Is Your Payment Stack Prepared for the Shopping Season Overload?
It is official; it’s shopping season. Every year it starts with back-to-school shopping, and continues with Black Friday, Cyber Monday, and then finishes with the holidays. Consumers spent $1.30 trillion in Q4 of 2016, and the holiday season usually accounts for 25-30% of a retailer’s annual sales.
The next four months are critical to any retailer, and now more than ever is the time to take a look at your payment stack. Retailers need to be prepared and test new payment tools before their volumes increase. The shopping industry has changed, and shoppers are expecting payments to be accessible across all channels – online, in-store, and in-app. Security and fraud continue to be top concerns for retailers, but with new payment types also comes new tools that keep retailers protected this shopping season.
Businesses need to be prepared.
If you felt that the summer flew by, the holidays will be in overdrive. Businesses need to prepare before the official kick-off of Black Friday. Every year, consumers are starting earlier in hopes of avoiding the rush.
If you are planning to launch a new payment solution, or payment feature, ensure you do so soon. Launching a new feature closer to Black Friday puts your business at risk of losing sales if the integration breaks or a bug is exposed. You need to have adequate time to test in production before getting slammed with holiday shoppers.
Pro tip: Ask your payment provider for their uptime. It should be higher than 99%. Also, ask them to provide metrics on what their platform can handle (peak volumes and load) and other benchmark use cases. This information is helpful in understanding the volume loads you can pass through.
Payments need to be accessible.
Payments are being integrated into every facet of our life. Consumers are now expecting to be able to seamlessly make a payment online, in-store, in-app, and with their wearable devices. That doesn’t mean you have to sell through all these channels, just the ones that your target customers are using. Retailers who sell on two or more channels averaged twice the revenue as a single-channel retailer. History has shown that consumers still prefer making purchases from a computer compared to a mobile device, with desktop converted at 2.4x rate of a smartphone during the 2016 holiday season.
Pro tip: Be smart about the channels you chose to invest in, by understanding your target customer. Take into account their demographics and match their preferred shopping habits.
Payments need to be secure.
If you have repeat customers and want to make their checkout easy, you may want to offer customer profiles, so they don’t have to repeatedly enter their information. While this makes their life easier, it can mean risk for you to store their payment data. Exploring tools such as tokenization (the ability to encrypt payment data with your payment processor and store a token) can help alleviate these and other security concerns.
Wallets such as Visa Checkout, MasterPass, and Apple Pay are becoming increasingly popular with their added layers of security, as they take on authentication. They’ve also proven to help increase conversion rates.
Pro tip: Find out your most commonly used credit card and test out the associated Wallet i.e. if Visa is 40% of your online sales, test out Visa Checkout.
As students go back to school, parents are starting to think about the holidays, and retailers need to be prepared for a boost in transaction volumes. If you ensure now that your business and payment stack is prepared, that your payments are accessible and secure it will make for a more profitable season. The red Starbucks cups are coming, are you ready?
Ryan Stewart is Chief Commercial Officer for Bambora North America where he leads the Sales, Marketing, and Product teams. He is passionate about the dynamic payments space and focuses on delivering a simple, elegant payments experience to merchants and software providers globally. Ryan has launched numerous disruptive payments products in Canada, the US and Europe, from online, to in-app, mPOS, and merchant online onboarding automation.