The transformative potential of payment service providers (PSPs) in the eCommerce landscape can no longer be overlooked, especially in the United States. A comprehensive survey conducted by PYMNTS Intelligence in collaboration with Mastercard, spanning five countries—Australia, Brazil, the UAE, the UK, and the US—highlights crucial insights into the role of PSPs in enhancing the eCommerce checkout experience. For middle-market eCommerce businesses, the focal point remains firmly on the user experience (UX) during checkout, overshadowing concerns about the backend of payment processing. This emphasis signals a pivotal area where PSPs must concentrate their efforts to meet merchant demands and drive higher conversion rates.
The Checkout Experience: A Critical Concern for U.S. Merchants
Survey findings reveal that nearly 70% of U.S. merchants encounter significant challenges with the user experience (UX) during checkout. This is primarily due to issues such as abandoned carts and prolonged checkout times, which directly impact conversion rates—a top priority for merchants. In response, U.S. merchants are demanding technologies that can streamline the checkout process and enhance user satisfaction. Among these, one-click technologies stand out, with three-quarters of merchants requesting new features from their PSPs to address these challenges effectively.
Merchants’ requests for new technologies reveal their deep-seated desire to increase conversion rates. For 44% of U.S. merchants, this is the most crucial factor, while 28% also consider it important. This priority is often placed above other concerns such as improving customer experience and reducing fraud. It suggests that U.S. merchants view conversion rates as the ultimate objective, with other improvements serving as pathways to achieve this goal. As a result, PSPs and technology providers must tailor their marketing strategies to highlight their potential impact on conversion rates, ensuring they address this critical need.
Proactive Merchant Engagement with PSPs
U.S. merchants are not passive players; they actively seek to enhance their checkout processes and are proactive in requesting new technologies. An impressive 78% of U.S. merchants report that they can make requests for desired upgrades from their PSPs, and 55% have already done so. This proactive stance indicates that merchants are continuously monitoring available technologies, eager to implement those that can provide tangible benefits to their checkout process and overall customer experience.
However, there remains a communication gap: 22% of merchants feel unable to approach their PSPs for new features due to a lack of awareness regarding the services offered or how to inquire about them. This gap suggests that PSPs need to significantly improve their engagement strategies, ensuring that their merchant clients are well-informed about available options and how they can enhance their business operations. Additionally, 63% of U.S. merchants note that their PSPs automatically implement new features. While this can be beneficial, PSPs must ensure that merchants are aware of these updates and understand how they contribute to increasing conversions. Moreover, merchants typically have the option to opt in or opt out of new payment methods, further highlighting the need for clear communication from PSPs.
Preferred Checkout Technologies
When it comes to preferred checkout and payment technologies, one-click solutions dominate the list of requests from U.S. merchants. With 45% of merchants asking their PSPs to provide this technology, it is evident that one-click solutions are seen as powerful tools to expedite checkout processes, enhance customer experience, and ultimately increase conversion rates. Following closely, secure cards on file are requested by 27% of merchants, while biometric authentication garners 25%. Despite their potential, gateway tokens and network tokens are less frequently requested, likely due to merchants’ unclear perceptions of how tokenization can enhance the checkout experience.
There is also a notable missed opportunity for many PSPs. Only 44% of U.S. merchants believe their PSPs contribute to an easy and convenient user experience during checkout. Furthermore, a mere 15% consider this the most significant benefit their PSPs provide. Even fewer merchants believe their PSPs improve approval rates (28%) or reduce false declines (24%), with only 1% viewing these benefits as the top advantages their PSP offers. These findings suggest that PSPs might not be fully capitalizing on opportunities to assist merchants in improving critical aspects of conversion, thereby not making the most of their potential impact.
PSPs as Strategic Partners
The transformative potential of payment service providers (PSPs) within the eCommerce landscape, particularly in the United States, is increasingly undeniable. A detailed survey executed by PYMNTS Intelligence in partnership with Mastercard, covering five nations—Australia, Brazil, the UAE, the UK, and the US—reveals key insights into how PSPs can elevate the eCommerce checkout experience. For middle-market eCommerce enterprises, the primary concern lies in optimizing the user experience (UX) at checkout, taking precedence over backend payment processing issues. This emphasis points to a critical area where PSPs should devote their resources to satisfy merchant requirements and boost conversion rates. By focusing on seamless and efficient UX during the checkout process, PSPs can significantly impact merchant success. This trend underlines the urgent need for PSPs to refine and innovate their offerings, ensuring they align with merchant expectations and ultimately, foster higher rates of completed transactions. It’s clear that the future of eCommerce heavily depends on the evolution and capabilities of PSPs.
