• Elena Bazhenova, Payment Expert at Exactly.com


• 18.08.2023 12:30 pm
#payments

In the world of online transactions, businesses have traditionally placed a strong emphasis on payment fees, often striving to minimise them to maximise profits. 

However, as the digital landscape evolves, there has been a shift in focus towards prioritising user experience in payment platforms. This shift is driven by the understanding that an exceptional user experience fosters customer loyalty, drives repeat business, and ultimately leads to higher revenue in the long run. 

But exactly why should user experience in a payment platform take precedence over payment fees and how can businesses leverage this approach to their advantage?

Understanding the impact of UX

User experience (UX) refers to how customers perceive and interact with a payment platform. It encompasses factors such as ease of use, efficiency, security, responsiveness, and overall satisfaction. An exceptional UX fosters a positive emotional connection with the platform, increasing the likelihood of repeat usage and customer loyalty. Conversely, a poor UX can lead to frustration, cart abandonment, and negative word-of-mouth, potentially causing businesses to lose valuable customers.

Despite the rising financial impact on businesses in a cost of living crisis, studies show that 73% of consumers still favour experience as the most important factor when making purchases, quoting convenience and efficiency as critical factors leading to a purchase. 

Similarly, 20% of consumers mentioned inconsistent online experiences and inefficient technology as a reason for abandoning their purchases. 

So how does this work? For starters, UX and UI can play a key role in increasing your conversion rate. Indeed, Forbes states that “a well-designed user interface could raise your website’s conversion rate by up to 200%, and a better UX design could yield conversion rates up to 400%.”

Reducing cart abandonment rates

The average e-commerce store loses 75% of potential business due to cart abandonment, equating to $18 billion in lost sales revenue each year, high cart abandonment rates are a significant concern for businesses operating in the digital realm and result in loss of business and potential loss of future customers. 

Research shows that a significant number of customers abandon their carts during the checkout process due to a cumbersome payment experience. Every added step and form field slows the user from finishing payment and makes it more difficult. As customers are looking for a simple, convenient process, any additional steps hurt your user experience.

Time-consuming fields, like your birthday and phone number, aren’t essential to buying an item online. For some shoppers, it can be frustrating to have to give all of that information for a single purchase—which is why almost a quarter (24%) of cart abandonment happens because the site asked them to create an account.

The rise of new payment solutions and open banking aims to combat this problem by reducing steps, minimising data entry, and optimising the checkout to make it more streamlined and straightforward, increasing the chances of completing a transaction successfully.

Building the customer base is an end-to-end process

While businesses may initially prioritise payment fees to maximise profits, a focus on user experience can lead to greater financial gains in the long term. Happy and satisfied merchants tend to be more forgiving of slightly higher fees when they receive exceptional service. Moreover, they are more likely to become loyal patrons, generating consistent revenue streams for the business over time.

Building customer loyalty is critical for any business's success. Loyal customers are more likely to make repeat purchases, refer others to the platform, and become brand advocates. When a payment platform prioritises user experience, it creates a positive impression that resonates, encouraging them to return for future transactions. Loyal customers are also less likely to be deterred by competitive pricing or minor fee variations, as their primary focus is on the seamless and enjoyable experience they receive.

In addition to retaining customers, an intuitive and user-friendly payment platform can attract a broader customer base, including those who may not be as tech-savvy. 

Simplicity and ease of use appeal to a wide audience and eliminate barriers that could prevent potential customers from engaging with the platform. A broader customer reach translates to increased transaction volumes and more significant revenue opportunities.

Security leads to confidence

Security is paramount in the realm of online payments. A seamless and secure payment experience fosters trust between customers and businesses, leading to increased confidence in the platform. Users are more likely to share sensitive payment information and conduct higher-value transactions when they are assured of the platform's safety. Prioritising user experience includes implementing robust security measures, such as utilising a secure payment solutions provider to manage data, and encryption, which further solidify customer trust.

Customers expect convenience

With the increasing prevalence of mobile commerce, businesses must ensure that their payment platform delivers a seamless mobile experience. Mobile users expect a smooth, responsive, and hassle-free interface when making payments on their smartphones or tablets. Additionally, a well-integrated cross-platform experience, where users can seamlessly switch between devices while performing transactions, enhances the overall user experience and increases customer satisfaction.

In the dynamic world of online transactions, the focus on payment fees alone is no longer sufficient for businesses to thrive in the highly competitive landscape. By prioritising user experience in payment platforms, businesses can build customer loyalty, reduce cart abandonment rates, enhance trust and security, and differentiate themselves from competitors. 

As the payment industry continues to evolve, businesses that embrace the principle of prioritising user experience will undoubtedly position themselves for long-term success and sustained growth.

For more information on how Exactly.com is improving payments across the world, visit: www.exactly.com.