The pandemic made a significant impact the world over, affecting how most people lived and how they worked. More people took advantage of contactless online and mobile wallets to make their payments.
According to the UK Payment Market Summary 2021, more than 52% of payments were made by cards in 2020 as a result of widespread lockdowns and physical stores shut down. Of all payments made in the UK, debit cards made 44%. Although a dip of 18% from the previous year, there were 2.8 billion payments made with the use of credit cards.
Although eCommerce continues to soar to new heights due to the pandemic, it has been mired in growing pains and challenges.
The Main Culprits Of eCommerce Headaches
eCommerce brands have a lot of issues and roadblocks to contend with. Some of them include cart abandonment, high costs to process payments, and the biggest…card-not-present fraud.
Here are more issues that eCommerce must contend with to stay in the game:
High Fees And Costs
In order to process card payments, there are merchant service charges (MSCs) that are about 1.9% for UK merchants that have a turnover of less than £380,000 and about 1% for those with a turnover between £380,000 and £1 million. MSC is the largest fee, but not the only one. Here’s more:
- Authorization fees ( 1-3p per transaction)
- PCI Compliance fees ( £2.50-£5.50 per month)
- Card terminal for hire fees ( £14 to £24 per month)
- Chargeback fees (£15-£25 for chargeback requests)
Strong Customer Authentication (SCA)
This regulation requires that all customers making card payments must confirm their identity by providing two different identification factors. Although this greatly reduces the risk for the merchant, it significantly increases friction for the customer.
This type of fraud occurs when a person tries to make a card purchase when they don’t have a physical card. CNP fraud now accounts for 79% of all card fraud losses for 2020 in the UK.
How eCommerce Merchants Can Come Out On Top
In spite of all the issues that online merchants must face to continue to operate their virtual stores, there are certain things they can do to come out ahead. Here are four effective strategies:
1. Easy Refunds And Returns
If there is one thing that eCommerce merchants have control over is how they treat their customers. Knowing that customers cannot try on a piece of clothing or touch a certain product, it is only normal to expect returns.
Having an integrated system to have online items returned back to their brick and mortar stores is definitely a competitive advantage.
2. Reduce False Positives
False positives can potentially block legitimate customers. With the use of AI in the latest payment systems, merchants can take advantage of email analysis, data enrichment, and geo-tracking in order to determine the “true intentions” of a buyer. Having a top-of-the-line risk management system to confront chargeback abuse.
3. Making It Mobile-Friendly
More online shoppers are using their mobile phones for online shopping. Creating a mobile-friendly site is still an afterthought for most retailers. Merchants should determine their customers’ needs, thereby personalizing the shopping experience based on their location, including the currencies and payment methods preferred by these customers.
4. Offer More Payment Methods
Simply put, customers want the option to pay in a variety of ways. It is also known that almost half of online shoppers will abandon their cart if their preferred method of payment is not offered. The more options and convenience are offered at the time of checkout, the more likely these consumers will come back.
The transaction process is where most customers are lost, sometimes for good. By implementing these aforementioned tactics, merchants will enhance the customer experience, converting casual shoppers into loyal customers.