The online shopping cart is full and yet the purchase does not take place at the end of a long process. Trade loses a lot of money every year by the abruption of the check-out process. But what is the reason why the customer does not buy anything in the end? The fact that they do not use their credit card in the end is mainly due to a lack of integration of this payment method. The payment providers cannot like this!
The payment platform Stripe has published an analysis of the checkout processes of the 100 most important E-Commerce websites in Germany. Questions included, for example, whether credit card types are automatically recognized during the check-out process, and whether type errors during the payment process are actually indicated in real time?
In selecting the top 100, Stripe was guided by the Alexa rankings for Germany. The pages with the highest reach where customers can purchase products or services were taken into account. Many Webshop-operators and credit card providers will not like the result:
Only two of the hundred websites examined had an error-free checkout process. More than 90 percent of the largest German E-Commerce websites make at least three errors in the payment process, some even more.
All in all, the study identified twelve different errors that make the credit card payment process more complex and thus lead to friction losses and poorer conversions. The most common errors include the lack of real-time detection of incorrect credit card numbers and the lack of numerical entry of the validity date. While customers in stationary trade are increasingly getting used to paying with Apple Pay or Google Pay, these are hardly offered at all in the German online trade.
Possible economic losses
Apple Pay is only being offered by a good two percent of the largest websites in Germany, Google Pay even just by over one percent. Both offer the advantage of being SCA compliant. “SCA will undoubtedly help to combat fraud on the Internet. On the other hand, however, the economic losses associated with the new regulations due to lower conversion rates during the check-out processes could amount to an additional 57 billion euros across Europe,” explains Felix Huber, Head of Central & Eastern Europe, Middle East & Africa at Stripe.
Finally, the period of grace of the new EU payment regulation, Strong Customer Authentication (SCA), for banks and merchants ends at the end of 2020. Strong Customer Authentication stipulates a two-factor authentication for the majority of all online payments, by 31st of December 2020 the latest.
The detailed analysis shows:
- In 56 percent of the websites, it was not possible to manually enter the expiry date of a credit card. In most cases, there was only a drop-down-menu, which slowed down and complicated the input. Nevertheless, the figure has improved significantly compared to 2018 (74 percent).
- In 52 percent (2018: 67 percent) there was no real-time detection of invalid credit card numbers.
- In 44 percent (2018: 61 percent), the credit card type was not automatically displayed after the number was entered.
- In 41 percent (2018: 47 percent) of the websites tested, it was even possible to enter expiration dates of credit cards that lie in the past – an error that is particularly easy to correct.
- 27 percent (2018: 18 percent) of the check-out processes give no indication of where the credit card’s verification number can be found. For inexperienced Internet users, this can easily lead to a cancellation of the purchase. However, this is a mistake that could easily be corrected.
Conclusion: In the payment process of many Webshops there are gross errors and negligence, which are also at the expense of the credit card providers. It is not only the trade that is losing a lot of money as a result. Payment service providers, too, must have an interest in ensuring that the trade makes timely improvements, also in regard to SCA.