TrueLayer research: merchants lose out from poor payments experiences as frustrated shoppers abandon carts
Open banking specialist, TrueLayer, has published research revealing the gap between consumers’ expectations and the reality of payments experiences, and how this is affecting merchants.
The company commissioned an online survey of 4,304 consumers in 10 countries. Of these, 2,000 were in the UK and the others sampled across Germany, Spain, France, Finland, Sweden, Norway, the Netherlands, Australia and New Zealand.
There was also a survey of 150 companies offering online payments in the UK, Europe, and Australia/New Zealand.
All were engaged in e-commerce, iGaming, financial services, or crypto investing. Additional insights came from three online focus groups of experts in e-commerce, financial services, and iGaming.
It was found that nearly nine in ten consumers are frustrated with their online payment experiences.
With 55% of consumers saying they would abandon their transactions because of this, there is a clear need for merchants to explore alternative payment methods as a way to elevate their customer experience and drive continued growth, TrueLayer argues.
This frustration can lead to real impacts for merchants; 73% of consumers say that slow or frustrating payment processes will make them more likely to abandon a transaction and try elsewhere. 56% feel that poor payment experiences make them less likely to remain loyal to a brand.
Security, speed, trust and convenience are the key factors consumers look for in their payments experiences. Of these, security is the most important factor, as identified by 64% of those surveyed.
For merchants too, security is paramount in reducing fraud. Regulators have started to introduce new requirements to help combat this - including strong customer authentication (SCA) mandates for online card payments.
However, the research suggests that some merchants have struggled with implementing SCA and that this has increased payment friction. The problem is particularly acute for smaller companies. 73% of merchants with 250-499 employees reported declining conversion rates from SCA.
For companies with more than 500 employees, that figure drops to around 54%. It's clear that for smaller merchants in particular, balancing seamless payment experiences with security requirements is crucial.
In addition to authentication, the need for a customer to repeatedly insert payment details is a chief issue according to 59% of those surveyed.
Consumers voiced issues with having to enter details multiple times during a single transaction, as well as having to enter details at every transaction despite making repeated purchases with a merchant.
Nadja Bennett, Strategic Accounts Director at TrueLayer, says: “Today’s report reveals the huge gap that exists between consumer expectations of the payments experience and the reality. This experience gap has significant consequences for merchants in terms of conversion rate, brand loyalty and ultimately, their bottom lines.”
“Whilst strong customer authentication rightly reflects the need to combat fraud, merchants have continued to struggle with its implementation. Alternative payment methods like Open Banking can deliver on consumer needs and expectations, while maintaining security and simplicity for merchants of all sizes.”
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