Despite recent innovations in e-commerce and payments, most people still buy online the “old-fashioned” way--digging into their wallet, pulling out a credit card, and typing in the number, expiration date, and CID. However third-party payment methods are quickly offering innovation, allowing buyers to purchase online without squinting at or scanning in a credit card.
According to a 2017 study from the Baymard Institute1, there’s “a clear sub-group of users now relying strongly on third-party payment methods.” In fact, 8 % of online shoppers abandoned their carts in the last quarter because their preferred third-party payment option wasn’t offered.
There are several reasons why third-party payment services have become instrumental to the online retail industry, but the primary reason is security.
Third-party payment options take all the guesswork out for users—and can make your checkout process seem even more safe and convenient by association.
It can take a lot of time and effort to establish trust with consumers, especially if you’re a small company. The third-party payment options take out a lot of the guesswork for buyers—and can make your checkout process feel even safer and convenient by association. Here are some checkout scenarios that greatly benefitted from offering third-party payment options.
According to the Baymard study, international users are particularly likely to use a third-party payment option when placing an order from another country. These users turn to a third party because an independent business can provide additional security in the event that something goes wrong with an order. To quote one international customer from the research study:
“I think it’s easier. Also, if something happens where they claim it’s shipped, but I don’t receive it— what do you then do? I’m not a lawyer. So what do you do in that situation?”
A third party because an independent business can provide additional security in the event that something goes wrong with an order.
Third-party payment options offer assurance around a retailer’s security and reliability; not only that, these payment options offer ease and convenience.
In case of credit card issues
It’s always good to have a Plan B. In case of credit card errors, third-party payment options can mean the difference between a forgotten cart and a successful transaction. According to the Baymard report, up to 4 % of all users experience credit card validation errors. A third-party payment option can be a safe alternative in case something goes wrong with a user’s preferred payment method. As Baymard explains, “This fallback option proved particularly effective for the group of users who had brief, prior experience with the third-party option.”
That’s why, as Baymard explains, 83 % of the top 60 grossing e-commerce sites use third-party payment options. Offering at least one third-party provider during checkout can reduce the risk of cart abandonment, especially if your customer base is international. Want to discover other ways to make the checkout process better? Read the rest of our series or download the Baymard report here.
1 Checkout Optimisation and Reducing Abandonments (2017), commissioned by Amazon Pay