Online Merchant Checkout Innovation Report

Australian Merchants’ Checkout Tech Requests Focus on Security

January 2025

eCommerce merchants in Australia identify mitigating fraud and boosting conversion as the top reasons they request new technologies from their payment service providers (PSPs).

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    PYMNTS Intelligence surveyed 300 middle-market eCommerce merchants across five countries — Australia, Brazil, the United Arab Emirates, the United Kingdom and the United States — to explore the role of technology in the user experience during checkout. The study revealed that most middle-market eCommerce businesses struggle more with the user experience during checkout than with the back end of payment processing. Accordingly, merchants indicated a strong demand for technologies that enhance the user experience during checkout, particularly one-click technologies.

    Drawing from the study, this series of data briefs examines how merchants in each country view the role of payment service providers (PSPs) in the user experience during checkout. This edition looks at Australia, where more than 2 in 10 eCommerce merchants report struggling with the user experience during checkout. This share is notably lower than in other countries.

    In Australia’s eCommerce sector, optimizing checkout processes is vital for enhancing customer satisfaction, increasing conversion rates and combating fraud. In fact, nearly two-thirds of Australian merchants have asked their PSPs to implement new features or functions to mitigate fraud. Their most frequently requested features include one-click options, secure card on file and biometric authentication. What these technologies have in common is their ability to secure and streamline the checkout process, ultimately boosting conversions.

    These are just some of the findings explored in “The Role of PSPs in the Checkout Experience: Australia Edition,” a PYMNTS Intelligence and Mastercard collaboration.

    Fraud Mitigation Drives Technology Requests

    Mitigating fraud is the top priority for Australian merchants requesting new technologies from their PSPs.

    Merchants in Australia are driven by several factors when requesting technology updates from their PSPs. A significant portion (63%) are motivated by the need to reduce fraud when asking their PSP to update technologies. In fact, 27% cite mitigating fraud as the most important reason. Meanwhile, 49% want higher conversions and an enhanced user experience during checkout. Additionally, 49% of merchants said the price of new technologies is a key factor when deciding which features to integrate. Limiting chargebacks was a key driver for 44% of merchants.

    These priorities reflect a strategic balance between enhancing the shopping journey and protecting revenue. Fraud reduction remains paramount due to the significant costs associated with chargebacks, such as lost revenue and reputational damage. At the same time, enhancing the customer experience caters to digital-savvy shoppers’ expectations for a convenient shopping experience. Focusing on higher conversions addresses one of the most immediate business goals — ensuring more shoppers finalize their purchases.

    Having to Request Updates Introduces Friction

    Just 18% of Australia’s merchants receive automatic updates from their PSPs, and so many rely on requests for feature upgrades.

    Upgrading payments and checkout technology is essential for eCommerce merchants looking to remain competitive. The good news is that 82% of merchants in Australia indicate they can request new technology from their PSPs.

    Even with such a high level of access, merchants in Australia are split into two roughly equal camps. While 52% of merchants in Australia have asked their PSPs for new features and upgrades, 48% have not. The difference can be attributed to a lack of awareness, but also to a lack of resources or expertise needed to be proactive in monitoring new payments and checkout technologies. These findings underscore how important it is that PSPs communicate effectively with merchants and actively offer to collaborate.

    But now the bad news. One significant challenge merchants in Australia face is the reported low prevalence of automatic updates from PSPs. Just 18% of respondents indicated that their PSPs automatically implement updates for new checkout payment technologies. Most must manually request upgrades. This places the onus on businesses to stay informed and proactive about advancements.

    In the other four regions in our study, automatic updates are more common. As a result, Australian merchants may inadvertently delay the adoption of innovative technologies, potentially hindering their ability to compete. PSPs looking to capture greater market share could automatically roll out updates and advertise that fact.

    One-Click Convenience on the Rise

    One-click checkout and card on file top Australian merchants’ list of most-wanted technologies.

    When requesting technological updates, merchants in Australia prioritize solutions that improve checkout convenience and security. The most frequently requested features include one-click checkout (28%), card on file (20%) and secure card on file technologies (18%). Additionally, advanced capabilities like biometric authentication and tokenization are gaining traction, reflecting a growing interest in cutting-edge solutions.

    The focus on one-click and card on file solutions demonstrate a clear push towards user-friendly payment options that reduce friction and improve the likelihood of completed transactions. Secure card on file technologies cater to both convenience and data protection needs, addressing consumer concerns about privacy. Adopting these technologies helps merchants remain competitive while offering a superior user experience during checkout.

    How Australian Merchants Choose Their PSPs

    Australia’s merchants value PSPs that offer their customers a reliable and secure user experience during checkout.

    For eCommerce merchants looking to drive customer engagement, choosing the right PSP remains central. When asked about the benefits they gain from using their current PSP, the top selections among Australia’s merchants were that their payment processing solution is easy to work with (54%), widely available (52%) and easy to implement (48%). This suggests that merchants are relatively satisfied with the overall level of service they receive from their PSPs.

    Moreover, 48% of merchants in Australia believe that their PSPs help them create an easy and convenient user experience, while similar shares say then benefit from better approval rates (48%). In other words, merchants in Australia want PSPs to provide their customers with a streamlined and trustworthy payment experience, one that increases sales and lowers cart abandonment rates.

    Meanwhile, merchants in Australia also rank cybersecurity among the top benefits PSPs provide. In fact, 46% cite lower rates of fraud and 44% cite better data security measures. Another 38% say their PSPs help reduce false declines. A notable gap is in Australian merchants’ trust in the payment acceptance method, however, with just 30% citing this as a benefit. These findings suggest that merchants in Australia value PSPs capable of supporting diverse transaction needs while maintaining high security and usability standards. PSPs that provide reliable systems, easy integration and strong fraud protection are better positioned to meet these expectations.

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    Methodology

    The Role of PSPs in the Checkout Experience: Australia Edition,” a PYMNTS Intelligence and Mastercard collaboration, is based on a survey of 300 merchants with strong eCommerce businesses generating $10 million to $1 billion in annual revenue from five countries: Australia, Australia, the UAE, the U.K. and the U.S. The survey was conducted from Sept. 18, 2024, to Oct. 9, 2024.

    About

    Mastercard powers economies and empowers people in 200+ countries and territories worldwide. Together with our customers, we're building a sustainable economy where everyone can prosper. We support a wide range of digital payments choices, making transactions secure, simple, smart and accessible. Our technology and innovation, partnerships and networks combine to deliver a unique set of products and services that help people, businesses and governments realize their greatest potential.

    PYMNTS INTELLIGENCE

    PYMNTS Intelligence is a leading global data and analytics platform that uses proprietary data and methods to provide actionable insights on what’s now and what’s next in payments, commerce and the digital economy. Its team of data scientists include leading economists, econometricians, survey experts, financial analysts and marketing scientists with deep experience in the application of data to the issues that define the future of the digital transformation of the global economy. This multilingual team has conducted original data collection and analysis in more than three dozen global markets for some of the world’s leading publicly traded and privately held firms.

    The PYMNTS Intelligence team that produced this report:

    Scott Murray: SVP and Head of Analytics
    Lauren Chojnacki, PhD: Senior Research Manager
    Margot Suydam: Senior Writer
    Matthew Koslowski: Content Editor


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