The hidden cost of checkout friction: PPRO talks solving cart abandonment with local payments

By Nicole Asling, Senior Vice President, Commercial at PPRO

Cart abandonment is one of retail’s most persistent challenges. The average cart abandonment rate is 70%, rising to more than 75% on a mobile device. Research has revealed that friction at the checkout page is a key reason for lost sales, with 19% of shoppers abandoning their purchase at the last stage due to a lack of available payment methods or an overly complex process.

The repercussions of this are significant. Online retailers lose an estimated $18 billion annually due to abandoned carts, with the projected value of merchandise left sitting in online carts reaching around $4 trillion each year.

Retailers are unknowingly losing revenue at the final step of a customer journey, and to fix this, payment optimisation can solve the hidden cost of checkout friction.

The potential of a global e-commerce market

The global e-commerce market is booming, reaching $8.3 trillion in 2025, and shows no sign of slowing down. By 2030, the market is projected to exceed $10 trillion, presenting a major opportunity worldwide.

However, to succeed retailers must unlock a clear, market-specific payments strategy. This transforms the checkout experience and contributes directly to conversion rates, customer loyalty and international expansion.

The importance of an optimised payment experience can’t be understated, especially to reduce checkout friction for cross-border shoppers. 72% of merchants report higher rates of failed payments for overseas transactions compared to domestic ones, driving customers away and limiting international growth.

At the same time, 94% of cross-border shoppers expect to pay in their local currency, while 99% want to use their preferred, customary payment methods. Familiar local payments have become a key distinction between retailers that effectively capture global demand and those who lose customers and revenue at the checkout.

Reducing cart abandonment

Understanding why shoppers abandon their purchases at the last minute is crucial to recovering lost revenue. The two big culprits are checkout friction and limited payment options.

A streamlined process improves the shopping experience and increases purchase completion rates. Every point of friction, from forced account creations to not offering preferred local payment methods, raises the risk of drop-off. Reducing the number of actions required to complete the transaction is key.

Paving the way for a smoother journey includes simplifying user information entry, optimising the website for mobile device users, transparency around pricing and delivery expectations and enabling the right local payment options.

Offering secure and diverse payment methods - such as credit cards, digital wallets, and buy now pay later (BNPL) - personalises the experience for the user and fosters loyalty for the brand. Failing to provide a preferred payment method is often enough to drive a customer away entirely.

Especially when shopping with a new merchant, the user relies on familiar ways to pay to establish trust. Research has found that businesses that offer local payment methods experience, on average, a 12% increase in revenue and 7.4% boost in conversion rates.

Bridging the conversion gap

Combatting checkout friction isn’t always simple, and retailers can face obstacles when implementing local payment methods. While this directly impacts their revenue, it’s possible to solve these pain points.

Failed payments account for up to 11% of lost e-commerce sales, but only a few merchants understand the root cause. By identifying this, retailers can improve authorisation rates and maximise their sales.

In Latin America, cross-border card success rates are disproportionately low because most cards only work with domestic transactions. To solve this, global retailers often work with a payments partner as their Merchant of Record (MoR), which processes transactions locally before transferring the funds to the merchant’s bank account.

Other levers are also available to boost conversions. Advanced features like smart routing, automated retries, and account updates significantly lift approval rates. Meanwhile, offering locally preferred digital wallets, cards, and bank transfer options built to work seamlessly within local bank ecosystems can increase first-time payment success.

Implementing local payment methods and carrying out a global multi-market retail strategy can leave finance teams overwhelmed with operational logistics. Every new market brings a tangle of fragmented systems, and different payment methods generate different settlement files, reporting formats and currencies. The result is a growing web of complexity, where finance teams are slowed down by manual data reconciliation.

The solution lies in investing in platforms that unify reporting and settlement through a single, global API that streamlines data across dozens of sources. It leads to simplified operations, faster cash flow and reduced manual overhead, and in turn accelerates the onboarding of new local payment methods to significantly reduce time-to-market while driving performance at a local level.

Ultimately, to solve checkout friction and unlock international growth, retailers must offer the right local payment methods, supported by reliable technology built to make payments familiar, fast and convenient. Retailers must tailor this to specific high-growth regions to reflect cultural habits, access to modern technologies, and local payments infrastructure that varies across the world.

Your checkout isn’t broken, it just isn’t localised. Start converting more customers with PPRO today.