Payments optimisation: A driver for retail growth post-Brexit
March 22, 2021
Brexit has created new hurdles for retailers to overcome and made the day-to-day operations for most immensely challenging. This is especially true for SME retailers who were already battling a tough year thanks to the fallout from Covid. 6m UK small businesses have been left in a ‘precarious position’ due to the pandemic.
In addition, post Brexit hurdles like delays to shipping and delivery and added costs have bumped up the price of consumer goods.
As a result, smaller businesses have no choice but to think creatively in order to protect their business from further challenges and define new strategies for success.
One of the most immediate changes they can make to withstand the turbulence comes from optimising the payments process. The right payments strategies can and will boost growth in a post-Brexit world, resulting in better conversion and fewer abandoned baskets.
The importance of payments
Payments are at the heart of e-commerce. This is where the customer completes the final step of a sale, making it vital to get it right. If the checkout experience is clunky, buggy or outright broken, you’ve lost a transaction and potentially a customer for good.
And if you look at some of the most successful online brands - boohoo, Amazon and ASOS are good examples - all have a watertight payment experience. It’s an easy, intuitive journey for the user, these businesses accept a plethora of payment options which makes it accessible to more customers, and it also looks polished and trustworthy.
It is this ease in the payments process that SMEs need to embrace if they want to encourage growth in a tough market environment. And by focusing on four key elements merchants will be able to achieve this level of payment optimisation.
#1 – Offering more payment methods
Payment methods have been diversifying for some time. The days of relying on just cash, debit or credit cards is long over, with a wide number of sophisticated payment options now available. What further complicates the picture for businesses selling cross-border is that the number and relative popularity of options varies significantly by country. Digital wallets might be the most popular for some, while others prefer a bank transfer. It all depends on the region and user preferences and you can find more information on the key trends per country here.
While this is great for consumer choice and market competition, it puts pressure on merchants to support an ever-increasing number of the most popular payment methods in the markets they operate in. Embracing multiple payment options is important though, as local gateways drive conversions for brands trying to get into new markets. Audiences trust the familiar so if the payment method they use is offered at the checkout they are more likely to shop with you even if they don’t know a brand. As a result, a payment services provider can unlock early conversions in new markets.
Ultimately, each boost an SME achieves can create a greater number of converted sales.
#2 – Integration of new payment methods
Luckily, implementing multiple payment methods can be fairly simple and firms can find solutions that do most of the hard work for them. SMEs should look for providers that offer all the payment methods they need via one integration that meld tightly with their e-commerce platform. This will ensure customers have the choice they want at the checkout but without it being a burden on the retailer.
Beyond offering a frictionless experience for card and digital wallet payments, adopting tools that allow a business to offer ‘Buy Now, Pay Later’ (BNPL) methods like Klarna can be a real win in the current economic environment. BNPL gives consumers the choice to pay how they want, and almost a fifth of the UK is said to be taking advantage of it. That opportunity for new customers alone makes it worth rethinking payment methods as soon as possible.
#3 - Ensuring a robust, reliable payment service
Reliability is a critical part of the payments process. The Co-op and Morrisons both caught mainstream media attention after an outage that left shoppers unable to make card payments earlier this year. An incident like that can be very damaging to a retailer, especially a small business where every sale counts. Uptime is simply not worth compromising on.
Merchants need to make their payment experience as smooth and reliable as it can be, ensuring that it is secure so customers feel safe shopping. This is vital to give shoppers peace of mind - especially given the rise in cybercrime during the lockdown.
#4 – Pursuing flexible contracts
With so much uncertainty - and frankly, even when times are good - SME retailers must seek ways to avoid getting stuck in a long-term contract for something they’re unsure they’ll need further down the line. This holds true in payments and firms should make sure that any new partners they onboard provide them with the freedom and flexibility of service. Incumbents in the payments industry tend to get away with antiquated contracts and conditions – but times are changing and today’s merchants have more options on the table.
If there is anything that the pandemic has taught businesses, and everyone, it is that we must be adaptable. And to be adaptable businesses need the freedom to quickly pivot as the market changes. This is only possible when you’re not tied down to partners and you can rapidly turn on and off the solutions you need, when you need them.
SMEs may not have the resources of the larger retailers but many have handled the pandemic well, developing online offerings at light speed. Now as Brexit presents new challenges, firms must optimise their payments process, both technically and practically, to streamline operations. By being aware of each of these elements, merchants can ease pressures and drive more revenue, boosting growth even in this new normal.
For further reading, take a look at our Brexit Decision Tree for how to keep international orders flowing to happy customers – not stuck in customs.