As the eCommerce market is becoming increasingly saturated, the year 2023 calls for smaller eCommerce businesses to think through the tools and re-evaluate solutions for retaining their competitive edge.
Small businesses (SMEs) are an essential part of the global economy, accounting for about 50% of employment and 90% of businesses. To stay at the top of their game during this time of uncertainty, there are several key areas that should remain amongst priorities for eCommerce SMEs, including choosing the right payments partner, a higher emphasis on data protection, and tackling checkout friction.
Choosing the right payment provider
One of the key challenges for small businesses remains to choose the right payment provider that offers multiple payment solutions and can relieve SMEs of the burden of managing many vendors at once. This would enable to have clearer focus on running the business as well as allow them to avoid being overwhelmed by a plethora of complex payments processes.
Simas Simanauskas, Chief Business Officer at ConnectPay, emphasized that this decision should be made with a long-term strategy in mind, especially if there are plans to scale. “In each market, consumers prefer different payment methods, thus already having a payment service provider (PSP) that can offer a wide range of services can significantly cut down potential costs,” he noted.
For example, while having card payments as an option is necessary, in some countries, people may not be accustomed to using cards and instead prefer to use open banking schemes or local alternative payment methods such as GiroPay, Klarna, PayPal, or iDEAL, and others.
Eliminating checkout friction
Today, the average cart abandonment percentage is slightly less than 70%. For several years, customers leaving their shopping carts have been considered a key issue; this will continue to be among the top priorities for SMEs to address. Additional delivery charges, multiple log-ins, and a complex payment process contribute to the high rate of losing sales.
According to Simanauskas, overcoming checkout friction largely depends not only on selecting a payment provider with the right tools to streamline the consumer’s journey, but also keeping in mind the long-term strategy.
“Even if the current focus is on a single market, it’s wise to plan ahead,” he commented. “Selecting a payments partner that is able to cover both local and cross-border payments needs may fast-track scaling in the future, not to mention save costs, as there will be no need to look for other providers. This would also allow maintaining a consistent checkout experience whilst entering new markets.”
Securing payment and client data
With cyber crimes on the rise, developing a cybersecurity infrastructure for any online platform has become paramount. Small businesses account for 43% of cyber attacks annually, according to Astra, placing cybersecurity among the top concerns for SMEs. The true issue lies in small enterprises lacking technical expertise, making it more difficult to detect and respond to security threats.
“Payment data security is a major concern for consumers in the digital landscape. The fintech industry is implementing industry standards, such as PCI DSS 4.0 and 3DS 2.0, and integrating biometrics in payment processing to enhance user experience. This all adds an extra layer of security, however, it’s crucial to remain vigilant and keep the security standards up-to-date, considering how fast new methods of fraud pop up,” commented Simanauskas.
Contactless payments and digital wallets
Post-pandemic eCommerce continues to witness a rapid increase in contactless payments and digital wallets. 73% of merchants prefer customers to use a contactless payment method as customers demand more convenience. Universally, contactless payments are faster than traditional card payments, while digital wallets allow customers to store multiple payment methods, thus causing less friction in the payment journey.
Employing these payment methods helps small businesses increase sales, reduce costs, increase customer reach and give them a chance to compete with bigger companies in the market. According to Simanauskas, the crux of payments that businesses may offer their clients comes down to simply three factors: speed, convenience, and security. As such, SMEs might use the implementation of contactless payments and the most prevalent digital wallet providers to increase client conversion in a specific market.