Why Complexity Is the Enemy of the Sale

Even with the continued shift to digital payments and the plethora of payment options, there are still stumbling blocks in commerce.

Complexity is the enemy of the sale, Splitit Head of Client Success John Beisner told PYMNTS for the What’s Next in Payments series, “Business Simplicity: The New KPI?”

Merchants have been adding digital wallets and buy now, pay later (BNPL) choices to their sites as each new payment method gains attention, and the result is a crowded checkout experience.

“The biggest challenge they have is that they want people to complete a transaction,” he said of merchants. “They want to get them all the way through to the purchase.”

When consumers run into any friction, however, they walk away — and any hiccups in the flow, from browsing to buying, lead to cart abandonment.

Even BNPL options — which are popular — have their sticking points. Consumers and merchants are stymied by low authorization rates. Would-be buyers, choosing BNPL at checkout, find their hopes dashed when they’re turned down. Merchants are hit with diminished brand “value” as these same consumers sever ties with the business, or if it’s their first time, never return, he said.

Merchants considering adding BNPL to their list of payment options also run the risk of overwhelming consumers, who must go through the application process, and at times may have to journey outside of the enterprise’s website to apply for the BNPL loan — sometimes only to be denied.

Familiar Payment Method

Beisner said one way to cut through the complexity and friction is to link paying over time with one of the most universal payment methods: credit cards. Splitit enables consumers to use an existing credit card, staggering interest-free purchases over time.

It’s the same payment process, a familiar payment process that they already know, he said.

“All they need is the credit card number and the expiration date” and any other details that might accompany a typical card transaction, he said. The fact that there’s no additional credit source or loan to tap into means the consumer is not taking on additional debt to get what they need. The pre-funded transaction (as the enterprise receives the money up front from Splitit) improves the cash flow metrics of the business itself.

Splitit “fits right into the existing payment flow” and card processing that goes on in the background, Beisner said. It’s on the eCommerce site as a white-label solution (with a one-tap installment process). The merchant brands the checkout, which increases the trust that the consumer has in the business. There’s no taking the customer out of the flow or collecting additional data.

“Everything goes through the checkout that they already know, without any changes, and that’s simplicity on everything that we cover,” Beisner said. “Once people realize that they can use the card but spread those payments out, they’re apt to do that and probably increase the average order value as well.”

Approval rates are also high, routinely topping 80%, he said.

“We’ve found that we’re an increasing share of checkout,” as merchants also find that they have an increasing incidence of returning customers, Beisner said. “You’re seeing a 30% to 50% ‘reuse’ of our capability within merchants.”

The company’s near-term roadmap includes working with firms that have embedded payment experiences and simplifying installment payments at the point of sale.

“We try to make everything as simple as possible at both the merchant and the consumer levels,” Beisner told PYMNTS. “They just put their card in and make the purchase.”