Understanding Payment Friction: What It Is and Why It Matters
Ever wondered what makes some payments harder than others. It could be payment friction - a catch-all term for anything that makes paying less than easy. You know what it feels like - you shop, you love, you want to buy now…and then something delays your payment. Maybe the checkout page loads slowly, maybe you’re not sure what to expect after entering your card details.
Or perhaps, there’s a long KYC process or confusing information. The point is, payment friction happens all the time - and at every step of the payment process. From a business perspective, it can feel like there are millions of reasons why a customer abandoned their cart.
But in reality, most of these issues come down to too much friction in the payment flow. Now, this might sound counterintuitive but there needs to be just enough friction for customers to trust your brand and products - but not so much that it puts them off buying from you again. There are two main types of friction in payments - good and bad friction. Good friction is likely when there are enough checks in place for customers to feel secure about their purchase and their data privacy.
Bad friction, on the other hand, is when there are so many additional steps that a customer has no choice but to leave. The way I see it, the most common way to spot bad friction is when your customers say that it’s “too much work” or “taking too long” or “very complex”.
This is likely when they’re asked for too much information, subjected to inefficient fraud monitoring processes or unclear checkout flows. Bad friction can also happen because your systems are too slow or your payment provider has restrictions on certain types of payments.
That’s where zero (bad) friction comes in - it ensures that your customers have a seamless shopping and checkout experience, while still feeling comfortable sharing their data with your business. This also guarantees that they’ll come back more than once.
Streamlining Checkout Processes for Enhanced User Experience
Ever thought about why your online cart sometimes sits abandoned for days. Probably had second thoughts and then got distracted, or you might have found the checkout process too confusing or tedious to bother. Either way, there are many reasons that could come into play - even the tiniest of details can make a big difference here. That’s why checkout processes need to be smooth, effortless, and really quite simple - almost like buying gum at the store.
The checkout process starts at add-to-cart and ends once you’ve received an order confirmation. It includes everything from payment authorisation to shipping method and even estimated delivery details. It might appear to be a straightforward journey but it is the very reason behind most failed conversions on e-commerce websites.
What happens when this process isn’t seamless is not just limited to a ‘bad user experience’, but a brand’s reputation could end up taking a hit too. Nobody wants that, right. So what exactly do users want when it comes to checking out. A simple way to put it would be that they want a checkout process that lets them do what they came for (buying something) without any unnecessary interruptions.
At this point, don’t we all just want things to be easy. It seems like the world is probably complicated enough as it is.
An ideal checkout process would have clear text (including information on shipping charges), options for users to create an account or simply check out as guests, different payment methods (including cash on delivery), shipping address pre-filled in case of an existing account, no unnecessary forms to fill and minimal clicks needed for placing the order. The way I see it, it is also worth mentioning that today’s younger audiences prefer making payments through newer, more convenient methods such as digital wallets and cards or quick bank transfers through upi. If brands stick with traditional payment gateways and don’t adapt to newer ways that are relevant right now, they risk not just losing out on potential sales but could also risk appearing as outdated and untrustworthy.
The Role of Mobile Payments in Reducing Friction
What makes a seamless payment experience. Of course, your checkout process needs to be secure and user-friendly. But, it doesn’t end there - with the rapidly evolving needs of customers, today’s businesses must also ensure mobile payment compatibility.
I Reckon It appears as though mobile payments are rather essential for a truly frictionless process. While online stores often have perfectly streamlined and user-friendly desktop and mobile websites, they may still have high cart abandonment rates. This may be due to complicated checkouts - requiring users to fill out excessive details, which could be fairly overwhelming or inconvenient for some. Mobile payments help eliminate this by storing details safely, so all users need is comparatively their phone or card - well, and, mobile payments help reduce costs associated with credit or debit card payments for businesses.
There’s also the added bonus of increased security - not just for you, but also your customers - since banking institutions do much of the heavy-lifting when it comes to security for both parties. While it may seem like a complex process - it’s fairly easy to set up. All you need is typically a trusted provider with good customer support, that can make your business more accessible.
Integrating Multiple Payment Options: Catering to Customer Preferences
Do you know what’s more annoying than waiting in line at the register while a cashier fumbles for change. Not having a way to pay at all. That’s the slight nightmare that customers face when their payment preferences aren’t being met. People might stick around for a little bit, but quickly leave when they realise that their digital wallet isn’t accepted or if cash transactions aren’t supported.
Providing multiple payment options may seem like a small decision, but it can make a world of difference in people deciding whether to stay or go. There’s also a certain level of consumer inclusivity when it comes to catering to people’s financial accessibility - you really don’t want to miss out on future interactions with someone because they had a bad experience once. Considering e-wallets and mobile payments are potentially becoming more popular each day, it’s more important than ever before to cater to these preferences.
Some may argue that setting up cashless, cardless payments isn’t worth the time and money. But think about how often you reach into your bag or pocket to fish out your phone and pay for something online - twice, thrice a day. Maybe four or five times if there are quick bills that need paying. The way I see it, nobody wants to be limited by just credit cards or debit cards anymore, which is why nfc support, upi, qr codes and instant money transfers are growing as much as they are.
Creating an omnichannel payment experience may not be the simplest thing for a business owner to do, but it does pay off in the long run (no pun intended). Making sure your customers’ needs are met at checkout is an easy way to keep them happy - and coming back for more.
Utilizing Technology to Automate and Simplify Transactions
Do you remember the last time you paid for something - like a meal at a restaurant or an impulse buy at the mall. Did you just tap your card and walk away with your receipt or did you have to fumble around with your card, type in your pin, sign something, or worse - fish out some cash. It seems like a fairly basic process that we all do every single day.
But there are a lot of moving parts and more than one thing can go wrong. You could lose your wallet, forget your pin, pay more than you intended to, use the wrong credit card, or not get a receipt. All of these issues can be solved - fairly easily too - by using technology.
And it's probably already happening in some ways without you even noticing it. That's how seamless it's supposed to be. Imagine having automatic payments set up for everything from buying groceries to dining out to shopping online.
No hassle about remembering due dates or paying late fees because technology is taking care of all of it for you. Having it all set up and automated just means there's one less thing on your mind so you can focus on things that matter more. And it doesn't stop at paying for things in person at stores or restaurants either.
Technology simplifies all sorts of payment processes from handling bills, payrolls, government transactions, recurring subscriptions, transferring money between accounts and individuals - basically anything to do with payments and finances. Whether it's using a digital wallet like Apple Pay or Google Wallet or setting up automation with smart devices and AI technology like Alexa or Siri - it's definitely become much easier over the years to rely on technology to handle things for us.
It's also much safer than carrying around wads of cash on us at all times because there's always room for human error there but the margin of error is much smaller when you're using tech instead.
Analyzing Data to Identify and Eliminate Payment Bottlenecks
Why does the payment process get stuck at certain points and why do some transactions go through seamlessly. I think it's fairly important for companies to analyse data to pick up on patterns in user payments. Payment bottlenecks can rather make or break customer experiences. So, it makes sense to try and smoothen the transaction process as much as possible.
Sort of. There are fairly many reasons customers might face payment delays or issues - these could be external factors like server outages, invalid credit cards, fraud, etc, or internal ones such as bad design or too many steps. Even poor communication during payment stages is an internal flaw that can cause a loss of credibility and trust among customers. This also has a knock-on effect on your bottom line.
But when there's data being used and analysed properly, it's easy to identify things like what device users are using, where they're based, which payment gateways are being used, whether they're dropping off at the last minute, and more. These touch points and data gleaned can help you rethink the design and process to make the flow easier for all kinds of customers. It appears that a solid foundation of these tools coupled with proactive problem solving can go a long way.
It all boils down to using information well - is it being gathered in the first place. How is it being analysed. Are you using it efficiently enough.
Is this driving change. If not, perhaps it's time to take stock of this particular aspect of your business so you can fix those pesky bottlenecks.