The Psychology of Online Payments: Tips to Reduce Cart Abandonment

There’s nothing more frustrating than an abandoned cart. You’ve done all your sales and marketing right. The customer is about to buy. Then, bam! Something happens. The customer vanishes and all you have to show for your efforts is an abandoned cart. But it doesn’t have to be that way.

According to research, up to 70% of online transactions end with the abandonment of the shopping cart. Even though a proportion of shoppers return to the abandoned cart later and complete the purchase, a greater proportion of them don’t. This represents a significant loss of sales to all kinds of online retailers, so it’s important to understand the psychology of ecommerce to improve your conversion rates.

What is cart abandonment?

Cart abandonment doesn’t need much explanation – it’s when a shopper browses your website, adds items to their online shopping cart but then for some reason abandons it before completing the checkout process. User experience (UX) psychology can be used to identify a range of reasons for this, but the result is always the same – a lost sale for the retailer.

What are the reasons for abandoned carts?

With such a high proportion of online transactions being abandoned at the last hurdle, retailers have a lot to gain by understanding, then combatting, the reasons why. Of course, there’s more than just one reason, and some of the shoppers who abandon their shopping cart do return later to complete their purchase. But by taking measures to reduce ecommerce checkout friction, retailers can increase sales and profits.

These are some of the most prevalent cart abandonment reasons:

1. Unexpected additional charges that are too high

Cost of living is an issue everywhere, and when an unexpected charge or fee is added on at the checkout, cash-strapped shoppers are going to balk. These can be quite legitimate charges, such as tax or shipping, but if the buyer isn’t expecting them, he often steps away.

The solution: Be transparent about additional charges from the very outset.

2. Pricing is too complicated

With complex orders, customers can find it difficult to work out the entire cost of the order until they reach the checkout, and at this point they may decide the price is too high. Import taxes and currency charges can make the order unviable.

The solution: Upfront clarity about total costs.

3. Checking out takes too long

Order details, name, address, email address, delivery options, payment options… Sometimes it feels like there’s no such thing as making a quick order and for customers in a hurry, this can put them off. If your process is too long and complex, customers will drop off.

The solution: Streamline your checkout process or use a checkout solution that can store customer information.

4. Can’t deliver on time

We live in a world of instant gratification and next-day delivery, so if the delivery date is too far in the future, customers can lose interest in making the order.

The solution: This isn’t the easiest problem to fix as it will depend on your product and your logistics issues, but it’s worth putting the effort in if you can.

5. The customer needs to open an account

Customers who are in a hurry or don’t anticipate repeat orders from your website don’t want to spend precious time filling out forms to open an account with you. They want friction-free checkouts, without having to submit reams of personal information and choose a password which they won’t be able to remember.

The solution: Offer a guest checkout option for customers who are in a hurry.

6. The customer doesn’t trust the website

It can be hard to know who to trust online and ecommerce transactions often require submitting sensitive information. Shoppers can become suspicious of websites they don’t know and this is another common reason for cart abandonment.

The solution: Use customer testimonials, trust badges, warranties and install an SSL certificate to build customer trust – or use a well-known checkout platform that the customer might already trust.

Use online payment psychology to recover abandoned carts

With high levels of cart abandonment, there’s a strong argument for using consumer ecommerce psychology to find measures to minimize it. The amount businesses lose from cart abandonment varies across countries and by type of product, but it’s a considerable amount. Some customers return and then make the purchase, but others go on to purchase from competitors, either online or in-store, so stopping customers from abandoning their cart in the first place is critical in fighting off competition and unlocking global growth.

Using a trusted payment solution such as Payoneer can help streamline your checkout process and support international transactions.

Pro-active measures you can use to prevent cart abandonment:

• Integrate a trusted payment platform, such as Payoneer, into your checkout process.
• Use a payment platform that offers local receiving accounts to save customers from dealing with currency conversion.
• Offer free shipping for orders over a certain value.
• Ensure transparency of prices and returns policy at an early stage.
• Streamline your checkout experience to reduce friction. Payoneer solutions can integrate into existing ecommerce platforms to help simplify payments.
• Analyze abandoned carts to determine cart abandonment reasons.
• Target those customers with follow-up emails and online advertising.
• Use ecommerce color psychology to assess the design of your checkout pages.

Improving your checkout process can significantly affect your conversion rate, so do everything you possibly can to improve the user experience. Adding Payoneer as a payment option can help make cross-border transactions easier and improve the overall payment experience for customers.

Disclaimer: Unless permitted by applicable laws, Payoneer entities will not operate payment services, financing services, or “financing-like” services, in jurisdictions where they do not have the necessary licenses or authorizations. Additionally, any Payoneer entity will not provide services to customers originating from jurisdictions outside those where the relevant Payoneer entity is authorized to operates. Please note that the Checkout service (this “Service”) is provided by Payoneer Inc., utilizing a third-party solution.  This Service is offered exclusively to entities based in the United States and Hong.