Consumers now have high expectations surrounding not only the user experience (UX) but also the payments process itself, which both need to be fast, uncomplicated and frictionless. Simply put, if businesses don’t get this right, they will lose customers.
In September 2020, Andrew Monroe, our General Manager, North America at Ingenico ePayments joined John Phillips, General Manager EMEA, Zuora to discuss recent changes in customer behavior, provide key insights from the subscription economy and specific factors digital companies should consider when optimizing their customers’ payment experience.
Consumers now have high expectations surrounding not only the user experience (UX) but also the payments process itself.
The goal was to help digital businesses keep their finger firmly on the pulse of changing customer behaviors and also get a better picture as to why the right payments mix represents the key ingredient behind a strong monetization strategy. In case you missed it, here are our top three takeaways.
The impact of COVID-19 on consumer behavior
In 2020, technology has played a crucial role in all of us staying connected while being at home. The digital and subscription economy was growing at a rapid rate already, but the ongoing coronavirus pandemic has accelerated not only the way we work, but also the demand for digital products and services. By the end of Q1 2020, Netflix had a huge 183 million subscribers registered, while in April 2020, Zoom was seeing over 300 million video call participants per day. Our focus at Ingenico has been to enable businesses to digitize effectively, across e-learning, e-streaming, e-content and digital gaming, while utilizing subscription models.
The ongoing coronavirus pandemic has accelerated not only the way we work, but also the demand for digital products and services.
Through its Subscription Economy Index, Zuora provides some invaluable insight into the performance of subscription-based businesses. Looking at March and April 2020, the key index findings saw that 20% of businesses in the OTT video streaming, e-learning, digital news and media segments witnessed accelerated growth rates compared to 47.4% of companies providing general software, information services telco and utilities services, which experienced limited growth.
As this growth trend continues in the subscription economy, the adoption of digital payments is set to increase too. Now is the time to invest in understanding the dynamics of what a truly optimized subscription payment customer acquisition looks like. As a result, investing that time now is not only going to capture the spike witnessed by the market, but also the overall growth which will not go away in the foreseeable future.
Solving key payments challenges
Key capabilities in the subscription market vary greatly to fit diverse customer needs. However, when a consumer enters the payment funnel, several factors including security concerns, the lack of preferred payment methods, poorly optimized checkout process (to name but a few) will influence the probability of shopping cart abandonment and the loss/gain of a sale.
A poll conducted among the webinar participants revealed that the checkout experience, as well as fraud and security, remain the most challenging steps in the payments funnel for businesses. A clear indication that optimizing the checkout experience is a much more dynamic topic for the industry compared to previous years.
When a consumer enters the payment funnel, several factors including security concerns, the lack of preferred payment methods, poorly optimized checkout process (to name but a few) will influence the probability of shopping cart abandonment and the loss/gain of a sale.
At Ingenico, we really focus in on the UX, specifically using data to help inform digital businesses to make the right decisions for creating the best possible UX: the more information businesses can collect on the consumer as it pertains to the goods and services they’re selling within the industry, the more laser-accurate they will be in offering the right payment methods to the right consumers.
The key to offering the right payment method(s) is to really know your customers or more specifically, understanding customer demographics and the dynamics of the industry in which customers pay. Having that data and using it to the business’ advantage is going to enable optimized conversion rates.
Fraud and security
There are a myriad of strategies and emerging technologies for digital businesses to implement as part of their endless efforts to effectively detect and prevent fraud. Let’s take 3D Secure, for example.
While 3D Secure technology adoption is not necessarily a prerequisite for a business overall strategy - as this depends on a variety of factors (including customers, the company’s goods and services, the checkout experience) - it has great potential for implementation not only as a fraud prevention tool and mechanism for shifting liability, but also as an effective technology to increase conversions! A key aspect to keep in mind is that 3D requirements can not only be set on country, but also on issuing bank level. Therefore, it is important to not only analyze country performance, but also the performance per issuing bank and preferably even at the BIN level.
Consumer experience rules supreme when optimizing payments for digital markets. At Ingenico, we created our solution for digital businesses to complement their business model with the right payment product mix and functionality to avoid leaving monetization opportunities on the table.
The only way to thrive in a subscription economy is to deliver a high-value experience that meets consumer needs and enables a smooth subscription process. Our recurring payments suite ensures just that, enabling our customers to focus on what really matters: maintaining a long-term engagement with consumers.
The only way to thrive in a subscription economy is to deliver a high-value experience that meets consumer needs and enables a smooth subscription process.
This article was originally published on blog.ingenico.com. Since October 28, 2020, Ingenico has joined Worldline.