Driving sales with new payment options
You’ve optimized the merchandise or services you sell, and developed your website to ensure that customers can find and buy the items they’re looking for. But when it comes time to pay – and to finalize the transaction – are you offering the right choices?
If you’re not providing multiple payment options, you might be missing an opportunity. In fact, making it easier for customers to pay can increase conversion rates, customer satisfaction, and repeat sales.
Driving demand for new payment methods
Mobile device ownership has seen explosive growth. Nearly half of all US mobile phone users have smartphones. While far fewer households own tablets, tablet sales are growing at more than 200% per year.
Meanwhile, mobile purchasing is also exploding. Fifty percent of smartphone owners have used their phones for shopping; tablet owners are shopping even more, with 62% using a tablet to make online purchases. US mobile e-commerce sales exceeded $6 billion in 2011; Forrester expects that total to grow by 39% each year through 2016.
Mobile purchases are also gaining as a percentage of all online sales. In December 2011, they accounted for 9% of online sales – three times the level of just a year earlier. And in 2011 PayPal facilitated $4 billion in mobile payments – more than five times the 2010 volume.
Buying via mobile
So who’s buying on their mobile devices, what are they buying, and how can you make it easier?
On the phone
Smartphone transactions occur throughout the day and span all categories, but are especially popular for entertainment and meals. Typical buyers are looking for movie or concert tickets or ordering food for pickup or delivery. Online gamers of all ages make lots of small transactions (when you need a flaming sword or a few more magical coins, you need ‘em now). For on-the-go shoppers, security and speed matter even more than they would at home. In public, especially where connectivity may be spotty, consumers don’t want to enter the detailed, confidential data that most credit card transactions require. Making purchases faster and easier, without requiring confidential inputs, leads to repeat purchases.
On the couch
Shopping via tablet is most popular in the evening, when consumers are relaxing at home – and multitasking: two out of three tablet shoppers report watching TV while shopping, and they don’t want to leave their couches to get up and find their wallets. The presence of multiple inputs – or distractions – only reinforces the need to make the overall shopping experience quicker and easier.
The keys to return visits: ease of use and speed
No credit card number required
PayPal’s solution for mobile shopping, PayPal Mobile Express Checkout, lets shoppers complete transactions without manually entering credit card data. The effects for retailers are striking: A Crutchfield study conducted in April and May of 2001 tracked a 34% increase in mobile conversion for sellers using Mobile Express Checkout, with 65% of Mobile Express sales coming from first-time customers. More than 17 million people now use PayPal’s Mobile Express Checkout; these highly engaged customers spend twice as much as average PayPal users.
Put it on the phone bill
Carrier billing, offered by companies such as Zong, is essential for small in-the-moment transactions (remember those flaming swords?). Once a customer sets up an account, all that’s needed for purchase is a mobile phone number and four-digit PIN; the total is automatically added to the user’s cellular bill. Research has shown that carrier billing can increase conversion rates tenfold – and it has potential far beyond in-game purchases.
Buy now, pay later
Especially for big-ticket items such as consumer electronics and travel, built-in financing is a powerful acquisition and upsell tool. Bill Me Later offers instant credit for those that qualify, at the point of sale for both the mobile and the online world. Retailers deploying Bill Me Later have seen significant lifts in conversion (+33%), order size, and repeat sales. Adding promotional financing options can increase the average order value by up to 75%.
Be ready for the opportunity
As the move to m-commerce accelerates, consumers will demand easier and faster ways to shop – and pay – online. Ignore these online payment trends and you risk cart abandonment or frustrated customers. But meet them with new payment technologies, and you make it more likely that consumers will complete their transactions, buy additional items, and come back for more.
Want to know more? Contact your PayPal Account Executive or email us.