In e-commerce, specific seasons have a significant impact on global sales. For instance, peak periods like Black Friday and the holiday shopping season account for over 25% of annual retail sales in the United States. Similarly, occasions like Singles’ Day and Ramadan present unmatched opportunities for businesses worldwide to maximize revenue. To capitalize on these occasions, it’s crucial for every business to ensure its payment processes can handle a sudden influx of transactions.
In this article, we will explore several effective strategies to enhance checkout rates, minimize fees, and keep customers satisfied during the shopping season and beyond.
Guarantee seamless and reliable experiences
A sudden surge in traffic can place unexpected strain on even the most robust payment system, revealing vulnerabilities that may have previously gone unnoticed. What might seem as a well-functioning system can quickly falter under increased demand, leading to lost sales. However, these challenges also present significant opportunities for businesses ready to tackle them. By proactively identifying and addressing these gaps, businesses can provide every customer with an excellent experience and drive additional revenue effortlessly. Here’s how to prepare your payment processes:
1. Have the right PSPs in place
While many payment service providers (PSPs) offer a comprehensive range of payment methods, it can be tempting to adopt a “one-stop shop” approach. However, relying on just one PSP exposes you to potential downtime and high processing fees. If your PSP experiences even a brief outage, it can lead to immediate issues for your customers. In fact, 33% of online shoppers in the US will abandon their purchase if the payment fails on the first attempt.
For merchants generating over $50 million in annual revenue or processing more than 100,000 transactions monthly, it’s advisable to work with multiple PSPs. On average, enterprise merchants work with four or more processors. Ideally, you should be able to integrate PSPs quickly and at scale through a unified integration layer. Start by ensuring you have a variety of options to cover your key markets, optimize costs, and ensure that shoppers can always complete their purchases. Discover more detailed tips on optimizing your PSP strategy here.
2. Increase approval rates and reduce fraud with network tokens
A secure method for storing payment details can significantly impact your business, especially during peak times when speed and convenience are critical. Network tokens replace traditional card numbers with unique, encrypted identifiers, enabling businesses to securely store sensitive card details across multiple PSPs and acquirers.
One key advantage of network tokens is their ability to update in real-time. When a customer’s card is renewed or replaced, the token automatically refreshes, minimizing the risk of failed transactions. This is particularly valuable during high-demand periods, ensuring seamless transactions without customers needing to manually re-enter their details. For subscription-based businesses, tokens also help minimize involuntary churn, safeguarding revenue from lapsing payment methods.
By reducing checkout friction and ensuring a secure, efficient payment process, businesses can handle high transaction volumes, decrease processing costs, and elevate customer satisfaction.
3. Tailor your payment routing
Next step is to review your routing setup. Making adjustments to your payment routing can bring substantial benefits. Routing involves directing payment transactions to the optimal PSP based on predefined criteria, such as transaction type, amount, currency, and geographic location. By implementing dynamic routing, businesses can maximize payment authorization rates, minimize processing fees, and mitigate the risks of PSP lock-in.
Start by analyzing the factors that impact authorization rates, such as geography, payment method, and transaction type. Then, identify the best-performing PSPs for each scenario relevant to your business. With solutions like Payrails, you can implement dynamic routing rules and optimized workflows to ensure transactions are directed to the most effective PSPs, boosting authorization rates and improving payment success.
4. Enable automated retry
As shown above, customers are quick to abandon their purchases if they encounter payment issues. Imagine a shopper who goes through the effort of entering their card details, only to have their payment unexpectedly declined. This scenario can create a significant barrier to completing the sale. Fortunately, many payment failures can be resolved through automated payment retries.
Approximately 80 to 90% of payment failures are classified as soft declines, typically caused by minor issues such as insufficient account balances, card limits, and network problems. In many cases, simply reattempting the transaction can lead to success. We recommend implementing automated retries that attempt a failed transaction without requiring additional input from the shopper. Refer to the table below for detailed steps to incorporate this functionality into your workflow.
Ensure peak season success with Payrails
Our team of payment experts collaborates closely with merchants to develop highly efficient payment solutions. By ensuring your payment system can handle increased volumes and accommodate various payment preferences, you can navigate the busy season with confidence and deliver exceptional customer experiences that drive revenue. Learn how we can support your growth during this critical time and beyond. Contact us today!
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