Alternative Payment Methods and Checkout Abandonment

Bryan Gudmundsoncheckout abandonmentLeave a Comment

Social-Cart-AbandonmentLast week, international Airline KLM announced a new method of booking flights, making changes to reservations, and making payments. The company will now serve customers who interact with the company via private message on social media outlets Twitter and Facebook. To accept payment from these social consumers, specialized representatives dispatch customized URLs that direct customers to unique checkout pages. While the following weeks will determine just how effective this new payment method is, the news should spark competition today for all online retailers.

In the past few years, especially in the United States, credit and debit cards have reigned supreme when it comes to making purchases from e-retailers. However, this trend is changing, both in the US and across the globe. Alternative payment methods (any payment method that is not a credit or debit card) are gaining traction in nearly every industry; now is the time to discuss their adaptation.


Why use Alternative Payment Methods?

The logic is simple: Checkout abandonment increases when people aren’t allowed their preferred method of payment. Similar to walking into a cash-only, brick-and-mortar establishment, logging onto a website only to find that you can’t pay with your preferred e-wallet is typically bothersome enough to have you exit and continue your search elsewhere. People are very particular about the way they pay; anything less than ideal often leads to abandonment.

According to a 2012 study from WorldPay, 29% of online transactions completed in the United States and Canada processed payments with non-card methods. This number shows that almost a third of all consumers prefer to use something other than a card when making online purchases. This figure is only expected to grow. The same study also projects that, internationally, alternative payment methods are slated to account for 59% of all transactions by 2017. Instead of asking, “Why adopt new payment methods?” the better question to ask may be, “Which alternative payment methods should I use?”


Reducing Abandonment: Which Payment Methods are Best?

Although there are dozens of alternative payment methods to consider adding to your checkout, there are a few top contenders:

e-wallets – Electronic wallets are the most popular type of alternative payment. In fact, over 44% of transactions in China are completed with e-wallets today. Popular companies include Paypal, AliPay (China), and Google Wallet. Most of these e-wallet services contain a good deal of user details integrated with payment information, allowing online retailers to skip most checkout forms when used properly. This expedience reduces checkout abandonment and helps facilitate impulse purchases. By 2017, e-wallets are expected to account for 41% of all online transactions.

Amazon Payments – Amazon Payments is a system that allows customers purchasing from companies other than the e-commerce giant to use their existing Amazon accounts. When using Amazon Payments, third-party retailers will still receive valuable customer information, such as name and email address, as purchases are made. With Amazon Payments, consumers need to remember fewer sets of log-in credentials and can rely on the payment safety guaranteed by Amazon. – The growing popularity of alternative payment methods is undeniable, even to the credit card companies that currently maintain a dominant hold on e-commerce payments. is Visa’s answer to e-wallets. The service ties your payment information to a username and password that simplifies purchasing and reduces checkout abandonment by expediting the information input process. Although supports all types of major debit and credit cards, the Visa branding is prevalent throughout.


Optimizing Checkout

Once you’ve decided on which payment methods to add to your site, it’s time to integrate them into your checkout flow. Many e-commerce companies make the mistake of simply adding another option next to “Credit Card” on the billing information page of checkout. While this is a quick and easy solution, it doesn’t utilize the features that make alternative payments effective tools for combating checkout abandonment. Keep the following in mind:

Make Use of Accounts – Many services, such as Amazon Payment and Paypal, contain a good deal of user information within. Giving shoppers an option to use these payment methods from the cart–before they reach checkout–allows visitors to circumvent the typical checkout flow in favor of a much more streamlined process. Users shouldn’t have to enter their name, address, and telephone number if this information already exists within their other accounts.

However, Be Wary of Competing Calls to Action. While giving users an option to select alternative payment methods does combat checkout abandonment by making the purchasing process brief, you don’t want to muddle the shopping flow for everyone else. Buttons for paying with AliPay, PayPal,, or any other service should be visible, but secondary with your page’s pimary call to action. People who are looking to use these payment methods will have a keen eye peeled for these options, so don’t be afraid to have your normal checkout stand out a bit more than the rest.

Checkout abandonment is a multi-faceted issue. However, nearly every contributing element surrounds creating a quick, safe, and logical checkout progression. Adopting alternative payment methods can help accomplish all of these goals. For more information on reducing abandonment or constructing an efficient checkout, contact UpSellit.


Written by Bryan Gudmundson

Leave a Reply

Your email address will not be published. Required fields are marked *