Overall processing rates vary quite a bit across companies. Some may offer flat rates, some monthly fees, and some may offer both. Take into account your expected volumes in dollar amount and number of transactions to get an idea of your processing expenses.
These are just a few tips that will help business owners choose the right payments platform. Its important to evaluate the specific needs of your business and make that clear when talking with a potential solution.
2. Seamless Checkout Experience
User experience can seriously make or break a business. If you own an online store, it’s in your best interest to get your customer through the checkout flow as quickly as possible. Here are a few ways you can streamline that process:
Don’t try and “reinvent the wheel”: You don’t need to be an expert UX designer to be able to implement this strategy. Do some research and find 5-10 online stores who have a seamless checkout flow. Pull your favorite elements of each and do your best to implement those into your own flow.
A/B Testing: In the end of the day, you’ll need to let your users decide what’s best. If you’re stuck between a few options go ahead and rotate the different flows. Keep track of relevant data points like conversion rates and overall traffic so you can ultimately decide which one to use.
One-click payments: This is a great method because it not only simplifies the checkout experience but also incentivizes repeat customers. Allow your users to create an account, preferably after the payment confirmation, so their information can be stored for future purchases.
3. Incentivize Effective Risk Management Procedures
The Global Fraud Index, a PYMNTS/Forter collaboration estimates that the fraud attack rate for digital goods has tripled since Q1 of 2016. As more innovations in payments come to fruition so do the cyber attacks on digital goods. That being said, it’s imperative that you implement strong risk management practices to ensure your customer data is secure. Here are a few initial steps you can take to mitigate credit card fraud as much as possible:
- Secure Sockets Layer (SSL) Certification: This essentially guarantees that the data exchanged between your store and your customer’s device is kept away from fraudsters. Websites with SSL certification typically advertise this with an icon of a padlock next to the address in the URL. When customer’s see that icon, they are more confident when shopping at your store.
- Encryption and Tokenization: These technologies keep your customer data protected while it’s being transacted and stored.
- Do Your Research: There’s tons of information readily available that points to strategies fraudsters will typically use and how to avoid them. Educate yourself on these practices so you know exactly what to do when the time comes.
4. Customer Loyalty and Rewards Programs
Its no secret that customers are more likely to become a repeat shopper if they can earn rewards and or loyalty programs. For this strategy to work, you’ll need your customer’s to create an account with your store. This is a tricky one and online merchants often make the huge mistake of giving the customers the option before the checkout flow.
The best place to incentivize your customer to create their account is right before they complete the payment. Offer an initial discount of 10-15% on their first purchase if they sign-up and show the deduction on their receipt. Additionally, you can show them the number of rewards or loyalty points they’d be earning from the purchase. The discount enough will incentivize most shoppers to create their account, with the loyalty points being a huge plus.
For online business owners, failing to convert customers at your checkout page severely hurts your bottom line. Since you’ve already invested tons of time and money trying to attract customers to your store, you ought to focus on increasing those conversions. Use these four tips to optimize payments for your online store so you can get your customers “through the line” and paid.
About the Author
John Rampton is an entrepreneur, investor, online marketing guru, and startup enthusiast. He is the founder of the online invoicing company Due. John is best-known as an entrepreneur and connector. He was recently named #2 on Top 50 Online Influencers in the World by Entrepreneur Magazine and a Blogging Expert by Time. He currently advises several companies in the San Francisco Bay area.