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 with the user experience during checkout more than with the backend 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 the U.S., where nearly 7 in 10 eCommerce merchants struggle with user experience during checkout. The two biggest pain points are the overlapping issues of abandoned carts and long checkout times.
As a result, U.S. merchants are eager to implement technologies to address these issues and improve the user experience, which can ultimately increase conversion. More than three-quarters of merchants have asked their PSPs to enable new features, with one-click solutions and secure cards on file the most frequent requests. Notably, like their counterparts elsewhere, U.S. merchants overwhelmingly indicated that one-click technologies could help speed up their checkouts.
These are just some of the findings explored in “The Role of PSPs in the Checkout Experience: U.S. Edition,” a PYMNTS Intelligence and Mastercard collaboration.
Conversion Rates Drive Demand for New Technologies
The desire to increase conversion rates drives merchants’ requests to their PSPs.
The leading reason merchants request new checkout and payment technologies from their PSPs is to increase conversion rates. Among the U.S. merchants that say they can ask their PSPs to implement new technologies, 44% identified it as the most important factor, and an additional 28% named it as an important factor. These rates are far higher than seen for any other factor, well ahead of other key drivers, such as enhancing the customer experience and reducing fraud. This suggests that U.S. merchants view conversion as the ultimate goal and other areas as a means to that end. PSPs and technology solutions providers should evaluate their marketing and messaging strategies with this in mind.
Merchants Take a Proactive Role
More than three-quarters of U.S. merchants can ask their PSP to add features to boost conversion.
Data shows 78% of merchants in the U.S. report they can ask their PSPs for the upgrades they want. Moreover, 55% say that they have done so. This indicates that U.S. merchants generally monitor available technologies and proactively request the ones they think would be beneficial.
Nonetheless, 22% of merchants do not think they can approach their PSPs for new features or functions. This suggests that many merchants do not know what services their PSPs offer or how to find out. In turn, this means a sizeable portion of PSPs should work to improve how they communicate with and inform their merchant clients about the options available.
One way PSPs can help merchants that want to use new features is to implement them automatically. We find 63% of U.S. merchants say that their PSPs already take this approach. PSPs that offer automatic feature implementation should ensure that their merchant clients know what features they are upgrading and how they add value in increasing conversions. It is also worth noting that while many PSPs implement automatic updates, adding a new payment method is typically opt-in. This means merchants that do not want to include a new payment method can choose not to.
One-Click Solutions in Demand
One-click checkout technologies top the list of requests from U.S. merchants seeking to improve conversion.
Among the checkout and payment technologies merchants have requested from their PSPs, the overwhelming favorite is one-click solutions. In fact, 45% of U.S. merchants have asked their PSPs to provide this type of technology. Merchants view one-click technologies as a potent way to speed up checkouts, improve customer experience and ultimately increase conversion rates.
Secure card on file is the second most requested, with 27% asking their PSPs to implement it, followed by biometric authentication, at 25%. Notably, gateway tokens and network tokens trail further behind, at 22% and 20%, respectively. The fact that relatively few merchants request PSPs provide token technologies may indicate that merchants remain uncertain about the relationship between tokenization and a more streamlined checkout experience.
PSPs Are Missing an Opportunity
Merchants and PSPs should work together to improve conversion, especially in user experience.
PSPs are crucial in helping merchants incorporate new technology into their checkout experiences. However, not all merchants in the U.S. see their PSP as a partner in driving conversion. For example, just 44% of U.S. merchants surveyed believe that their PSP makes the user experience during checkout easy and convenient. Moreover, just 15% named this the most important benefit their PSP provides. Even smaller shares of merchants think their PSP boosts approval rates (28%) or reduces false declines (24%). In each case, just 1% of the respondents named these as the biggest advantage their PSP offers. These lackluster rates of agreement indicate that PSPs are missing opportunities to help merchants improve critical areas of conversion.
Merchants give PSPs somewhat higher marks on other benefits. Chief among them is wide availability, meaning the PSP is easy to reach for assistance. In fact, 65% of U.S. merchants cited this as a benefit, with 35% naming this as the most important advantage. Ease of use also stands out, with 61% citing this benefit.
More broadly, many merchants feel their PSPs do not provide advantages in other key strategic areas. Thus, the data suggests that merchants view PSPs more as a necessity than a strategic, value-adding partner. PSPs that can change this perception by providing solutions that help boost conversion will position themselves to attract new merchants and grow their market share.
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Methodology
“The Role of PSPs in the Checkout Experience: U.S. Edition,” a PYMNTS Intelligence and Mastercard collaboration, is based on a survey of 300 merchants with a strong eCommerce business generating $10 million to $1 billion in annual revenue from five countries: Australia, Brazil, the UAE, the U.K. and the U.S. The survey was conducted from Sept. 18 to Oct. 9.
