Tamebay 2020 Back to Work Tips – Iain McDougall
In the latest instalment of our 2020 Back to Work Tips series, Iain McDougall, UK&I Country Manager at Stripe discusses payments and ensuring you are trading on platforms which offer the options your customers demand.
Iain leads UK & Ireland operations for Stripe. Stripe’s software tools allow businesses to securely accept payments, expand anywhere in the world. Stripe works with many of the world’s leading marketplaces to managing the complex, regulated fund flows associated with businesses like Deliveroo, Depop, and Postmates.
Don’t be sold short by bad payments tech
Making a sale isn’t easy. It requires a successful confluence of many factors. You need to put the right product in front of the right person at the right time. So once you’ve managed that, it would be heartbreaking for any merchant to see the sale slip away because transacting (specifically, paying) is too difficult for the customer.
The bad news is that the heartbreak is spreading. As many as 87% of consumers will abandon a purchase if a checkout process is too arduous. So for businesses looking to make a lot of sales, ensuring payments are easy for customers is as essential as getting the product right.
The good news is that offering a simple checkout process is being made easier by marketplace platforms that now use payments technology to compete for merchants. Quite right too, given that half of merchants now recognise payments software as a critical factor when choosing a marketplace from which to run their online business, and UK marketplace spending is set to rise 50% by 2024.
Alongside making it easy for customers to transact, reliability and speed were found to be crucial attributes of marketplace payments products among merchants.
Thankfully, there’s been significant progress in the past few years as leading marketplaces have started to incorporate more advanced, integrated payments technologies for their merchants. Marketplaces like Lyst, TaskRabbit, ASOS Marketplace, Treatwell, and Depop enable merchants to access their own suite of payments tech – from a payments dashboard, to the ability to offer a wide variety of payment methods, including digital wallets like Apple Pay, GPay, and Alipay, as well as pay-later products like Klarna.
Despite this, research still shows that over half of merchants feel that payments presents one of the most challenging aspects of selling online. So it’s more important than ever for merchants to seek out marketplaces that offer a swift and frictionless process for their end consumers.
The payments space is constantly changing, adapting to shifting consumer behaviours, taking advantage of new technology, and managing compliance against an increasingly complicated regulatory backdrop. This last point is crucial. New regulations such as the EU’s Strong Customer Authentication (SCA) rules, which will come into effect in December 2020, represent a significant risk that hard-won sales will fall at the last hurdle.
Under SCA, customers will need to verify their identity for payments over €30 (£25.50) using two distinct authentication methods, such as a passcode, face ID or their fingerprint. Banks will otherwise be forced to decline transactions entirely. Stripe’s research estimates that unless merchants rollout SCA compliant solutions in time, Europe’s online economy is facing a considerable economic hit in lost sales, running into over £48 billion in declined transactions.
As the choice of marketplaces becomes ever broader, payments are a key differentiator. Having the right payments technology in place can provide access to entirely new customer groups and sure-up existing revenue streams.
If you’re using a marketplace to sell your products, test it out for yourself. Ask yourself, does this process compete with the very best the internet has to offer? Does the marketplace have a frictionless checkout experience to maximise conversion? Does it offer the right suite of payment methods, and can it remove the complexity of regulations? Or will your customers find it easier to make their purchases elsewhere? Save yourself the heartbreak and don’t let your hard-won sales slip away.