The holiday season is upon us. But this year, the online shopping festival season is shaping up to be different from prior years. What should be on the radar for payments during the holiday season?
Rising inflation and increasing costs have forced us all to become more price conscious and selective. This is especially true when it comes to purchasing decisions, even if we think we’re bagging a bargain. According to a recent survey by Gartner, 48% of consumers will begin their festive shopping early this year. This is in a bid to beat inflation. This presents an opportunity for merchants to drive sales at this crucial shopping period. But the same report found that consumers are becoming more wary of barriers to purchase. To capture this opportunity, payment service providers (PSPs) must make sure they’re more prepared than ever.
Here are four things that should be on the radar of all payment businesses this shopping season.
Security, security, security
Security is a consistent point of focus in payments—and it should be. This is even more of an issue during the run-up to the festive season. This is when opportunistic fraud attempts jump about 30%. As a PSP, if security isn’t top of your agenda yet, it should be. Your security protocols should be set up to maximise detection without declining payments. False positives will not only result in lost sales, but a potential drop off in new customers for your merchants because of decreased brand trust. To prevent any security problems, you should also check your fraud management protocols and make sure they are optimised to run smoothly alongside your merchants’ festive campaigns and promotions.
Drive conversions through data optimization
Data is key to driving conversions and optimizing the customer experience. Today, eCommerce takes place across multiple channels, including online-to-offline (O2O), social media, and even in the metaverse. Whenever people shop, they make payments and these payments provide valuable data about consumer preferences. These include how they like to pay, their spending patterns and habits, and their preferred payment methods. If you have strong data analytics tools that can interpret payment data, you’ll be an even bigger help to your merchants for the festive season and beyond.
Offer the right choice of holiday payments methods
Getting a grip on your data means you can help merchants increase conversions and optimize payments. When it comes to cross-border payments, optimizing payment methods is far from a one size fits all approach. This is particularly true in Asia where the payments landscape is very fragmented. People won’t hit the buy button if their preferred payment methods aren’t available. And in 2021, local payment methods accounted for 77% of purchases online. These local payment methods are digital payment methods used in a particular country or region
Make sure that you’re providing the right payment methods for the markets you’re targeting, or work with experts that know your markets and can advise you on which payment methods you need to drive sales for your merchants.
Always have a back-up plan
Although the festive shopping season might not be as busy as it was last year, be prepared for unexpected jumps in sales. While many are tightening their belts due to inflation, they are still aware that online shopping festival season is the time to bag the best deals.
Even if your payments usually run smoothly, it’s good to have a backup plan in case one or more of your acquirers or processors has any issues. To manage this, have a clear communications plan ready to use with your merchants in case payments are disrupted. Similarly, you should also consider creating internal protocols to manage disruptions. For example, if your credit card processor has a disruption, do you have a cross-functional crisis management team in place to troubleshoot? Do people in merchant-facing positions like customer support and sales know what to and how to respond? What’s your plan of action?
Ironing out how you’ll respond to disruption scenarios and creating a clear communications plan helps ensure when they do happen, everything will be kept under control. And if you’re prepared, it’ll go a long way towards letting your merchants know they’re your main priority during this important time of year.
So, if you let all the above sink in, and make adjustments where necessary, you’ll be well on your way to being prepared and primed for success ahead of 2023’s shopping festival season.
