By Sumit Arora
PXP Financial
When you look at the customer conversion line, there are many moving parts and hundreds of factors to consider. Understanding the critical four steps is the key to a successful conversion. The success of ecommerce merchants is down to how well they can convert their customers into buyers. After all, it is not simply a matter of attracting the customer onto the storefront, the really important step is in the final mile—when the customer is at the checkout. It is at this vital point that the customer will either make the purchase or break from it and go elsewhere.
To maximize the former, the following critical steps are needed: checkout user experience (UX), currency, payment method and authorization optimization. Perfect these steps, and the customer will have a pleasant payment experience, and the merchant will gain a new sale.
The first port of call for a more effective checkout is the UX, as customers will be affected by this before they even reach the checkout. When a customer is shopping, the UX of the entire ecommerce site is influencing the customer's psyche and whether the individual is willing to keep going. An ugly or confusing storefront is more likely to turn shoppers away than a simple, efficient one.
This same logic can be applied to the checkout page, as the last thing customers want to deal with is confusion when it comes to their funds. They want to know how much this will cost them and how they can pay, and that is that. The more information that can be included on one page the better. A good checkout page should have simple language and display the product you are buying, the final price being paid (with VAT distinction where applicable), and all the payment methods available, along with an option to change or add local currencies.
Make sure you are not redirecting customers to an outside portal. Anything that takes the customer offsite must be avoided. Not only might it worry customers and scare them away, but it also delays the checkout process and may simply make customers leave out of frustration. This is a vital point. Always keep the customer onsite.
In the last section, I mentioned giving customers the option to change or add local currencies on the payment page. This is something a lot of retailers miss, and it is a big reason for customer cart abandonment. If you are a retailer based in the UK, it might be simple to think you only to include £'s on your checkout, but that would be a mistake. The internet is global, and you may have shoppers from all over the world browsing your retail page—shoppers who become concerned when they don't have the option to pay in their local currency.
If shoppers don't see their own currency they are more likely to leave the shop. There can be many reasons for this: a different store might have the same product in their currency so they feel more comfortable buying it there; they may need to leave to do the exchange rate calculations themselves and never return; or the shopper may perceive that products are cheaper in their own currency as they have a better understanding of its value. All of these can cause checkout abandonment. And that does not even include authorization issues, as some issuer banks may block a card if they see it making a purchase in an unusual currency.
PXP research has found that merchants who went that extra step to include specific currencies in their ecommerce sites had better sales, especially if they did more than simply add an option for € and $.
We are in an era where open banking has caused a boom in the payments space, and there are now more payment options than simply Mastercard and Visa. While almost every ecommerce store offers the option to pay using debit or credit cards, how many have PayPal integration, support Apple and Google Pay, or have an option for interest-free credit lending?
There are so many alternate payment methods (APM) out there now, and each region has seen different trends in the payment space. In Spain, for example, PayPal and credit cards from local Spanish banks are the most popular choice of payment as they have a stronger support network than international banks.
However, this isn't an instruction to simply add every APM under the sun and assume profits will increase. There are other factors to consider. For example, what industry is the payment for? If it's a one-off payment, then anything might go, but if it's SaaS, will the customer really want to use anything other than their main bank, where they can guarantee a constant stream of funds? Thinking about the type of business you are and following the buyer experience are important considerations when deciding how many and which APMs to use.
While the previous three steps can be easily connected as customer facing factors, the authorization of a payment is the behind-the-scenes next step in the sales process, and the final one before a payment is confirmed. This makes it arguably the most important step, because you could master each of the previous steps, but the customer could still become blocked from making a purchase.
There could be many reasons a transaction is declined, and it's important for a retailer to understand all of them. There could be an integration- or API-related bug interfering in the process. The payment provider could be experiencing downtime at that moment, or the authorization might be so slow that the customer simply gives up and goes elsewhere.
It could even be as simple as an issuer soft declining a transaction, which could either be because of country-specific regulations or fears of fraud taking place. For example, going back to the point on local currencies we found that the successful authorization rate when using a local currency is 91.7 percent, while it is only 76.17 percent when using a foreign currency – a 15.59 percent drop.
By making use of these four steps, you can optimize your checkout and greatly improve your customers' experience, which will lead to much better results for everyone. 
Sumit Arora is CCO for PXP Financial. For more information on using local currencies to improve conversion, please see the PXP blog at https://info.pxpfinancial.com/blog/how-localising-prices-improves-conversion.
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