eCommerce
Payments
Open Banking
December 29, 2020
8 Min

Addressing the Current Challenges in eCommerce Checkout Experience

Trustly

2020 was the year of many things, direct-to-consumer commerce among them. The first wave of lockdowns saw a huge increase in eCommerce sales, as even traditionally offline businesses were forced to start offering their wares using online payments. This trend towards more digital shopping is likely permanent, as we just had the busiest Black Friday ever — with the number of online customers growing by 22% compared to 2019.

While this sounds like good news for eCommerce stores, there remain some major challenges that hinder the online checkout experience.

Current Challenges in eCommerce Payments

Businesses running D2C or eCommerce stores are well aware of the major issues in customer checkout experience. High rates of fraud and chargebacks make online commerce much more costly for businesses. This has gotten worse since the pandemic, with a 31% increase in chargebacks since March 2020.

According to LexisNexis’ 2020 True Cost of Fraud Report, the cost of fraud has risen 7.3% across US retailers and e-commerce merchants. Every $1 of fraud now costs them $3.36 compared to $3.13 in 2019.

Meanwhile, low checkout conversion and high cart abandonment rates show there’s massive missed revenue opportunities. While eCommerce cart abandonment rates have never been good in recent years, they now are worse for the majority of industries in 2020:

Increased fraud, chargebacks, high cart abandonment and low conversion rates are all consequences of the COVID-19 pandemic  and poor checkout experiences. One thing is clear, eCommerce and D2C businesses need to make some changes in order to minimize these issues and succeed long term.

What’s the Solution?

There are many tools and technologies businesses can invest in to start tackling these checkout experience issues. There are numerous fraud prevention tools that also help reduce chargebacks and false positives for eCommerce sellers. However businesses need to be careful when using these kinds of tools. More than half of merchants report that their fraud prevention solution auto declines up to 7.5% of all their transactions, even legitimate ones.  

Fraud prevention tools also don’t solve the whole problem. They don’t do anything to improve customer experience and reduce abandoned shopping carts.

There are many solutions out there that use email marketing and exit surveys to try to recover abandoned carts, such as CartStack, Rejoiner, and Qualaroo. But why not address the problem at its source to prevent abandoned carts instead of recovering them?

According to research by the Baymard Institute, people leave their carts during checkout for a number of reasons:

Having to create an account and the checkout process being too long/complicated account for 49% of responses. 17% abandoned the cart as they were hesitant in using their credit card on the site. This is a huge optimization opportunity if eCommerce sellers can just simplify the checkout process.

Furthermore, introducing additional payment methods, like Open Banking Payments, reduces cart abandonment helping capture the business of those who marked there weren’t enough payment methods available as their reason for dropping off.

Stay in the know

Get exclusive insights and updates on all things Open Banking and Payments.

Thank you! Your submission has been received!
Oops! Something went wrong while submitting the form.

Relevant pages and resources

eCommerce
Open Banking
Payments
April 18, 2024
3 min
Pay by Bank vs Cards: Consumer Experience
Open Banking
Company
April 8, 2024
3 min
ESPN Bet and Trustly Expand Instant Payouts with FedNow®️
Open Banking
Payments
March 28, 2024
5 min
4 Reasons Why Billers Should Modernize ACH Autopay