Why should merchants further deep dive into their payment strategy?
Date: November 2, 2022
As a merchant, a high conversion rate is desirable. But what happens when a customer cannot find their preferred payment method in checkout? What if there’s no payment options applicable to them? Abandoned baskets.
In the current state of e-commerce, more and more merchants are operating on a global scale. Why wouldn’t they? Reaching out internationally means more customers, a wider audience and ultimately, higher revenue. There’s just one thing that merchants need to take into consideration when expanding to new territories: local payment methods. Payment systems and the checkout experience needs to run as smoothly as possible, seamlessly where possible, to ensure that customers don’t bail on their carts. The tough part lies with the merchant. What do you do if your payment provider does not have the preferred payment method you are looking for?
In this post we will highlight what merchants should look for when expanding.
How do I add more alternative payment methods?
Ask your current provider what they are offering. Make sure that you utilize the account management team to find the right APM’s. This is essential to ensure conversion can increase as much as possible. Sometimes conversion can be improved by simply adding a couple of additional APM’s. Another important aspect to take into consideration is that if you receive traffic from certain regions, you need to be able to offer the local payment method. This will definitely boost conversion.
How do I get the right pricing?
Make sure you consider a couple of important factors. Examine the payment provider you have currently and ask if they are an acquirer themselves. If they are, this means that they can re-sell iDeal for instance.
What am I doing with my risk settings?
Take a good look at your authorization rates. If there is a significant difference in your authorization rates, it could mean that your risk settings are too strict. Due to declines, you as a merchant need to pay a lot of avoidable extra transaction fees. For instance, every decline costs you €7 cents per transaction and every and every declined credit card authorization costs you €3 cents. It bears repeating: these are avoidable costs.
For instance, consider using a local acquirer for foreign countries so that the acceptance rate becomes a lot higher. When a payment is done from another region that is not covered by the current acquirer it can lead to a transaction block.
Am I compliant? What to do with my KYC material?
Consider using a third party for your KYC material. This way you could send over your own KYC material to your new PSP or Alternative Payment Method. By doing this you avoid being locked at a PSP and don’t have a lot of unnecessary additional costs should they need to perform the KYC for you again.
How can I easily add more payment providers in one dashboard?
You can start by looking at Payment Orchestration platforms. A payment Orchestration Platform is a single technical gateway that you can place in front of your existing platform that is integrated with your provider. An Orchestration Platform helps merchants optimize their payment flow at the lowest cost. These platforms include smart/ dynamic routing to route transactions to the best performing provider. Ultimately this will lead to increased conversion, redundancy, A/B testing, flexibility, scalability and save costs.
If you’re considering global expansion with new APM’s, are in the process of contracting another PSP or considering a POP, please contact us if you need any help. Our experienced Fintechamps team can help you make the right decision and support you in the selection process.