The power of payments in digital goods industries:
How
to surprise, delight and retain customers
Introduction
Surprising and delighting customers is in the DNA of the digital goods and services sector. Whether it’s streaming music and movies or downloading games, your brand is likely to stir the emotions and heighten customer expectation.
That means you must work extra hard to impress and retain customers. Research shows that 6% of consumers would permanently turn their back on a brand after just two poor experiences 1 .
Payments play an important role in the retention of subscribers as 48% have terminated their subscriptions because of a declined payment 2 .
Surprise subscribers by going above and beyond service expectations. Solve payment issues before they result in cart abandonment and disappointment.
Alternative Payment Methods (APMs) are expected to make up around 28% of total payment volumes by 2026 3 . Offering the latest APMs shows customers your brand understands their needs and preferences.
A seamless checkout experience or one-click checkout lets customers access your content quickly and easily.
When a customer changes their mind or is unhappy with a purchase, instant refunds are a welcome surprise. It tells customers their satisfaction is at the top of your priority list.
These memorable moments can have tangible business impact and deliver a meaningful distinction in the digital goods and services markets. Creating these kinds of emotional responses not only helps retain and grow subscribers, but it is the foundation of a great brand.
< 2 / 11 > Emplifi - UK & US consumers surveyed, 2022 2 PYMNTS 3 World Payments Report
Accept new payment types
Demonstrating that you know and cater for your customers’ payment preferences shows you understand their needs. In addition to traditional card acceptance, APMs could include bank transfers, eWallets, BNPL instalments and many more.
The pace of APM adoption is set to increase. The value of digital wallet transactions alone is expected to grow from $7.5 trillion to over $12 trillion by 2026 4 .
Today, 9% of shoppers will already abandon their cart if online stores do not offer their preferred payment methods 5 .
The penetration of individual APMs differs between geographies. For example, iDEAL is popular in the Netherlands, while Przelewy24 is big in Poland, and POLi has widespread use in New Zealand and Australia.
Ideally, digital goods providers should avoid the need to integrate multiple service providers to achieve their desired portfolio of APMs.
Digital goods providers should therefore choose a payment service provider that offers access to a broad range of APMs that are popular in their target markets through a single technical integration.
9%
...of shoppers will already abandon their cart if online stores do not offer their preferred payment methods
< 3 / 11 > 4 Juniper Research 5 Baymard Institute
Offer one-click payments
The average large-scale e-commerce site can potentially increase conversion rate by 35% through better checkout UX 6 .
The chore of typing in their payment details after deciding to make a purchase is a common example of where UX can be improved for customers.
The ability to bypass this with a single click payment option is likely to be a welcome surprise that removes an important point of friction in the buyer journey.
Instead, one-click payments uses information previously submitted and stored securely on a token.
< 4 / 11 > 6 Research by the Baymard Institute
Refund instantly (and make it easy to cancel)
Delighting customers is not only about taking payments using their preferred method - giving back can be equally important.
While keeping the cash in your account for as long as possible makes good sense to the Finance department, you are likely to be missing an opportunity to surprise and delight customers.
Issuing refunds is a chance to provide a great customer experience when your buyers most value it. Instant refunds show customers they can trust your brand and buy with confidence.
Similarly, digital goods providers who offer subscription-based offerings that are difficult to cancel or have long contractual lock-ins are likely to be taking a short-sighted view. Research indicates that 80% of consumers are more likely to subscribe if they can cancel easily online 7 .
80%
< 5 / 11 > 7 Prnewswire, 2022 consumer subscription
Fix problems before they arise
There are many reasons why a customer might suffer the frustration of a declined transaction.
Strategic thinking has moved past simply processing payments to orchestrating them. By applying some intelligence to every payment processed, the chances of a successful purchase are elevated.
Insufficient funds is the single biggest reason for declined transactions, accounting for 27% of all declined transactions 8 .
If the customer doesn’t have sufficient funds in their bank account to cover the transaction amount, the payment will be declined.
Partial approvals identify these transactions before the issuer declines the payment and offers your customer the option to deposit a lower value that will be approved, or to cancel the transaction altogether.
Payment partners with multiple local banking relationships can make a rules-based evaluation of each transaction considering several key factors before routing the payment to the most appropriate acquirer. This smart routing will maximise the likelihood the payment will be accepted. By orchestrating payments in this way, fewer transactions are likely to be declined and your processing costs are also reduced.
...of declined transactions are due to insufficient funds 27%
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8 PYMNTS
Launch a custom-branded payment product
To further delight your customers and ensure your business stands out in the market, consider launching your own payment products, like branded physical or virtual cards to boost brand recognition and loyalty.
Today, it’s not only banks that can provide financial services. Digital goods providers can extend financial services such as issuing cards for greater customer loyalty, customisation and the elimination of barriers to purchasing.
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Where next?
Nuvei can be your innovation-led payment partner that offers the latest technologies to support your online retail business as it expands. Nuvei is the trusted platform for the future of e-commerce.
• 20+ years experience
• Globally connected
• Highest acceptance rates
• Reduced cart abandonment
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About Nuvei
Nuvei (Nasdaq: NVEI) (TSX: NVEI) is the Canadian fintech company accelerating the business of clients around the world. Nuvei’s modular, flexible and scalable technology allows leading companies to accept next-gen payments, offer all payout options and benefit from card issuing, banking, risk and fraud management services. Connecting businesses to their customers in more than 200 markets, with local acquiring in 45+ markets, 150 currencies and more than 600+ alternative payment methods, Nuvei provides the technology and insights for customers and partners to succeed locally and globally with one integration.
For more information, visit nuvei.com
CONTACT:
Theodore Law theodore.law@nuvei.com
Billy Liapis billy.liapis@nuvei.com
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