Checkout challenges make tough times tougher for businesses as two-thirds of consumers abandon online purchases

Businesses risk being out of step with consumers as preference for digital payments increases

LONDON, 10 January 2023 -- Businesses struggling with the cost of living crisis may be letting money slip right through their fingers -- or at the point of sale, to be exact. According to new research from GoCardless, a global leader in bank payment solutions, 67% of consumers say they would abandon their online purchase if their preferred payment method was not available, and 45% reveal they feel frustrated when they have to manually enter their payment details in an online checkout. These figures reflect the rising standard of what payers have come to expect at the virtual till. 

What do consumers really want in today’s on-demand world? The top three attributes that influence their choice of payment are security, selected by 23% of payers, ease of use (21%) and the ability for money to leave their account right away (19%). On the other end of the scale, points and rewards were an influencing factor for just 7% of respondents.

The insights were revealed in a new report, ‘Demystifying Payer Experience’, from GoCardless, which surveyed over 7,000 consumers across the UK, US, France, Germany and Australia, and more than 1,500 business decision-makers in the UK, US, France, and Germany.

Willing to try

The research also shows that nearly three-quarters (75%) of payers are open to trying new ways to pay if they could easily see the benefits. The stand-out consideration was security, with the largest proportion of consumers (36%) saying they would try an unfamiliar payment method if it appeared to be more secure than alternatives. This was followed by ease of use (16%) and speed (9%).

As new payment technology rolls out around the world, the study found a willing group of consumers in each market ready to give them a go. In the UK, 29% of respondents said they are likely to try Variable Recurring Payments, powered by open banking, as they become more widely available. A third (34%) of Australians stated that they were likely to use PayTo, the new account-to-account payment method which launched July 2022.

Gap between payer preferences and business offerings

Both business and consumer payers expressed a preference for digital payments for e-commerce transactions and one-off invoices. When it comes to paying invoices, the top method chosen by consumers globally was bank payments (25%), followed by credit card (21%) and debit cards (18%). 54% of all business payers also cited bank payments as their top preference when making invoice payments. 

However, across Germany, France and the US, offline payment types such as cheques and cash are commonplace. 65% of French businesses and 69% of US businesses still accept cheques -- and over two-thirds of all small businesses (68%) globally still welcome either cheques or cash. This suggests a disconnect between how payers want to pay and what merchants have on offer.

Some forward-looking companies plan to evolve their payment strategy. Large businesses are most proactive, with 68% of them looking to invest in their payments infrastructure over the next two years, compared to 49% of medium-sized businesses and 24% of small businesses.

Of those that plan to invest, improving their capability for digital invoicing/pay-by-link is universally popular: This was selected by six in ten (60%) French merchants, 46% of those in Germany and 39% and 33%, respectively, of business decision-makers in the US and UK. Bank payments also continue to be top of the agenda, with 38% globally seeking to invest in Direct Debit and a further 20% interested in open banking.

Siamac Rezaiezadeh, VP of Product Marketing and Insights at GoCardless, said: “For millennia humans have sought out new and innovative ways to trade, swapping goods and services for stores of wealth. But we’ve evolved, and so have the tools we use to pay.

“The research indicates that payers today have increasingly high expectations at checkout. Fortunately, new technology is developing rapidly and many new methods, such as bank payments, meet the demand for payments that are safer, faster and more immediate. We’re excited to help businesses and consumers try innovations like open banking payments and PayTo so they can experience for themselves the benefits of these new alternatives.”

Notes to editors

All figures, unless otherwise stated, are from YouGov Plc. For the Financial Decision Makers survey, the total sample size was 1514 adults across the UK, US, France and Germany. Fieldwork was undertaken between 6th-16th June 2022. The survey was carried out online.

For the consumer survey, the total sample size was 7611 adults across the UK, US, France, Germany and Australia. Fieldwork was undertaken between 1st – 9th June 2022. The survey was carried out online. The figures have been weighted for each country to produce an ‘average’ value.

About GoCardless

GoCardless is a global leader in direct bank payments. We help more than 85,000 businesses, from start-ups to household names, collect both recurring and one-off payments, without the chasing, stress or expensive fees. Each year GoCardless processes more than US$30 billion of payments across 30+ countries. Our acquisition of Nordigen means we’re also helping businesses make faster and more informed decisions through easy access to bank account data. We are headquartered in the UK, with additional offices in Australia, France, Latvia and the United States. For more information, please visit www.gocardless.com and follow us on Twitter @GoCardless. 

© 2023 GoCardless Ltd. All Rights Reserved. GoCardless is a registered trademark of GoCardless Ltd in multiple countries. Third party trademarks mentioned above are owned by their respective companies. Unless explicitly identified as such, nothing in this press release should be construed to the contrary, or as an approval, endorsement or sponsorship by any third parties of GoCardless Ltd. or any aspect of this press release.