Learning from Stripe at Phocuswright EU 2023: 'There's no silver bullet for slow checkout processes'

Something has to be done to reduce the gargantuan amount of time it takes European consumers on average to get through checkout on an eCommerce website. That was our main takeaway from the Phocuswright EU 2023 that took place earlier this month in Barcelona.

“Some 62 percent of customers give up on a purchase after two minutes, yet 3.3 minutes is the average time to complete a European checkout,”

according to The State of European Checkouts in 2022 report by Stripe.

The report was cited in a session called, “Online Checkout Masterclass: Drive More Revenue with Better Payments Experience,” led by James Lemon and Ranjit Balipjepalli of Stripe.

Why do checkouts take so long?

Why do European checkouts take so long and is there a straightforward solution to that customer friction?

“As it turns out, there is no silver bullet,” said Balipjepalli in the session. Instead, he pointed to a whole host of micro-optimizations merchants could do to their checkout process to cut down on the time it takes consumers to get through it.

While not mentioned by Stripe’s Lemon and Balipjepalli as a reason for the length of European checkouts, it was clear from May’s MRC Barcelona 2023 conference that part of the problem lies with the EU’s PSD2 regulation. To fulfill the regulation’s Strong Customer Authentication  (SCA) requirement, European merchants are using 3DS 2.0 authentication for most of their transactions. This adds on average 60 seconds to checkout, said Renan Renner, Product Lead for Authentication at Adyen, at the MRC Barcelona conference. That means, close to one-third of the time Europeans spend in checkout is spent authenticating their identity.

For European travel merchants, who were the target audience of Phocuswright EU, this must especially be true since most SCA exemptions do not apply to typical travel transactions. For example, the average ticket price of packages from online travel agencies (OTAs) or for airline tickets is too high to apply the low-value transaction exemption.

Boosting conversion by optimizing checkout

There are other problems plaguing checkout on European eCommerce sites besides length of checkout that reduce the conversion rate. For example, nine out of 10 eCommerce websites are making at least five basic mistakes regarding checkouts, according to Stripe. One of the most common problems (83 percent of websites surveyed) is that the website doesn’t seek to follow-up with customers who abandon their cart.

As probably we can all attest, cart abandonment often doesn’t mean a lack of interest in buying a specific product. Sometimes it just indicates distraction on the part of the potential buyer who has gone elsewhere online. And it is not enough to assume that if a customer really needs or wants your product that they will come back.

As Stripe’s Lemon said during the session:

“You’re probably not the only choice in town - any time there’s a point of friction, it just gives [the customer] a great excuse to go back to the best-in-class option, another travel option or the OTA itself.

There is still a lot of room to gain in European markets by adopting what the consumer wants. For example, 68 percent of European customers said they were more likely to complete a purchase if they had the option to spread out their payments. This seems to suggest that Buy Now Pay Later options would be very popular in Europe. But there, more than half of merchants do not offer BNPL as a payment method at checkout. According to Balipjepalli, in travel, the share of merchants who support BNPL is below 37 percent.

As the self-proclaimed “ biggest company in travel you've never heard of,” Stripe had a lot of advice for travel merchants on how to gain more revenue by optimizing their checkout options. The three most important to take away were to:

• Support local payment and flexible payment options
• Implement 1-click checkout
• Create a seamless mobile experience

Justt's takeaway: "Invest in your customer experience"

Justt’s contribution to the conference and travel merchants in Europe and elsewhere is focused on saving time and effort wasted post-transaction on card-based customer payment disputes. While it is certainly crucial for merchants to convert potential customers at the checkout page, it doesn’t do businesses any good if the revenue received leaks out as a result of issues with the credit card payment or cardholder.

The point of chargebacks is to ensure that the customer gets what they paid for, but requires a watchful eye to make sure that cardholders aren’t misusing the system to reverse legitimate transactions. Justt automatically creates the evidence needed to present the merchant’s case that a charge was legitimate to the issuer. By automating and incorporating machine learning into the handling of chargebacks, Justt return to travel merchants’ customer service teams additional time and effort to spend on preserving and strengthening the customer relationship.

A healthy relationship with customers helps reduce a business’ chargeback rate, ensures customer loyalty and maintains long-term profitability.

Justt also launched a number of features at Phocuswright EU with the overarching goal of providing a holistic chargeback solution to merchants that can address the chargeback-related needs across the different departments of the organization. From helping finance teams better predict chargeback revenue recovery to aiding engineering teams in determining the costs of using more and better data in arguing chargeback cases, Justt has put thought into how the post-transaction experience affects the entire business organization.

To learn more about ways to improve your company’s bottom line and business health, read our breakdown of how healthy customer relationships improve bottom-line figures.