For ecommerce merchants, a well-executed payment flow can mean the difference between conversion and abandonment. After all, your customers have come to expect fast, secure, trustworthy and convenient experiences when they go to check out. Fail to deliver and you may end up alienating a potential returning customer.

So how can you keep that from happening? We’ve curated four insights — gleaned from a survey of more than 2,400 online shoppers — which are particularly relevant to heads of payments at ecommerce brands.

Acting on these trends can help you better cater to these expectations. And for more data from both consumers and merchants, download our latest report, the Payments experience playbook: what really matters to your customers.

Pick the ideal number of payment methods for your target market

Decision paralysis does have a real impact on customers. Nearly four in 10 shoppers said they’d feel overwhelmed if offered more than five payment options. A further 18% said they’d be confused about the difference between all those methods.

And checkout confusion can have a real impact on conversion. Payment selection is the third most common point of drop-off for customers, behind authentication and payment detail entry.

So how do you strike the right balance? James Auton, Strategy Designer at TrueLayer, says there’s no one-size-fits-all solution. Conduct surveys with your customer base and gauge their preferences. From there, try to determine which four or five payment methods suit the highest proportion of your users.

Nearly four in 10 shoppers said they’d feel overwhelmed if offered more than five payment options.

Your target market should also guide the payment methods you choose, says Nadja Bennett, Strategic Accounts Director at TrueLayer. Customer preferences vary significantly by region. Accounting for these differences will help you choose the right options and keep your payment screens manageable.

But it’s not enough to react to customer behaviour. Once you know more about your shoppers, you can use your payment experience to guide them toward methods that better suit your business.

“Understand what methods you want to prioritise and why,” Auton recommends. “You may want to phase out payment methods based on costs, for example, or based on your long-term strategy. Consider how you can encourage people to change their behaviour to a method that benefits you.”

Cards remain popular, but prepare for life with alternative payment methods

While payment preferences differ across Europe, cards remain popular in many countries. More than 8 in 10 (82%) of online shoppers in the UK rank debit cards as a top-three payment method.

Notably, UK customers show a strong preference for debit over credit, with 42% ranking the latter as a top-three choice. Bennett lists several factors for this choice. European regulations have capped interchange fees, leaving credit card issuers with less revenue to offer rewards. 

“There’s also been a mindset shift amongst shoppers,” Bennett adds. “More and more are using funds that are actually only available in their accounts, in part to make budgeting easier.”

More than half (53%) of UK consumers say they’re familiar with open banking payments, while 1 in 5 consumers rank it as a top three choice when completing a transaction.

But even debit’s days might be numbered. Alternative payment methods are also gaining steam. 7 in 10 UK consumers said they’d be willing to prioritise services like PayPal, with 40% listing them as their first choice when making a purchase. At a time when payments need to be optimised for digital channels, Bennett notes that cards remain frustratingly analog.

“I can foresee a shift, particularly amongst younger generations who are mobile first and a lot more aware of where they enter their sensitive details online,” she says. “They might not be so comfortable using their card for risk of fraud and therefore look at alternatives.”

Open banking payments are also driving this shift. Public awareness has grown substantially since its introduction in 2017. Today, more than 9 million open banking payments happen each month. More than half (53%) of UK consumers say they’re familiar with open banking payments, while 1 in 5 consumers rank it as a top three choice when completing a transaction. As demand for digital payments increases, expect adoption to grow as well.

Don’t let slow payments damage brand loyalty

For sectors such as retail and food delivery, recurring customers make up a significant proportion of sales. As Bennett says, they also come with a host of other benefits: they tend to make fewer returns, are less likely to be the cause of fraud, return to shop organically and therefore cost merchants less overall than acquiring new customers.

As a result, it’s essential for merchants to foster brand loyalty at all stages, including checkout. Slow, friction-prone payment experiences do the opposite — 60% of UK consumers say a slow, frustrating experience would prevent them from shopping with a merchant again in the future.

Nearly 8 in 10 consumers (79%) said they’d be at least somewhat likely to choose a payment type that doesn’t involve manual data entry.

Reducing manual data entry is a key way to remove this friction from your checkout. As Auton notes, typing in card details is not only annoying and inconvenient for shoppers — it also erodes trust in your brand. Nearly 8 in 10 consumers (79%) said they’d be at least somewhat likely to choose a payment type that doesn’t involve manual data entry.

Transparent communication can also alleviate friction-related frustrations. TrueLayer UX/UI Designer Barbara Viganò says that clear messaging is a must at all times. From the beginning of a payment, customers should know the actions they need to perform, how long the process will take, and how much they’ll end up spending, especially if they’re using a new or unfamiliar method.

“Clearly show the user the actions they’ll need to perform to complete the payment,” she adds. “They need to quickly understand the steps they’ll need to take in order to successfully make the purchase.”

Fast refunds are more important than ever

A good payment experience doesn’t end once a purchase has been completed. Returns and refunds need to happen quickly and seamlessly, as 64% of online shoppers expect to receive their funds within an hour of making a request. As Bennett observes, “Instant refunds are increasingly becoming table stakes for retailers that want to differentiate themselves from their competitors.

That’s easier said than done for some retailers. Nearly 6 in 10 (59%) online merchants take a day or longer to fully process a refund. Simply put, customer expectations aren’t being met.

So what accounts for these delays? First, there are the usual complications involved in returning physical merchandise, and wait times can vary depending on the goods and services being purchased. Merchants that deal in digital products can generally offer faster refunds, but slow infrastructure like card rails can still keep funds from reaching customers for days.

64% of online shoppers expect to receive their funds within an hour of making a request.

There are a few ways to speed up the process. Bennett recommends that merchants who sell physical goods start the refund process as soon as they have received and verified the returned products. Methods like open banking payments can also help. They run on instant banking rails, allowing funds to settle immediately and ensuring customers receive their funds right away.

And as always, effective messaging can help manage customer expectations. “Tell them how long the process will take,” Auton says. “Don’t be vague about when a refund might come through. Be clear in the copy about what’s going to happen and when.”

Good communication doesn’t begin or end with your payment pages, either. Viganò recommends sending follow-up emails with clear dates for when they can expect their funds to arrive. Include customer support information and contact details as well. If a refund is late, your customers shouldn’t have to seek out customer support on their own.

Addressing these trends is only the first step in improving your checkout. Download our Payments experience playbook to get real insights from real consumers.