.svg){kind=icon}
At Checkout.com we are proud to partner with a wide variety of incredible businesses, serving customers all around the world. Through these partnerships we have observed there are many critical sales periods that punctuate the year. Any missed sale is revenue lost. Performance matters every day. That informs our approach, so we treat every day like peak season.
Having said that, ecommerce payment processing comes into sharp focus during the official peak season: the shopping sales period beginning with Singles’ Day on November 11, and ending with Cyber Monday on December 2 2024.
Outside of the peak season rush, payment channels don’t always get the attention they deserve – they’re not as exciting or eye-catching as marketing materials or seasonal product selections. Yet the technology behind payment processing is the key to earning maximum revenue at this critical time of year. Why? If your checkout is not a smooth and secure process, your customers will switch to your competitors – and may never return.
So, for businesses looking to make those final adjustments to your checkout experience to nudge conversions towards the stratosphere, here are five practical tips to help you make the final preparations for the peak season rush.
1. Check the local payment experience for each market
Just like preferences for cuisine, clothing, and other elements of culture, payment method preferences vary widely depending on where a person lives. A growing body of research reveals that customers of particular demographics (delineated by age and geographic location, for instance) possess distinctive desires for online payment options.
Understanding where sales will occur is vital, as payment behavior varies dramatically from market to market. You need to ensure the following important features are in place:
- The checkout flow is localized (text is in the customer’s local language)
- Preferred payment methods are offered in each market
- Customers can pay in their local currency
Without these, you risk alienating customers and losing revenue as a result. Our checkout page component Flow automatically adapts to your customer’s local language, currency, and preferred payment methods. This increases the rate of customer conversions, thanks to an improved sense of familiarity and trust in the payment experience. Our top ten merchants using Flow Direct saw an average acceptance rate increase of 4.8 percentage points (compared with the same type of traffic without Flow).
As part of your longer-term payments strategy, you should consider how to incorporate local acquiring into your pay flows. Our research found 83% of merchants lack direct access to a local acquirer in every market they operate in – which can negatively impact acceptance rates.
Key takeaway: Check you are offering the appropriate local payment methods, and the checkout page is in the customer’s local language.
2. Choose the correct sales channels
It’s easy to assume you know where to find your customers. But you need data to back these decisions. Our Peak Season Trends report tracks digital economy growth, and found great variation in the places people choose to shop, based on their age and country.
Our specially commissioned research looked at non-essential consumer purchases, and found:
- Two in three Gen Zs don’t regularly shop in physical stores
- 74% of all adults in China most usually shop on social media
- 39% of all adults in the US most usually shop on marketplace platforms
- 52% of Millennials in the UAE usually get information about the peak season sales via social media
Whether or not to invest in social media platforms as a sales channel depends on your target demographic. Out of all consumers, roughly half (43%) usually purchase non-essential goods or products via social commerce (such as Instagram, YouTube or TikTok shop). This kind of statistic makes it a 50-50 chance that you get your investment right. For that reason, it’s worth going deeper into the data to find out exactly who is spending money via social media conversion.
If you break the data down by country then just 25% of UK adults, and 27% of US adults, regularly use social media as a shopping channel. Instead, Britons show a greater preference for shopping on a direct-to-consumer website: 49% of respondents in the UK said this is how they usually purchase non-essentials. The most common response for US consumers was to shop using an online marketplace (such as Amazon or eBay), as detailed above.
Consumers in the UAE broadly aligned with the average of all respondents; 43% usually use social media to buy non-essentials, and 46% use an online marketplace. Engagement with social media as a shopping channel is, therefore, significantly higher among UAE adults compared with those in the UK.
For an even more detailed breakdown of shopping channel preferences per age group and geographical location, download our Peak Season Trends 2024 report.
Key takeaway: Align your investment in sales channels with the preferences of your target customer demographic.
3. Refine your retry strategy
Retries are a challenge worth facing. Use them too much, and you’ll end up with excessive scheme fees. Don’t make enough use of them, and you could turn away customers at checkout – and they’ll never return. Bearing in mind you are charged for every single retried payment attempt, you must carefully choose which payment types to retry. Certain payments will never be accepted, and should never be retried. These include declines for reasons such as invalid account, frozen account, and insufficient funds. Believe it or not, some payment flows can actually be configured to automatically retry payments in this “do not retry” category. Do not be one of those merchants. Check your retry setup before peak season, so you don’t end up with excessive retry fees.
On the other hand, retries can be a vital tool for rescuing payments wrongly flagged as fraudulent. This is known as a “false decline”. And it can really hurt your revenue: two in five customers are reluctant to return to a website or app following one false decline.
It’s important to ensure your retry strategy aligns with your business goals: converting customers ready to make legitimate payments while ensuring you don’t retry payments destined for failure.
The above relates to customer-initiated payments. However, if your business takes payments on a recurring schedule, your tactics will shift. For merchant-initiated transactions, you can configure scheduled retries to reduce the chances of failed payments due to reasons such as insufficient funds.
Key takeaway: Double-check your transaction retry logic, and make changes where it serves your business goals
4. Ensure smooth yet secure authentication
The most important time of year to balance easy checkout and reduced chances of fraudulent payments is peak season. It can be tempting to reduce “friction” at checkout to the bare minimum, ensuring it’s extremely easy for customers to submit payment via digital channels.
Our research found more than half (58%) of shoppers were permanently deterred from returning to a website or app because of a slow and complex authentication process. So, the easier the payment process, the better, right?
Not quite. Your business is liable for losses from fraudulent payments; you’ll lose the product if you’ve physically shipped it out, and you’ll need to reimburse the customer for the transaction value. When it comes to checkout conversion, merchants must apply caution. You don’t actually want a 100% acceptance rate, because your business will suffer from fraudulent payments.
In Europe, merchants taking customer-initiated payments must comply with Strong Customer Authentication (SCA) rules. Examples of payment types that may need an additional layer of user authentication include credit card payments, bank transfers, and online debit card payments.
See, shoppers want a convenient checkout – but they also value security. The challenge is to manage SCA compliance while providing the best payment experience possible. So if a payment request is soft declined because 3DS data is needed, we recommend you automatically request additional authentication then retry the payment, rather than deliver a “payment declined” notice. This can help to improve the customer’s experience, increasing the chances of repeat business and brand loyalty.
Yet, not every online payment in the European Economic Area must go through SCA. You can look into SCA exemption strategies to learn about when to skip the 3DS challenge.
Key takeaway: Build an authentication flow that ensures security without too much friction at checkout.
5. Control payment processing costs
Maximizing return on investment may not seem like a top priority for peak season, when so many pressures compete for attention. Yet, wasted spend is of no benefit to your business. That’s why you should regularly check if you’re getting the best value from your payment services. You may be paying additional scheme fees without realizing (for example, on excessive retries, as discussed above). Or you could look into least-cost routing as a way of bringing your payment costs into line with business goals.
Our detailed guide, 8 ways to optimize interchange and scheme fees can help you find quick wins as well as identify long-term cost management strategies.
For even more practical advice and strategies on getting the best value for money on your payment processing, listen to our webinar, Controlling your payment costs with Christopher Uriarte, Partner at Glenbrook Partners.
Key takeaway: Examine your invoices, and look into strategies to maximize return on investment in payment processing.
Power through peak season with Checkout.com
There's a lot retailers can do to ensure their payments are performing this peak season. At Checkout.com, we focus on advancing your payment tech stack to ensure secure, compliant, and reliable payment processing. Our standalone offerings include Authentication, Vault (for payment instrument storage), Flow (for improved conversions at checkout), and more. You can maximize revenue this peak season and beyond with our scalable payments technology and in-market expertise.
