Online Retailers May Lose Half of Sales to Checkout Friction

Fifty-five percent of shoppers say checkout friction is frustrating enough for them to quit a purchase mid-process.

That potential lost opportunity could represent a significant share of lost revenue for any eCommerce site, but especially small businesses running on tight margins.

As online merchants evolve their capabilities in the race to match consumers’ demand for a seamless experience, the ability to store payment data has become an expectation rather than an optional bonus.

According to “Payments and Credentials Vaults: Gauging Customer Interest,” a PYMNTS and FIS collaboration, 80% of customers save their payment details online through multiple merchants’ websites or apps to achieve a faster, more streamlined checkout experience.

This means when checkout friction occurs — mostly due to outdated payment details or data theft — there’s a higher likelihood that customers will take notice.

Businesses may be hesitant to overhaul their checkout process in order to offer stored payment capabilities. This could be due to budget constraints or fear of implementation headaches. However, there are third-party solutions available, from authorization optimization to biometrics. Such tools could streamline the process of merchant adoption, while reducing revenue loss during checkout.

Across the ocean, business payments-focused FinTech Adyen is currently offering a solution for the authorization friction that can come with stored credentials. By delivering the Real-Time Visa Account Updater to European companies, Adyen is enabling merchants to boost authorization rates from card-on-file payments by automatically updating Visa accounts, with the goal of reducing involuntary churn.

Another solution that merchants may consider is a payments and credentials vault, which stores and encrypts payment information through a secure app that can be used for multiple merchants.

Two-thirds of surveyed consumers are at least somewhat open to using a vault, and 40% are very or extremely interested. Fifty-eight percent of consumers are at least somewhat likely to switch to merchants that link to a credentials vault. This could be the simplest solution for merchants and shoppers to adopt, as it would provide a mostly all-in-one solution for both parties.

As consumers get choosier about where they spend their money and become less tolerant of pain points while shopping, it is crucial for merchants to minimize checkout friction — whether they update systems through third parties or handle it on their own.