How COVID-19 has reshaped the SMB checkout: Online
1. Businesses recognise that integrating new payment methods into the online checkout is critical, and this has been accelerated by COVID-19. The majority already have plans in place to do so. But there is a lack of understanding when it comes to which payment methods to offer, and many businesses say they have stopped offering certain payment methods due to a lack of demand.
Currently card payments remain the most popular method of online payment acceptance, but digital wallets and direct bank transfer are also popular. There are also some regional preferences for specific alternative payment methods.
- Overall 60% of businesses agree that offering more payment methods now is more important than ever, with only 13% disagreeing. One reason for this is COVID-19; 60% of businesses say consumer payment method preferences have changed due to COVID-19.
- Similarly, 60% of merchants say that upgrading their checkout is currently a priority for them, and 61% say that it is more important to them now than 12 months ago. Overall, COVID-19 has changed how the majority of businesses (62%) think about payments and 58% have accelerated their plans to overhaul the checkout due to COVID-19. Two thirds (67%) of businesses also agree that changes in behaviour during COVID-19 has meant consumers are more comfortable with payment methods they previously avoided
Q: To what extent do you agree with the following statements?
- The result of this is that 76% of businesses have made plans to add more payment methods to their online checkout. And COVID-19 has impacted this as well. Of those that have made these plans, 34% say they have made new plans directly due to COVID-19 and 32% are accelerating previously made plans. COVID-19 has had a negative impact on some plans as well, with 19% of businesses now having to re-prioritise due to the pandemic.
- However, despite this seeming acknowledgement of the value of alternative payment methods, businesses are unsure about what this should mean for them in practice. Half (50%) of businesses say they would like to offer more payment methods in their online checkout but do not know which to offer. And many have a history of poor decision-making in this area; 43% have stopped offering payment methods previously due to a lack of consumer demand.
Q: What impact has COVID-19 had on your plans to add more payment methods into your checkout?
3. Online businesses have already made efforts to evolve their payments acceptance during COVID-19, and in the main the impact of this has been positive. This has also impacted businesses' relationships with their payments provider, although more work can be done in this area.
- 82% of businesses have implemented some sort of new payment method during COVID-19. Accepting contactless (34%) and card payments (29%) on delivery is the most popular of these. But upgrades to the online checkout have been popular too; overall 42% of businesses have integrated a new payment method into their online checkout and 24% have integrated more than one. Over a quarter of online businesses (26%) have started a new relationship with a digital wallets provider.
Q: Which of the following measures have you implemented during COVID-19? Select all that apply.
- The results of these new integrations have already been positive. Two thirds (67%) of businesses have already seen an increase in sales due to these upgrades, and this percentage is even greater in the US (75%).
Q: What impact have these had on your sales?
4. There is something of a dichotomy between how COVID-19 is impacting online businesses at the moment and how businesses believe COVID-19 will impact them in the long term. The majority of businesses say that their volume of business has increased, and yet overall the outlook appears to be pessimistic.
- When asked directly about how their volume of business has changed during COVID-19, almost half (47%) of businesses say this has increased, versus a quarter (25%) that have been negatively impacted. 34% of businesses have seen an increase in revenue, 30% have seen an increase in profit margin, and 40% have seen an increase in number of customers.
- Many businesses also believe that COVID-19 has had a positive impact on their business model. 31% say COVID-19 has had a positive impact on the number of products or services they offer, 36% are positive about new product ventures, 31% believe they are better positioned to enter new geographical markets and 41% think that COVID-19 has increased their ability to innovate.
Q: How has COVID-19 affected the following areas of your business?
- However, when asked more generally about the long-term impact of COVID-19 a much more negative image emerges. 72% of businesses say that COVID-19 will have a long-term impact on them, and of these 62% say they are currently being impacted negatively (versus 27% that say they are being impacted positively). Over half (51%) believe that they will continue to be negatively impacted for the next 12 months (versus 33% positively), and 40% believe that they continue to be negatively impacted beyond 12 months (versus 36%).
Q: How is COVID-19 impacting your business... (to those that agree that COVID-19 will impact their business at some point)
5. Declined transactions, abandoned transactions, and fraud concerns continue to be strong issues for online businesses, and all have been made worse by COVID-19.
- According to businesses, both they and consumers are more wary of fraud now than before COVID-19. 55% of businesses say that an increase in fraudulent transactions has been one of their greatest concerns during COVID-19 and 58% say that it is hard to find a balance between improving security processes and making the online customer journey as quick and easy as possible. 60% say COVID-19 has resulted in consumers being more concerned about being a victim of fraud and 60% believe that consumers are increasingly looking to make payments online using methods where their financial details are not shared.
Q: To what extent do you agree with the following statements?
73% of online businesses say cart abandonments are an issue for them (16% say a significant issue). More online businesses in the US (29%) say abandoned transactions are a significant issue than any other market. Only 13% of businesses said their cart abandonment rate is negligible. Over half (51%) of businesses say that their abandoned transaction rate has increased during COVID-19, and again this is most severely felt in the US (65%).
Q: Has your percentage of abandoned transactions been impacted by COVID-19?
Q: Have you noticed a change in the percentage of declined transactions following COVID-19?