The following article was written by freelance writer Agnieszka Pulak.
Choosing the right payment system is directly related to increasing conversion rates on your e-commerce website. We can clearly see the impact of payment methods on conversion rates – it can be positive or negative depending on the merchant’s choice. Any merchant who is interested in increasing conversion rates has to be aware of the fact that the customers are likely to choose the most convenient ways. Check the links between payment methods and conversion rates and get to know how to increase your conversion rates by choosing the right payment solutions.
Conversion rates – definition
What exactly are conversion rates? This is a marketing term that is known by any merchant who is interested in sales. Merchants take many marketing steps, such as e-mail campaigns, website design, unique content or video campaigns. Those steps are taken to increase conversion rates – the percentage of visitors who visit a website compared to the number of sales of a product. Any merchant aims to increase his conversion rates not only to improve the sales but also to check which marketing steps have been successfully taken. Analysing conversion rates gives a chance to control which media campaigns have been cost-effective and how many of them need to be improved. For instance, sending a newsletter with discount codes on some products can directly affect buying those products by the large amount of customers. It is one of the most successful marketing strategies that can increase conversion rates. You can calculate your conversion rates by dividing the number of conversions by the number of the overall ad clicks. For instance, if you had 100 conversions from 1000 clicks, your conversion rate is 10% (100/1000*100).
Types of payment methods
There are several hundred payment methods and it is your role to choose the best ones. Choosing only one of them can be unsuccessful and decrease your conversion rates. Why? You can read it in the next part of this article, but now let’s look at the types of payment methods that you can choose and add to your website.
- Credit card payment (e.g. Visa, MasterCard, American Express),
- Debit Cards (e.g. Visa, MasterCard),
- Bank Transfers (online banking, phone banking, completing payment form at a bank),
- Digital Wallet (e.g. Apple Way, Google Wallet, Windows Live ID),
- Cash on Delivery,
- Instant Electronic Funds Transfer (e.g. PayPal, PayFast).
Remember that not everyone wants to pay online, even if he or she buys online. If you do not want to lose your potential customer, do not forget about the Bank Transfer option for those who want to visit a bank and complete payment form in person. Cash on Delivery is also one of those payment solutions that are chosen by people who do not use the online payment methods.
Links between payment methods and conversion rates
Choosing payment methods is as important as choosing website design or creating unique content. It is most likely even more important. Imagine this kind of situation: you want to buy a printer. You have found a well-designed website with very convincing content that redirected you to a shopping cart. Everything has been perfect so far… Trying to buy a printer, you have to fill out order information in several steps and you are becoming really annoyed, because there is only one payment method to choose – the one that is inconvenient for you. So what are you doing? You are leaving your shopping cart and looking for an easier way to buy a printer. Unfortunately, you have only wasted your time and you are not going to return to the website anymore.
Can you see the link between payment methods and conversion rates now? Even if you have the best designed website and hire the best copywriter who writes content, you can lose your customer by not giving him a chance to choose the most convenient payment method. As a result, your conversion rates decrease and you lose your chance to sell the product.
People like fast shopping – some of them like spending even some hours on websites looking for clothes or devices, but no one likes finalizing the transaction. Remember to make this step easy and fast to make the customer feel satisfied. Moreover, some people use phones or tablets to buy online, so you should accept payments on every device.
Choosing a payment gateway is also crucial, because some of them may decrease your conversion rates. There are on-site and off-site payment gateways: the first ones enable your customers to buy products directly from your website and the second ones direct them to another site where they have to finalize the transaction and accept this site’s terms and conditions. It can discourage your customers who do not want to share their confidential data with the payment service provider.
How to increase your conversion rates by changing payment methods?
There are several effective solutions to increase your conversion rates only by changing payment methods on your website. First of all, you should choose at least three payment methods that are most popular among the customers of your country. Pay attention to differentiation of those methods – to satisfy both customers who transfer money online and those who would prefer to pay at a bank. Do not forget about those who use mobile phones and tablets to pay. If you sell expensive goods, think about cooperation with a bank which can give your customers an instalment loan. One of the possible payment solutions offering all of these options is G2A PAY, a Polish newcomer to the payment gateway market, but one with a surprisingly solid offer.
Remember that customers like to shop fast. Too many clicks may discourage them and decrease conversion rates. Reduce number of steps and inform the customers about the progress of their purchases, such as shopping cart, shipping, payment method’s choice, order summary and order confirmation. If they can see how many steps they have to take, they may stay and complete the order. The whole process should be easy, so reduce the number of unnecessary information and use colours to mark the most important buttons.
You can compare your conversion rates before and after changes using A/B testing. For the same time period your website will have two versions: the old (A) and the new (B) one. Some customers will see the old version and some of them will see the new one (after changes). The one which will give you better conversion rates, should be implemented.
As you can see, conversion rates and payment methods are closely related. Do not forget about your customers’ convenience and preferences to satisfy them and convince them to stay on your website and buy your goods.