The 2020 holiday shopping season is picking up, and consumers are heading online or to reopened brick-and-mortar stores to shop and pay for gifts. They are using everything from cash to mobile wallets to complete these transactions, requiring retailers to race to accommodate a wide variety of payment methods.
Supporting a host of simple and frictionless payment options is often a complicated endeavor from the retailer’s perspective, said Keala Gaines, vice president of global payment services for eCommerce marketplace eBay, in a PYMNTS interview. She explained that consumers do not generally think much about the payments piece of the shopping experience unless it does not work. Friction-filled experiences, however, can actually give retailers key opportunities to engage frustrated customers on a deeper level.
“Consumers expect checkout to be frictionless, fast and secure,” Gaines explained. “It is when [their payment preferences] are not available, they do not feel comfortable…or the process is clunkier than they might expect that we have opportunities to actually delight them by giving them options that will speed that process and make it faster, more secure and more frictionless.”
Contactless Payments And eCommerce
The pandemic may be causing sweeping changes regarding which items consumers want to buy and where, but many of the factors governing their payment behaviors have remained relatively unchanged. Individuals are still paying for purchases using the fastest and most convenient methods available to them, but what they consider to be swift and easy to use is shifting.
More customers are leveraging mobile wallets or other contactless payment options in brick-and-mortar stores since the global health crisis began, Gaines said, and these new habits are filtering into their transaction expectations when they shop online. Many of the newer buyers accessing eBay’s platform in recent months have been likelier to shop and pay via mobile, she said.
“We do see people using instruments on for making a lot of repeat purchases, and we are also seeing increased usage of mobile wallets and things like Apple Pay and Google Pay,” she said. “I think increasingly consumers are expecting those options, and there is synergy between those offline purchases where people are getting more and more comfortable with contactless [payments] and using [digital] wallets and then shifting that behavior into their online purchasing as well.”
Digital sales are already contactless in nature, Gaines said, but integrating support for mobile wallets as they become steadily more popular in brick-and-mortar stores could generate intriguing benefits for eTailers, especially as these methods alter consumers’ behaviors online.
“One thing that is unique with mobile wallets where you are authenticating in-transaction [is that] you typically have to reauthenticate,” she explained. “It is actually a user preference…but the act of paying itself is so fast that I think the authentication step is not a barrier and the overall checkout experience is still frictionless. It is an interesting question: Do you as a customer choose to store a card, or do you choose to reauthenticate every transaction? If the reauthentication process is super frictionless and fast and easy, the process of using a card and using a digital wallet become equally frictionless.”
Contactless options are not the only physical payment trends filtering into eCommerce. The pandemic has also led to a surge in customers who want to pay online and pick up their goods at physical locations, and this development could also give retailers additional customer engagement opportunities.
eBay recently added a pickup tool that uses QR codes, for example. This allows the marketplace to access data about the final aspects of customers’ transaction journeys for the first time, adding transparency and ensuring that buyers truly received their items and that sellers were paid. Tools that meld physical and online experiences are likely to gain more importance to retailers in the future.
Keeping Omnichannel Payments Invisible
Consumers do not always choose the same payment methods, Gaines said, even for the same types of purchases. Customers in different markets may have distinct payment preferences, which is why eBay supports buy now, pay later (BNPL) methods via Afterpay in Australia and PayPal Credit in the U.S., for example. Retailers must not operate as though customers’ payment habits, even those governing specific purchase types, will not change.
“People have really interesting ways that they make their decisions around which instruments and which payment options they use for which types of purchases,” Gaines said. “We do see movement in that, and I think it reinforces the need to make sure that we offer lots of payment choice and flexibility so it is easy to use an instrument on file if you have one, but it is also really easy to change that or add a new one because the way you purchased something in the past is not necessarily a predictor of how you may purchase it in the future.”
Consumers may occasionally leverage novel payment methods for seemingly inscrutable reasons, but one thing is clear: They expect these options to be smooth, secure and available regardless of which shopping channels they use. Tying together consumers’ in-store and online shopping and payment expectations — and addressing their unique concerns when their payment experiences fall short — could go a long way toward fostering customer loyalty, even for retailers that operate in only one channel.