​Improving Payment Conversion: How Merchants Can Reduce Checkout Abandonment

Getting a customer to add products to a basket is only part of the challenge for an online merchant. The final payment and checkout experience can determine whether that customer completes the purchase or abandons it.

Small sources of friction can have a significant impact when they are repeated across thousands of transactions. A payment page that is difficult to use, does not offer the customer’s preferred payment method, creates unnecessary authentication friction or provides poor information when a payment fails can all result in lost sales.

Improving payment conversion therefore requires more than simply making a checkout page look attractive. Merchants need to consider the entire payment journey, from the moment a customer reaches the checkout through to successful payment authorisation.

What is payment conversion?

Payment conversion describes the proportion of customers who reach the relevant stage of the checkout process and successfully complete their payment.

The precise calculation can differ between merchants. Some may measure conversion from checkout initiation to successful payment, while others may measure the proportion of payment attempts that result in an approved transaction.

This distinction matters.

A customer may abandon the checkout before submitting payment details because of friction in the payment experience. Another customer may submit their payment information but have the transaction declined.

These are different problems and require different solutions.

A useful payment-conversion strategy therefore considers both checkout behaviour and payment performance.

Make the checkout process easy to understand

Customers should be able to understand exactly what they are purchasing and what will happen when they proceed to payment.

The payment page should make important information easily accessible, including:

A clear summary of the basket

The total amount being charged

Delivery costs and applicable taxes

Available delivery options

Relevant returns information

The payment methods available

Any additional authentication that may be required

A customer should not have to leave the payment page simply to check what is in their basket or confirm the final price.

The objective is to remove uncertainty at the point where the customer is being asked to make the payment.

Reduce unnecessary checkout fields

Every additional field creates another opportunity for friction.

Merchants should review the information requested during checkout and ask whether each field is genuinely necessary.

For example, information may be required to:

Process and authorise the payment

Deliver the product

Prevent fraud

Meet a legal or accounting requirement

Provide a service specifically requested by the customer

If information is not necessary for one of these purposes, merchants should consider whether it needs to be collected at checkout at all.

A simpler payment form can make the checkout experience faster while also reducing the amount of personal data that the merchant needs to handle.

Optimise the payment experience for mobile

Payment pages need to work particularly well on mobile devices.

Customers should not have to zoom, scroll unnecessarily or struggle with small buttons and input fields.

The payment experience should be designed around the way customers actually use mobile devices, including:

Appropriately sized input fields

Mobile-friendly keyboards

Clear calls to action

Minimal scrolling

Fast page loading

Easy selection of payment methods

Clear error messages

The payment process should also work consistently across the range of devices and browsers used by the merchant’s customers.

A technically functional payment page is not necessarily a good mobile payment experience.

Offer the payment methods customers expect

Payment preferences vary considerably between countries, regions and customer groups.

A merchant can lose a sale simply because a customer does not see a payment method they recognise or prefer to use.

This becomes particularly important when expanding internationally.

Depending on the market and customer base, relevant payment methods may include cards, bank-based payment methods, digital wallets, buy-now-pay-later solutions and other local payment options.

The objective is not necessarily to offer every available payment method.

Instead, merchants should understand which payment methods are important to their target customers and determine whether their payment infrastructure can support them effectively.

Localise the payment experience

International customers should not necessarily receive the same payment experience as customers in the merchant’s home market.

Payment preferences, currencies, authentication requirements and customer expectations can differ significantly between markets.

A merchant expanding internationally should therefore consider:

Which payment methods are locally preferred

Whether local currencies should be supported

How customers expect to authenticate payments

Whether the checkout language is appropriate

Whether the payment page reflects local expectations

How failed payments are handled

Whether the selected PSP provides adequate local coverage

Payment conversion is therefore closely connected to international payment strategy.

Build trust into the payment page

Customers need confidence that their payment details are being handled securely.

The payment page should provide clear and appropriate reassurance without overwhelming the customer with technical information.

Depending on the merchant’s setup, this can include clear information about:

Secure payment processing

Recognised payment methods

Additional authentication

The payment provider handling the transaction

What the customer should expect after submitting payment

Trust should be supported by the actual payment experience. A reassuring message cannot compensate for a payment page that looks inconsistent, behaves unexpectedly or produces unclear errors.

Keep the payment page consistent with the merchant’s brand

Customers can become concerned when they are suddenly transferred to a payment page that looks completely different from the website they were shopping on.

Where possible, merchants should provide a consistent visual and user experience throughout checkout.

This does not necessarily mean that every payment page must be hosted directly by the merchant.

Hosted payment pages can be highly effective, but merchants should understand the customisation capabilities of their PSP and whether the payment experience can be integrated appropriately into the overall checkout journey.

Make authentication clear

Additional authentication can be an important part of the payment process.

For European merchants, Strong Customer Authentication (SCA) can affect how some online card payments are authenticated.

From the customer’s perspective, the important issue is that any additional step should be understandable and predictable.

If authentication is required, customers should be given clear information about what they need to do.

Confusing authentication flows, unexpected redirects or unclear instructions can create unnecessary abandonment.

Merchants should therefore monitor authentication performance as part of their overall payment-conversion analysis.

Understand payment declines

Not every failed payment is caused by checkout friction.

A customer may complete the payment form correctly but still receive a declined transaction.

Reasons can include:

Insufficient funds

Issuer restrictions

Incorrect payment information

Fraud or risk controls

Authentication problems

Technical problems

Payment-method restrictions

Acquirer or PSP issues

This is why merchants should distinguish between checkout abandonment and payment failure.

A payment-conversion problem cannot always be solved by changing the design of the checkout page.

Understanding why transactions fail is equally important.

For a deeper look at this subject, see our guide to payment authorisation rates and how merchants can improve them.

Make failed payments easy to recover

A failed payment does not necessarily need to become a lost customer.

The payment experience should explain clearly what happened and, where appropriate, provide an easy way for the customer to try again.

For example, rather than presenting a generic message such as “Payment failed”, the merchant should provide useful information about the next step where this can safely be done.

Depending on the circumstances, this might involve:

Trying the payment again

Selecting another payment method

Correcting payment information

Completing an authentication step

Contacting the merchant

The recovery process should be designed carefully so that security and fraud controls are not weakened simply to improve conversion.

Use payment data to understand where customers are being lost

Merchants should measure the payment journey rather than relying solely on the overall website conversion rate.

Useful measurements can include:

Checkout initiation

Payment-page visits

Payment attempts

Authentication attempts

Successful authorisations

Declined transactions

Technical payment failures

Abandoned checkouts

Successful retries

Conversion by payment method

Conversion by country

Conversion by device

This allows merchants to identify where the largest losses are occurring.

For example, if customers frequently reach the payment page but abandon before submitting their details, the problem may be checkout friction.

If customers submit their details but transactions are frequently declined, the issue may instead lie within payment processing, risk controls, authentication or payment-provider performance.

Look at payment methods individually

Overall payment conversion can hide significant differences between payment methods.

One payment method may produce a high number of successful transactions while another may have significantly higher abandonment or failure rates.

Merchants should therefore analyse performance by payment method where sufficient transaction data is available.

Relevant measures can include:

Attempt volume

Authorisation rate

Conversion rate

Failure rate

Retry success

Refund and chargeback performance

Geographic performance

This can help merchants determine whether adding, removing or changing a payment method could improve the overall payment experience.

Make returning customers easier to pay

Returning customers should not necessarily have to repeat every step of the payment process.

Where appropriate, merchants can use stored payment credentials or tokenisation to make subsequent purchases easier.

This can support:

Returning customers

One-click checkout

Subscriptions

Recurring payments

Merchant-initiated transactions

However, merchants need to design these processes with the relevant payment, security and data-protection requirements in mind.

Our guide to credential-on-file payments explains how stored payment credentials, recurring payments, merchant-initiated transactions and related payment processes work.

Do not sacrifice security for conversion

The objective of payment optimisation is not to remove every possible step from the checkout process.

Security, fraud prevention and regulatory requirements remain important parts of the payment environment.

The better approach is to understand where friction is necessary and where it can be removed.

For example, a merchant might improve conversion by:

Removing unnecessary checkout fields

Improving payment-method selection

Providing clearer authentication instructions

Improving mobile usability

Optimising failed-payment recovery

Using appropriate payment routing

Reducing unnecessary redirects

The objective is to make the necessary payment process as straightforward as possible rather than simply making the process shorter.

Review the payment provider

Payment conversion is also influenced by the merchant’s payment infrastructure.

When evaluating a PSP or payment partner, merchants should consider more than transaction pricing.

Relevant questions include:

Which payment methods are supported?

Which countries and currencies are supported?

What are the payment authorisation rates?

How reliable is the payment infrastructure?

How are failed transactions handled?

What authentication capabilities are available?

What fraud and risk tools are provided?

Can the payment page be appropriately customised?

Does the provider support tokenisation and recurring payments?

How effectively does the provider support international expansion?

A provider that offers a low headline processing cost may not necessarily produce the best commercial result if its payment performance or local coverage is weak.

Test changes rather than assuming they will work

Payment conversion improvements should ideally be measured.

Changes to checkout design, payment methods, authentication flows or payment providers can have different effects depending on the merchant and its customer base.

Where practical, merchants should establish a baseline and measure the effect of changes on relevant metrics.

For example, adding a new payment method may increase overall conversion, while changing the checkout design may reduce abandonment but have little effect on payment authorisation.

The measurement should therefore match the problem being addressed.

Payment conversion and international expansion

The payment experience becomes more complex as merchants enter new markets.

A checkout process that works well in one country may perform poorly elsewhere because customers have different payment preferences or expectations.

International merchants should therefore evaluate payment conversion at market level rather than assuming that a single global checkout strategy will work everywhere.

This can reveal opportunities such as:

Adding locally preferred payment methods

Supporting local currencies

Improving local authentication flows

Using payment providers with stronger local acquiring coverage

Localising checkout information

Reviewing country-specific decline patterns

Payment optimisation can therefore become an important part of international growth strategy.

A practical payment-conversion review

Merchants looking to improve payment conversion can start by reviewing the complete payment journey.

1. Identify where customers abandon

Determine whether customers leave before entering payment details, during payment entry, during authentication or after a failed transaction.

2. Review the payment form

Remove unnecessary fields and make the remaining fields easy to understand and complete.

3. Analyse payment methods

Compare conversion, authorisation and failure rates by payment method and market.

4. Review authentication

Identify whether customers experience unnecessary friction during authentication.

5. Analyse failed payments

Understand why transactions fail and whether successful recovery options are available.

6. Review mobile performance

Test the payment experience across the devices and browsers used by customers.

7. Review returning-customer payments

Consider whether stored credentials, tokenisation or other payment features could make repeat purchases easier.

8. Review the PSP

Assess whether the current payment provider delivers the payment methods, coverage, reliability and payment performance the merchant requires.

Conclusion

Improving payment conversion is not simply about making a checkout page look better.

Successful payment optimisation requires merchants to understand the complete journey from checkout initiation through to successful payment.

The biggest opportunities may come from reducing unnecessary checkout friction, offering the right payment methods, improving mobile usability, making authentication clearer, recovering failed payments or addressing poor payment performance.

For international merchants, the payment experience should also be adapted to the preferences and requirements of each market.

A well-designed payment infrastructure can therefore contribute directly to revenue by helping more customers successfully complete the purchases they have already decided to make.

Gropay helps online merchants evaluate and optimise payment infrastructure, payment providers, payment methods and payment experiences as part of their wider payment strategy.

Contact Gropay for a discussion about improving your payment and checkout experience.