Pay360: Consumer desires at the payment checkout and how to optimise that part of the shopping journey

The ‘right’ way to checkout and payment options were debated by Tui and Lastminute.com in a keynote panel at the Pay360 trade show in London this week, alongside some research from PayPal showing what the consumer wants. 

“We strive for a simplified one page customer experience (CX) without any pop ups,” said Alexei Jurascheck, Head of Payments Technology at travel firm Tui, during the opening keynote at the event.

“Variable recurring payments (VPRs) via Open Banking are of interest to us in future [or on the UK’s new payments architecture when that refreshed infrastructure finally gets off the ground -Ed.]. We already use Open Banking and APIs in the UK to action direct debits with a biometric authenticator, which means there is no manual entry requirement.”

In Scandinavia, online merchant payments direct from a bank, so-called Pay by Bank functionality is already very popular, said Jurascheck, adding that he’d “love to see it here in the UK, as it is cheaper. But there is no customer demand at present.”    

Sergio Signoretti, CFO and Head of Payments at the rival Lastminute.com travel and experiences company, agreed, telling the conference audience in London that “Account-to-account (A2A) payments offer huge potential. They’re typically costed in cents not full euros [or pounds]. But the question is how best to incentivise this type of payment?” 

The consumer protection angle and commercial model for UK-based VRPs is still to be worked out, as Joe Garner, an ex-retailer, who authored the UK Future of Payments Review, explained to event attendees during the opening conference session.

Consumer demands is another key adoption driver of course. Vincent Belloc, Vice President and Managing Director at PayPal UK, joined the travel representatives during the keynote panel session to share some of his company’s latest research from its E-commerce Index, which shows:

• 71% of Gen Z consumers use social media to make a purchase.

• But they spend less – only 20% of them exceed the £407 a month that UK consumers typically spend online. This figure is up 17% compared to the previous year.

• German consumers are the next biggest online spender in Europe on £308 per month. 

• 38% of Gen Y will drop out if the digital checkout experience is too slow, whereas surprisingly its 21% for the more patient Gen Z, who are also more interested in security – 58% cited it as a main concern vs 54% for Gen X.    

“Some of those customer segmentation results are surprising to me,” said Tui’s Jurascheck.

“We see that Gen X like direct debits, retail stores and call centres and omnichannel is consequently important to us. Gen Z like apps, digital wallets, and payment methods like PayPal, Apple Pay and so on.” 

Buy now pay later (BNPL) is important to youngsters as well. “BNPL has had a dramatic impact on holiday package conversions,” said Lastminute.com’s Signoretti. “It accounts for 50% of our sales now.”      

Conversion rate is crucial and the “name of the game” according to PayPal UK’s Belloc.

“There are 2.6 billion online shoppers in the world and 4.9 billion internet users. 18 million are converted from browsers to shoppers every year,” he said, while detailing the size of the online marketplace.

The funnel is large, therefore, but converting that into sales is what matters. Accepting many different types of payments and enhancing CX, speed and convenience all matter in the digital battle.