I recently joined Worldpay from FIS—one of the the world’s largest payment processors—with over one million merchant customers globally. Over the past few months, I’ve read many clients’ case studies and observed best practices for some of the world’s largest brands, both within and outside of direct selling.
The hyper-focus that many leading brands have on both gaining and maintaining a customer is astounding. They know what the cost is to gain, retain and lose a customer. They know how to convert their audiences into lifelong shoppers or distributors, scrutinizing and optimizing shopper experiences for long-term success.
Here are some key learning points on the customer purchase journey.
1 / Frictionless Payments
Why not go check-out free? In EMEA, linking up with a large retail technology partner has enabled just that. After tapping in with a credit card, sensors detect what you put in your cart—and what you put back—and then you simply walk out when you are done. No lines, no checkout, no time wasted.
In both the online and offline environment, anything that causes friction during that all-important payment journey can increase cart abandonment. Innovative companies may benefit from viewing their payment processor as a revenue generating partner versus a cost center. What if you could decrease cart abandonment and increase sales? What is a 10-15 percent increase in sales worth to your company?
Digital wallets and innovative payment solutions focused on speed and convenience—such as the modern checkout Skipify—are disrupting what shoppers typically expect the checkout process to be. Paying with one click, wherever you are and whatever you’re purchasing, plus having your information stored for accelerated checkout in the future, may soon be the norm.
Whilst new payment technologies speed up the purchasing journey, they also help keep shoppers and companies safe. Biometric checkout (fingerprint and facial recognition) decreases fraud, increases acceptance rates and simplifies the customer checkout experience. You simply look at or touch your device, and you’ve paid.
The modern shopper increasingly expects a simple payments experience, where losing your card and needing to update it across services when it expires is a thing of the past.
2 / Declined Customer Transactions
Declined customer transactions are lost customers and distributors. Do you know what your lost customer and distributor cost is?
More than $443 billion worth of orders are falsely declined every year due to fear of fraud, yet only one percent of orders are actually fraud.
Each card issuing bank has certain rules to dictate which transactions they accept or decline. Issuing banks are much stricter on eCom transactions versus card-present transactions. Knowing how to present key information, the appropriate networks, exception rules and track record are all key to improving acceptance rates.
Some payment providers have specific authorization maximization products that only charge for the service when they successfully improve acceptance rates. I have seen direct selling companies increase their acceptance rate by seven percent just by using the right payment partner. What would a seven percent increase in your payment acceptance do for your business?
Of course, it is still important to identify fraudulent transactions when they do arise by enabling the right fraud prevention tools and measures. Merchants pay on average $3.36 per lost fraud dollar. Credit card fraud occurrences are up 161 percent since 2015. Online fraud is set to exceed $200 billion between 2020 and 2024.
3 / Localization
When customers are not able to use their preferred currency or payment types, they may not complete the transaction and could take their business elsewhere. Payment habits continue to shift away from cash and credit cards towards digital wallets and other alternative payment methods like buy now, pay later.
Digital wallets comprised 48.6 percent of eCommerce transaction value globally in 2021, or just over US $2.6 trillion. Wallets are projected to rise to 52.5 percent of transaction value by 2025. Some shoppers are dissuaded from purchasing cross-border because of hidden fees and customs charges, so transparency and up-front costs can improve confidence. Even better, make the international shopping experience feel domestic and ensure costs are kept down, shipping is fast, and returns are just as easy.
For markets where you have a high volume of established sales with a local entity, you may want to set up a local merchant account with local processing to minimize foreign exchange expense and increase your payment acceptance rates. Find out which markets your payment partner has local licenses for to set up a merchant account for you. This can eliminate additional contracting entities and costly technical integrations that must be constantly maintained.
Driving Growth and Retention
In my short time at Worldpay from FIS, I’ve learned the future of retail success lies in a balancing act between key priorities. Many leading brands are great at making it easy to buy their product or service, and through select partnerships and integrations achieve speed, security and convenience for the customer, whilst also optimizing their revenue and limiting risk.
The very definition of a ‘seamless’ service is that the shopper doesn’t know which components were brought together to enable them to sit back and relax, knowing their item is on its way without a hitch.
Michael McClellan has been in the direct selling industry for 20+ years and oversees the direct selling vertical market for Worldpay from FIS. Worldpay is the largest payment processor in the world.
From the November 2022 issue of Direct Selling News magazine.