#Payments30 Jun

What You Need to Know About Payment Processing Conversion Rates

Alisa Tkach

Link between conversion rates and payment methods

Link between conversion rates and payment methods

What is a Conversion Rate?

For merchants, this target action generally constitutes users who begin a purchase vs users who complete a purchase. The conversion rate is a statistical calculation of the percentage of users, buyers, clients, or any other attracted audience that fulfils a target action. The target action can be a purchase, a checkout, among others.

One can calculate the conversion rate by dividing the total number of users who have committed the target action by the size of the estimated target audience, resulting in a simple percentage figure.

The conversion rate translates into a percentage of the number of users who initiated the checkout process (moved to cart, put in details etc.) versus those who paid and completed their purchase. As such, this data is an essential instrument for companies to analyse their performance and adjust their payment strategies, payment methods, or even entire business models to raise this value as much as possible.

Link Between Conversion Rates and Payment Methods

Conversion rates are invaluable in bolstering the convenience of payment methods supporting the target action. If the transaction requires users to pass through multiple pages to checkout, it is safe to say users will get frustrated midway and abandon their carts. 

The result is the need for alternative payment methods (APM), which account for more than 70% of global eCommerce payments in 2022. The latter include digital wallets and cryptocurrencies, local payment systems and gateways.

The underlying convenience and payment process streamlining dilemma is one merchants have to consider when deploying in local markets. There are several ways merchants can increase their conversion rates by expanding the lineup of available payment methods.

As a start, merchants have to consider the payment infrastructure available in the country of their business and the payment system landscape. Allowing local users to pay using methods they’re used to is one way of ensuring a higher conversion rate.

It’s also necessary to include a minimum of three payment options to give users a choice of payment system. These can consist of traditional bank cards like VISA, MasterCard, UnionPay, or more novel solutions like cryptocurrency transfers. Having at least three payment options is a sure way of increasing conversion rates by as much as 30%.

Constant analysis of conversion rates is the key to staying abreast of changing market situations and buyer sentiment. 

Reasons For Higher and Lower Conversion Rates

The reasons for conversion rate fluctuations are many. There are several critical points that merchants must consider to facilitate their general rate values.

The first and most straightforward solution is optimising the website to ensure one’s checkout is completed through a single page with as few clicks as possible.

Having multiple payment options available and updating them based on changing user preferences is vital to tap into new buyer audiences and expand opportunities for existing customers. A study by ECC Koln, states over 50% of customers have cancelled a purchase due to lack of an acceptable payment method. 

Ongoing data analysis is essential to identify weak points in business performance. The ideal timeframe for analysing conversion rates is between two to four weeks, depending on the type of business. One must then analyse the compiled data and adjust the sales platform to better cater to the findings.

Payment Processing Intermediaries

Businesses can have a hard time conquering the payment frontier alone, especially when deploying multiple payment systems and obtaining the necessary licences for their integration into websites. This is where payment processing intermediaries step in as affordable and crucial facilitators.

An online payment intermediary is a third party that facilitates and finalises the payment process for both the buyer and the seller. Essentially, these services are responsible for accepting and forwarding the payment, speeding up the sale process, collecting data, and even forwarding delivery, credit and instalment options.

The advantages of using the services of a payment intermediary include the availability of payment options that many intermediaries provide as standard service packages. Intermediaries also save businesses from dealing with bureaucracy and workflows associated with payment processing, which often slows down the purchase process. 

These services also offer a higher degree of payment security through data security technologies, encryption protocols, firewalls and anti-fraud layers that can seamlessly integrate into business websites.

How Mercuryo Optimises

As an intermediary, Mercuryo can assist with both crypto and fiat solutions giving businesses the best of both worlds and making it as seamless as ever for users to onboard into the world of crypto and complete their checkout process. 

We assist merchants with accepting payment in multiple currencies, with a variety of alternative methods. Specifically, Mercuryo supports payment via debit and credit card (VISA, MaterCard, UnionPay), Apple Pay, and Google Pay, as well as a number of local fiat currencies, allowing merchants to grow their user base drastically and deploy in local markets.

We are continuously optimising and iterating our product, trying to craft the most innovative and efficient offerings for our partners.

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