If online buyers struggle to transact on eCommerce websites, they often give up. Assuming they want to purchase goods or services but cannot, chances are, they will not try again. Such inconveniences are triggered by cumbersome payment processors.
But, can we blame the customer’s actions for the high frequency of failed transactions? Many times, it relates to poor design of the checkout system. Arguably, online payment processing companies should explain this better.
At some point, an eCommerce web owner may wonder – what is the essence of conducting thorough marketing, winning potential customers, and eventually flopping at the point of sale?
Another problem resulting in incomplete online payment transactions is the tedious verification processes. Payment algorithms subject users to rigorous steps, and many end up quitting. That is quite common even if consumers are willing to pay with their cards. The complex nature of most payment platforms has a direct impact on buyers’ actions.
Should they keep trying to transact in vain or quit?
In this case study, we will use Stekbet to analyze the challenges facing online merchants. Stekbet was a research project that delved into the betting industry. Its mission was to understand the behavior of a punter.
Did you know that gaming and gambling activities receive a lot of engagement online? These industries attract massive online traffic. What’s more, gaming keywords are some of the best-performing on the Internet.
According to Exploding Topics, by 2024 there were approximately 3.09 billion active gamers online. Technically, the gaming and gambling community is made up of video gamers, gamblers, sports fanatics, casino enthusiasts, and more.
Therefore, the choice of Stekbet was the most appropriate to help us dissect payment technologies. Gamblers make up an interesting population to study – they are daring and very curious people.
These guys can literally catalyze money circulation, especially where hoarding is a lifestyle! By studying and analyzing their logs, our researchers demystified many things about online spending.
Much said, there are different types of payment that eCommerce websites use. They include online buying, subscriptions, donations, etcetera.
Let’s focus on the online subscription model. For instance, a merchant may desire to sell services over the Internet. Definitely, that calls for subscribers. A subscriber is someone who periodically pays, especially in advance to receive online services.
Therefore, what are the challenges businesses face relating to processing online payments? That is what we shall investigate.
Disclaimer:
This case study is not meant to market or tarnish the name of any organization. Its objective is to identify and address the challenges facing online merchants (eCommerce platforms). Additionally, it presents suggestions that may lead to finding amicable solutions to solve these problems.
5 Most Popular Online Payment Processors
| Company | Overview |
| Stripe | It is a leader in card payments and best for international transactions. |
| PayPal | This is one of the most widely used and recognized online payment company. It features diverse alternative payment methods. |
| Square | Square is an all-in-one payment processor. |
| Helcim | Arguably, it is the best overall payment processor. |
| Skrill | Not all services provided by Skrill are reliable, but it is popular for gaming and eCommerce transactions, especially in Europe. |
| Clover | Clover is known for reliable POS hardware options. |
Card payments are good options for retailers, hospitality, and e-commerce. Unfortunately, they have a reputation for expensive transaction fees. They also have relatively high rates of payment failures, (Rob Keating).
Stripe Vs. PayPal
In this study, let’s begin by comparing Stripe and PayPal.
| Stripe | PayPal |
| Ideal for large, well-established businesses | Best for small and new businesses |
| Characterized by low charges for transactions | Charges higher fees compared to Stripe |
| Stripe is highly customizable | Paypal has limited options |
| Integrates with WooCommerce, Drupal, PrestaShop, Magento, WordPress, and more | Compatible with WooCommerce, Wix, Magento, BigCommerce, and more |
| For custom checkout flow, it may require an expert | It is easy to set up, has no start-up fees or contract |
Case Study
Stekbet is an online subscription-based platform, and it offers weekly and monthly subscriptions. The website is flawless, loads fast, is easy to navigate, and has a smooth interface. More so, it attracts good traffic from the betting community.
Reportedly, the bouncing rate of card payments is extreme on that site. If the number of customer signups is high, why is it that payment conversion is low?
Why eCommerce Businesses Backfire
i) Complicated Checkout Systems
Successful eCommerce systems have seamless payment processors. Often, online users prefer paying with cards. A website whose checkout flow is smooth will make more sales.
For instance, Windscribe is a popular VPN that uses a simple and easy-to-use payment system. That means customers just spend a couple of minutes interacting with their stress-free payment system.
On the other hand, Stekbet’s checkout process is long. Unfortunately, that experience turns off many potential online buyers. The vigorous verification process of its payment processor is also another major setback.
To add on that, most users do not like lengthy online forms that hinder them from making purchases. Studies reveal that complex web forms chase away users; therefore, Stekbet’s checkout functionality deserves correction. This matter relates to human-computer interaction (HCI).
Obviously, UI/UX design is critical in system development. There is a high possibility that the checkout interface is clumsy. A well-directed, intuitive design can captivate users, make them feel part of the story, and invite them to play on, (Mads Soegaard, 2024).
The design flaw is one of the reasons why most websites have low conversion. Ultimately, the choice of payment technology can influence the overall performance of an eCommerce website.
ii) Operating in Regions with Low Purchasing Power
If you run an eCommerce platform in the USA, Canada, Europe, and some parts of Asia like Japan, you are likely to attract exceptional sales. That is possible because those countries have a good population of paying customers.
Very few countries in Africa have reliable online payment processors. For instance, PayPal’s coverage is available in limited states in Africa. The West African block is active online but intentionally locked out of the eCommerce world, the reason most of them are running to Blockchain. After all, humans are always in search of solutions to their problems.
SEO also plays a crucial role in eCommerce. Therefore, if a website is not visible in countries that have high purchasing power, it cannot succeed online. Despite having immense traffic from Africa, Stekbet cannot convert them into paying customers.
iii) Online Mischief
Today, cybersecurity is another big problem facing businesses. Many people have lost fortunes online, and that makes them shy away or fear doing online transactions. This effect has a terrible impact on genuine businesses.
Additionally, it affects the entire eCommerce ecosystem by unbalancing trade. Remember, the buyer has the final say. If he is nowhere to be found, there is no business. Ultimately, for trade to exist there must be buying and selling.
To add on that, if we put very tough conditions on them, that will deter them from transacting. Businesses will run into losses and end up shutting down. Companies like Stripe will have nothing to offer, the entire banking industry will stagnate, and eventually, governments will miss their revenue.
Possible Solutions to Boost eCommerce
i) Improving Online Payment Systems
Even if an eCommerce business conducts intense marketing, setting up an unfriendly checkout system will always pull it down.
The goal of a business is to make profits, and through that, all stakeholders in its eCommerce chain should benefit. Therefore, online payment companies should upgrade their game.
For instance, time is a critical factor for users who prefer paying with cards. An instant online payment system is what everyone desires to interact with. Furthermore, most buyers do not know how to use these applications. Online payment companies ought to invest in:
- Training users
- Implementing fast-loading features to boost engagement
- Developing seamless checkout systems to avoid frustrating users
- Security
Recently, PayPal introduced a smart subscription button. We are yet to see how it will perform in the eCommerce contest. Until then, we cannot comment on anything!
ii) Open Up the Internet
The world being a global village is possibly a false narrative. Today, the globe is virtually segmented. Websites from the underdeveloped world are invisible in the global digital space. That is why it is becoming difficult to penetrate into the best markets.
The internet atmosphere should be fair for all, otherwise, we may all end up bidding in bad markets where everyone is a seller.
For example, today if you run an eCommerce website from Uganda and want to target the Canadian market, your chances of succeeding are very slim. Some of these problems are associated with biased SEO algorithms, communication censorship, trade controls, and other regional factors (segmentation).
Furthermore, search engines are filled with Western brands. Who is benefiting and making sales online if not the West? Is technology really helping the marginalized economies or are they just spectators? People should wake up and address these inequalities.
What Mobile Payment Technologies Do
Safaricom pioneered the famous M-pesa platform, a revolutionary mobile payment system. Today, they have gone further to simplify the payment of bills, courtesy of the Daraja API. Their latest system substitutes long payment procedures with a push notification.
Interestingly, the merchant sends a notification to the customer to request payment. If he authenticates the transaction by typing his PIN, M-pesa instantly charges him. It’s that simple!
Although Safaricom does not deal with bank cards like top online payment processing companies, it has done a tremendous job in the eCommerce industry. Safaricom is an exemplary telecommunication company – thanks to its innovations!
Read also: Payment gateway vs. payment processor
Conclusion
This case study is an eye-opener. It challenges online payment processing companies to know what is happening on the ground. Merchants play a critical role in business, and they are the first ones to interact with customers. What customers say, is what businesses report.
If a customer visits your online store and registers, he should purchase something instantly. Assuming he spots an item to buy and registers then redirected to a third-party payment processor; upon arriving there, he signs up again and is taken through a tough verification process, what are the chances of him coming back to shop? Zero!
Obviously, they will be exhausted, frustrated, or even quit before shopping. That is how online merchants lose business. Some of these customers are very frank, and they will report their challenges.
Regardless of what causes card processing systems to fail, a high frequency of incomplete transactions is a red flag! Seriously, that affects many existing businesses that tap money online. If we are in a denial state and ignore to address these issues, they will keep affecting many companies dealing with eCommerce.
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