Choosing the Best Payment Methods for Your Small Business
Your online store is filled with great merchandise, your social media accounts and ads are driving traffic to your site, and your mobile user experience is first-rate.
So why aren’t more visitors buying what you’re selling?
Maybe you’re not letting them pay the way they want to.
If you only offer one or two ways to pay, even if they’re popular methods like PayPal or Square, you may be losing customers who expect a convenient checkout, especially when they’re shopping on their phones.
Do Visitors Want to Use Your Payment Options?
How do you know if you’re losing customers because they don’t like your payment options?
They probably won’t tell you but if they do, consider it a gift you can use to learn more about what do they want. You can also survey your customers, but you’re not guaranteed to get responses.
One of the clearest indicators that shoppers don’t like your payment options is your store’s shopping cart abandonment rate, which is the percentage of carts with items in them that get ditched before payment.
Overall, the e-commerce cart abandonment rate hovers around 70%, according to the Bayard Institute, which compiles data from dozens of sources. The range is anywhere from 60% to 78%, meaning that at best, more than half of shoppers choose items and then don’t buy.
Of course, your store’s cart abandonment rate may be higher or lower. It’s one of the metrics to track so you can see how well your checkout process meets your customers’ expectations.
Is It Worth Your Time and Effort to Add New Options?
Bayard found that 19% of shoppers who’ve abandoned a cart say they didn’t trust the site with their card information. Another 8% said there weren’t enough payment options.
So, let’s do some quick math: If your store is average, 70 out of every 100 shoppers who add an item to their cart will bail. By adding digital wallet payment options so they don’t have to give you their card number, you could convert up to 13 (that’s 19%) of those 70 shoppers. And if you add the payment methods your target audience prefers, you could convert another 5 or so (the 8% who want other options).
Earning up to 18 more conversions per 100 carts seems like a worthwhile use of your time. Let’s look at some methods to consider.
Amazon Pay makes discount deals with some merchants
Amazon announced in May that it’s offering Amazon Pay processing-fee discounts in exchange for long-term deals with some merchants. Even if you’re not among the big-name merchants to be courted by Amazon with the fee discount, adding Amazon Pay to your store can make it easier for Amazon customers to shop with you without having to key in their payment data in your checkout.
Why court Amazon customers, who seem very loyal to that site? The company told trade site PYMNTS.com that 33 million consumers in 170 countries already use Amazon Pay, and about a third are mobile shoppers with an average ticket value of $80. Getting even a sliver of those customers into your store could translate into more sales, especially if they can pay easily.
Google Pay now works with Firefox, Safari, and iOS
Google Pay, meanwhile, also made a big announcement in May. It’s now compatible with Firefox and Safari browsers and—importantly, given the number of iPhone users—iOS. Previously, only Google’s Chrome web browser and Android devices supported Google Pay.
The change means shoppers who visit your store via Firefox, Safari, or their iPhones can use their Google wallets to buy your merch.
However, unlike Amazon Pay, which provides customer billing and shipping address information in merchants’ checkouts, Google Pay only autofills that information in Chrome. Having to key in data can increase cart abandonment, but the extra convenience and security of not having to enter a card number might make up for that.
Google Pay also lets retailers set up loyalty programs, digital gift cards, and deals for customers so everyone can skip the paper and plastic cards. And Google Pay works with PayPal and Visa Checkout for added reach.
Perhaps the biggest advantage Google Pay has over Amazon Pay is that it’s free. Neither merchants nor shoppers pay extra processing fees to use the service. (Apple Pay and Samsung Pay are also free for merchants to use.)
Snapchat’s a social media payment tool to watch
Although these aren’t payment processing methods, there’s a social media payment tool you may want to keep an eye on for the future.
The one to watch is Snapchat’s new in-app ticket buying feature, which debuted in June. The soft release with SeatGeek lets users book event tickets within Snapchat stories for the Los Angeles Football Club and the International Boxing Federation.
Snapchat’s also been trying out in-app branded merch sales and swipe-to-buy features. The features aren’t widely available yet, but these tests are worth watching, especially for merchants whose target audience is teens and young adults.
Which Payment Methods Are Right for Your Small Business?
Ultimately, any payment method or tool that makes it easier for your customers to buy from you is worth exploring.
As you consider which ones to add, look at their fees (if any), customer base, countries in which they operate, security and fraud prevention, and popularity with your target audience.
And be sure to track your cart abandonment and conversion rates to measure the performance of any new methods you add.