Customer experience (CX) is now âeverything,â according to PwC and other retail analysts. CX is the factor that drives buyers to pay more in some stores and avoid others altogether– and one of the things that has a huge impact in CX is convenience. This is especially true in e-commerce, where friction at the checkout keeps the cart abandonment rate hovering around 70%, year after year. One of the ways merchants can make their online shopping experience more convenient and drive more cart conversions is by offering customers digital wallet payment options.
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Digital wallets are increasingly popular. ClearSale’s 2021 survey of online shoppers in the United States, Canada, Mexico, United Kingdom and Australia found that 71% prefer to pay with digital wallets over credit cards when they shop online. Twenty-seven percent say they always pay with a digital wallet, and 44% sometimes do.
Let’s take a look at some of the reasons why digital wallets are already so attractive to online shoppers and how merchants can benefit from their addition.
Digital wallets are more convenient than cards
Shoppers ranked convenience as one of their top three reasons for continuing to shop online rather than returning to the store. Digital wallets make shopping online easier because they eliminate the need for customers to enter or tap their payment data to make a purchase.
This is important because only 28% of consumers said they always have their credit card handy when shopping online. Forcing them to enter card data may cause them to turn to a merchant who uses their digital wallet instead. In fact, 35% of shoppers surveyed said they gave up online shopping because of long and complicated payments.
Letting customers pay with a digital wallet can remove another common barrier that causes them to abandon their carts: account creation. Thirty-two percent of shoppers surveyed said they left before completing payment when the site asked them to create an account. With a digital wallet, the merchant can automatically receive relevant customer contact and shipping information without requiring buyers to go through a multi-step account creation process.
Digital wallet support card and loyalty program rewards
Many digital wallets allow users to add their retail rewards cards so that they can earn and spend points on their digital purchases. Some credit card issuers offer bonus points to cardholders when they make digital purchases through specific digital wallets. For example, a Chase card offered users 5% cash back on card purchases made through PayPal in the fourth quarter of 2020.
Merchants can capitalize on these benefits by offering rewards cards that digitally integrate with customer wallets, so customers automatically earn points and benefits without having to enter a rewards account number. Merchants can also partner with card issuers to provide special offers to cardholders who shop with them.
Allowing customers to spend and earn loyalty points with ease improves their shopping experience. It can also increase loyalty. McKinsey discovered in 2020 that loyalty program members are 30% more likely to spend more after registration. This probability rises to 60% if they have to pay to participate in the loyalty program.
Fraud prevention, CX and digital wallet payments
Another convenience that digital wallets offer customers is peace of mind. More than a third of consumers (36%) said they gave up shopping online because they didn’t trust the site with their credit card information. When customers pay with their digital wallet, their card data is never exposed to the merchant.
Digital wallets are designed with security features to protect user data, but like any online account, these wallets are susceptible to takeover account fraud (ATO) if someone steals or cracks their login credentials. . ATO has been on the rise since the start of the pandemic, and digital wallets are often a target.
This risk of ATO fraud through the digital wallet – along with the challenges some merchants report in challenging digital wallet chargebacks – means that merchants need to screen digital wallet orders for the risk of fraud, paying attention to recency. controls, speed, location, and AI-based AI analytics. customer behavior on the site during the current shopping session versus past behavior.
Digital wallet orders that raise flags should be reviewed by a fraud analyst, not automatically rejected. A quarter of consumers in our 2021 survey said they were turned down at least once when shopping online, and 40% agreed that they would never order from the same merchant again. An experienced analyst can sort actual fraud attempts from good orders that don’t fit the typical profile, so your good customers can shop without disrupting their experience.
Adding digital wallet payment options to your online store can improve the customer experience by simplifying and speeding up payment, reducing customer concerns about the security of their payment data, and saving them money. and more easily spend credit card reward points in your store. It’s the kind of experience that drives loyalty, repeat visits, and more potential income for your business.
About the Author
David Fletcher is Senior Vice President of Clear Sale, a no-card fraud prevention operation that helps retailers increase sales and eliminate chargebacks before they happen. As a serial entrepreneur, he understands the unique issues that affect business owners today and how fraud management can provide real-world solutions to those issues. At ClearSale, he leads business development, sales, partnerships and alliances with top ecommerce organizations. Follow on LinkedIn, Facebook, Instagram, Twitter @ClearSaleUS, or visit https://www.clear.sale.